The cover package on mutual funds (Hooking the Best Funds, June 2011) was highly instructive as it went beyond just ranking the various schemes available in the market. Insights on how to pick fund schemes with the highest probability of returning good profits (Picking the Winner) and the strategies employed by some top fund managers while choosing stocks (View from the Driver's Seat) were interesting reads. Especially interesting was the story on small funds (Small Funds, Big Returns) and the views of Ajit Dayal, Chairman, Quantum Asset Management Company. It does seem that undue importance is being given to the size of a fund house or a fund while choosing an investment vehicle.
HARI SHARMA, New Delhi
The fall in retail participation in mutual funds (Low Retail Investor Interest is a Cause of Concern, June 2011) as pointed out by H N Sinor, chief executive, Amfi should be taken seriously by SEBI. While retail investors still want to invest in mutual funds, there is no distributor interest for pushing these. Perhaps Sebi needs to re-look the 'no-load' structure that has prohibited mutual fund intermediaries from charging a commission on the business they solicit from investors. In a market like India, where financial literacy is low, most investment products need to be explained and pushed by intermediaries. Incidentally, mutual fund products were primarily meant for retail investors who did not possess the expertise to have a direct exposure to stocks. It is not in anybody's interest to have such regulations, which result in the retail investors being marginalised.
SIDARTH GURJAR, Bangalore
The article on summer-related stocks (Hot stocks, Summer Sizzlers, June 2011) gives an interesting insight on how investors can use seasonal trends to make money in the stock market. However, I think it would be prudent for individual investors should take help from professionals while deciding on specific investments since there are a host of other issues that determine the movement of stocks, such as regulatory changes, change in the business environment and issues particular to each company. A professional advisor can also take a call on the timing to offload the stock. Also, some such stocks may be good in the longer term.
ABHISHEK RAI, Mumbai
I agree with Ajit Dayal, CEO, Quantum Asset Management, that the size of asset under management (AUM) of a fund house should not be the major determinant in an investors' choice of investment in a mutual fund scheme (A Matter of Character, June 2011). One should, instead, go by the track record of existing funds and their fund managers. Your data on best funds clearly shows that while small funds have performed well, there are schemes from large fund houses that have underperformed their peers and the index.
ADIYODI UNNIKRISHNAN, Pune
ERRATA
In the story on strategies of fund managers (View from the Driver's Seat, June 2011), the designation of Soumendra Nath Lahiri should have been Head of Equities, Canara Robeco Mutual Fund.
