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Big Mistakes Mutual Fund Investors Make

Mutual Funds have gained huge popularity in recent years as evident from the fact that between 1st April 2016 and 31st March 2018, 2.32 crore folios have been added by mutual funds. The Assets under Management (AUM) of the industry increased from Rs 14,21,952 crore to Rs 21,36,036 crore during this period. That is a growth of 50% in two years, no mean achievement!
A number of steps taken by the regulator, SEBI as well as by the industry body AMFI and by the various Asset Management Companies and the distributor community have played a great role in the growth of the industry. One can safely say we have reached a point where most people with investible surplus have started considering mutual funds as a serious investment option. In this context, it is important to keep in mind some of the common mistakes that investors make while investing in mutual funds.
It is All About Equity: Many people have the mistaken belief that mutual funds are all about equity. The…
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How to Get Rich with Mutual Funds during Stock Market Volatility

Should investors invest in Mutual Funds at this point in time?
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Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index.

What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents.

Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark.

Shrinking outperformance

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