Skip to main content

What to do when Fund Manager of a Mutual Fund Changes


To begin with, do familiarise yourself with the identity of the fund manager for all the schemes you own and track any changes to the designated manager. AMCs are required to advertise fund manager changes through newspaper advertisements 


If a manager change is due to an internal reshuffle in the AMC (say a senior fund manager being elevated to CIO), it isn't a big worry, as you can budget for some continuity in strategy and style. But when the manager of your scheme bids adieu to the fund house, you certainly need to be on your watch.


You should take fund manager churn very seriously in the following circumstances.

  • When your equity scheme was managed by a seasoned manager who has weathered two or three market cycles and he quits.
  • When the manager of your micro-cap or mid-cap fund quits.
  • When a scheme with a value or contrarian mandate sees a manager change. The Indian market is overcrowded with growth-style investors, so being a value investor or contrarian requires experience and conviction.
  • When your fund is a multi-cap, 'opportunities' or tax-saving fund, its mandate is usually loosely defined, allowing the fund manager to freely shift around the style or market cap in the portfolio. Schemes with such loosely defined mandates, if they are good performers, can see a significant impact if the man or woman at the helm changes.


So assuming the worst has happened and the manager of a performing equity scheme has called it quits. What do you do now? Well, don't immediately panic and jump ship, but watch the fund's performance closely for the next six months. Be wary of slippage in the scheme's ranking within the category and returns relative to its benchmark.


Returns apart, there are other parameters that can signal that big (and undesirable) changes are underway in the scheme's portfolio, too.


1.  Watch for a spike in the scheme's portfolio turnover ratio. If the monthly factsheet shows a spike after a fund-manager change, it is a sign that the new manager is replacing a good part of the portfolio, which can lead to changes in the returns or risk profile.

2. A shift in the scheme's market cap composition – from a large-cap tilt to a mid-, small-cap tilt, can also be a hint that the new manager isn't comfortable with the earlier strategy. A higher mid/small-cap weight can mean more risk and volatility.

3. Check out the fund's portfolio P/E and beta. A spike in the portfolio P/E can be a sign of the scheme moving from a value to growth focus. A shift from a low beta to a high beta (beta is the tendency of the portfolio to move with the market) is also an indicator of higher correlation to the market and thus higher risk.


If you own a top-ranking equity scheme and notice a slippage in performance after a fund-manager change, check out the above indicators.


A deterioration in performance, accompanied by a shift in strategy, market-cap or style, is good enough reason to sell the scheme and switch to a better alternative.





Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 10 Tax Saver Mutual Funds for 2017 - 2018

Best 10 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. ICICI Prudential Long Term Equity Fund

5. Birla Sun Life Tax Relief 96

6. Franklin India TaxShield 

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Birla Sun Life Tax Plan



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact SaveTaxGetRich on 94 8300 8300

------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300



 

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

LIC Leave Encashment Plan

LIC Leave Encashment Plan       Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms fro

Tax Slabs 2012

Slab 1 Upto Rs 1.6 Lacs Tax Rate NIL for Men; Upto Rs 1.9 Lacs Tax Rate NIL for Women; Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen; Slab 2 Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10% Slab 3 Rs 5 Lacs to Rs 8 Lacs Tax Rate 20% Slab 4 Rs 8 Lacs onwards Tax Rate 30%   --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 R

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage

What is price deflator?

What is price deflator? A defaltor is used to restate data measured over time to prices prevailing at a particular period or time to make it comparable. Essentially, a deflator removes the effect of inflation from the data. What is the role of price deflator in GDP calculations? Prices are continuously in a state of flux, but generally trend upwards over time. Therefore, even without an increase in the quantity of goods and services produced by an economy, price increase can give the impression of an increase in the gross domestic product, or GDP, the benchmark indicator of economic activity. Therefore, the impact of prices has to be removed at arrive at a true measure of the value of goods and services produced, or real economic growth. A deflator is used to reduce output estimates at current prices to what they would be if calculated with reference to prices in a particular year. Why is GDP deflator considered a good measure of inflation? The ratio between the GDP at current p
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now