The best way to choose an equity mutual fund4 min read 01 Feb 2016, 07:10 PM IST
Most investors end up buying 4-6 and at times even 10 mutual funds. If each of these funds own 50-70 stocks, as most funds do, then the investor eventually ends up owning anywhere in the range of 300-500 stocks
The biggest conundrum in the mutual fund industry stems from: “Past performance is not an indicator of the future". And yet, in the absence of any insights on what to look for, an investor ends up looking at past performance. A word closely associated with performance is ‘consistency’. But what is consistency? More linearity of returns? A narrow range in which returns fall? Consistently No.1 in returns or at least in the top quartile all the time?
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