MF Research is Key to Success in MF Investing

As we come to the end of CY 2022, it is time to take stock of MF performance across categories. While BSE Sensex is flat on YTD basis there are at least 52 per cent of the equity schemes that underperformed their benchmark category in 2022. What is interesting to note is that the percentage of underperformance in Small-Cap funds is the lowest amongst the other equity mutual funds’ category. This goes to show that there is still opportunity in small-caps and micro-caps for generating alpha. The very fact that at least 54 per cent of the multi-cap schemes underperformed their respective benchmark indices highlights the importance of fund selection. 

MF selection thus becomes the key for success in MF investing as more and more equity schemes struggle to outperform the set benchmark. In our cover story this issue we have discussed the pros and cons of investing in PMS versus mutual funds. I am sure the cover story will help you take informed decisions. In our special story in this issue we have attempted to objectively conclude if buying a house is a better option than renting a house. The insightful special story will help you put things in perspective. There is an important update for all the mutual fund investors here. 

Direct investing is expected to get a little costlier for the MF investor going forward if we go by the new SEBI guidelines. As per the fresh guidelines, the ability to charge their clients or the fund houses for processing transactions will soon be available to online mutual fund investment platforms like Groww, Zerodha’s Coin, Paytm Money, etc. which now provide free investing in direct plans. As of now, neither of these online investment platforms earns any money by offering direct mutual fund plans. The gap between the direct and regular plans will get smaller when transaction fees are added to direct mutual fund transactions.

Yogesh Supekar
Executive Editor