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"We also have to tell them that they should consider equity for
long-term goals," he said, adding that getting individual
investors to understand this tenet is the only way forward for
the MF industry. "Many mutual funds are working hard at it,"
he said.
Many industry watchers feel that the money taken out of MFs
won't return to the industry entirely, as the RBI wants banks
to start lending to companies rather than opting for an easy
way out.
Industry players also believe that the talk of scrapping the tax
advantage enjoyed by banks and companies in MF
investments would dampen the sentiment. As of now, it
seems, 'back to small investors' is the only mantra that can
help funds rediscover their lost magic.
Read more: New strategy: Mutual funds turn focus on retail investors - The Times of
India http://timesofindia.indiatimes.com/business/india-business/New-strategy-
Mutual-funds-turn-focus-on-retail-
investors/articleshow/5502795.cms#ixzz1ElaQq5jH
Articles
Why Mutual Funds Are A Better Option for
Retail Investors
Investing directly in share markets is very risky task for a retail investors who
has limited money, time and knowledge. Hence, it is best for him to invest in
mutual funds.
It is simply instinctive to get attracted toward equity. The success stories
- few true and many false - of people having become millionaires
overnight, are bound to allure anyone. But the fact is that Stock Market
isn't easy money; Stock market is not everyone’s cup of tea.
However, for a retail investor, capital is normally limited. With this small
money supply it won't be likely for him to adequately diversify his/her
portfolio. In such a condition, Mutual Funds extend an alternative to be
a part of well-diversified portfolio even with small capital like $100.
Naturally, a small portfolio can give super natural returns but on the
other hand the risk is also very high. This high-risk high-reward scheme
wouldn't be appropriate for absolute majority of retail investors. It just
suits a couple of select expert investors who have lots of money to put
into market.
Also, with moderate capital it's hard to buy pricey shares like Google,
Infosys etc. This drives us to buy low price stocks. Broadly speaking
high-priced stocks will be good shares and low-priced stocks might not
be that good shares. Hence, with limited capital you could end up with a
inferior portfolio.
Given the fact that moderate capital could mean small and inferior
portfolio, Mutual Funds perhaps are more preferable path for those who
cannot bring in enough money for investing
Do you have adequate knowledge & expertise?
· Can you interpret the balance sheet and Annual Reports as easily as
an investment company and make right conclusions?
· Can you identify the future sectors of growth? Or those that could face
a downswing in the immediate future?
Let’s presume that you have big bucks to invest and also a really sound
understanding of the equity markets. But do you have the third
important criteria, "Time & Resources"?
Now this list keeps varying quite frequently and it calls for constant
research to keep oneself updated. So, there won’t be many retail
investors who can afford to devote time to study thousands of annual
reports and tracking the performance of companies. Moreover, yearly
reports are not all that is needed to research a company. How many of
us can travel to company premises, contact their management and talk
over their plans, earning expectations, etc.? Can you talk personally to
the industry experts? Even if you can do all of this, can it be done on an
ongoing basis - day after day every year?
Unlike all this, opting for Mutual Funds is a comparatively much easier
task. Also, it does not ask for close monitoring. Hence it becomes the
finest option for retail investors to relish the yields of stock market,
without being forced to commit lots of time and effort.
www.buzzle.com/articles/why-mutual-funds-are-a-better-option-for-
retail- investors.html -
www.morningstar.co.in/in/news/article.aspx?articleid=80749...
Articles
“When that kind of money comes in, it’s not sticky,” chief executive of a
domestic fund house said, but refused to be identified as his firm also
caters to the HNIs. “This is not true retail (money) which will come in
and stay.”
The BSE Sensex skidded 6.3% in January and helped attract investors,
many of whom had exited equity funds in 2008 fearing lofty valuations,
said Sanjay Sinha, chief executive of DBS Cholamandalam Mutual
Fund. “One-month inflow cannot be an indicative of a trend,” he said.
“It’s a better situation than August to December but we would like to see
it on a more sustainable basis in the next few months for us to establish
it as a trend,” said Saurabh Nanavati, chief executive officer of Religare
Asset Management.
Equity funds, which managed Rs 1.9 trillion at the end of January, are
key to the profitability of money managers as such funds earn the
biggest management fee of about 1%.
A new equity fund from Sundaram has collected Rs 500 crore and
received 65,000 applications. Typically, Mr Raman said, his new funds
get more than 100,000 applications.
HNIs account for about 20% of the assets of Indian equity-oriented
funds and churn nearly a fifth of their investments within six months,
according to latest data released by the Association of Mutual Funds in
India (AMFI).
By comparison, retail investors control 65% of the assets and keep 90%
of that parked for more than six months, providing stability to the
industry’s equity assets.economictimes.indiatimes.com › ... › Mutual
Funds