Getty ImagesMutual fund investors want to invest only in equity schemes of Axis Mutual Fund these days, say mutual fund advisors. Impressed with the performance of Axis MF's equity schemes last year, some of these investors want to commit their fresh money to only Axis schemes, while some others want to shift their existing investments in other schemes to Axis schemes, add advisors.
Several equity schemes of Axis Mutual Fund such as Axis Midcap Fund, Axis Multicap Fund, Axis Bluechip Fund, among others, were topping the performance chart in their respective category at the end of 2018. Mutual fund advisors point out that even though these schemes offered only modest returns at the end of the year, the performance was still striking because other schemes in the category were in the negative territory.
“Investors want to invest in the schemes of Axis Mutual Fund because of their recent performance. Many investors don’t even know why they want to invest apart from the fact that they will get good returns,” says Puneet Oberoi, Founder, Excellent Investment Advisors.
"Investors want to switch to Axis Mutual Fund's equity schemes at the moment because they have had a phenomenal year in 2018. It is basically because of recency bias," says Santosh Joseph, Founder, CEO & Founder, Germinate Wealth Solutions.
Mutual fund advisors point out that such fascination for a certain fund house or schemes happens all the time in the market. “This is what happened with HDFC Top 100 when it beat all its peers at one point. The investors who invested because of the short-term performance pulled out their money when the scheme underperformed,” adds Oberoi.
In fact, all giant schemes have monopolized investors' attention at certain periods, say mutual fund advisors. For example, many mutual fund investors were obsessed with HDFC Equity Fund for a long period. Despite its insipid performance lately, many investors still swear by the scheme and its legendary fund manager.
Oberoi says he is busy pointing out to investors that it is not smart to take investment decisions based on the performance of 'last year'. Santosh Joseph says investors should understand why Axis schemes did well and not blindly switch their money from one scheme to another. "In 2017, Axis schemes were lagging behind many schemes because they had a largecap bias in their schemes. In 2018, this strategy paid off," Joseph says.
“If you want to invest in the number one fund, you will keep switching,” says P Srinivasan, Founder, Ace Financial Advisories. “At this point, Axis schemes look very attractive because all the other schemes are hit very badly. But you have to look at the long-term peer comparison to take decisions,” says P Srinivasan.
Mutual fund advisors point out that no scheme or fund house can top the charts forever. Different investment strategies might help fund managers beat its peers in different market cycles. That is why they ask investors to stick to their schemes and have a diversified investment portfolio.
"Rather than shifting your investments to the top performer in all market phases, you should diversify your investments and stick to them like Axis schemes did," says Santosh Joseph.
Mutual fund advisors say all good mutual fund schemes will have a difference of mostly 1-3 per cent in their returns over a long period of, say, 10 years. If a scheme is giving 20 per cent returns at one point, doesn’t mean it will continue to give you 20 per cent for the next ten years. “Invest in Axis schemes or any other good scheme, but stay with the scheme even when it doesn’t beat all its peers,” advises Puneet Oberoi.
Several equity schemes of Axis Mutual Fund such as Axis Midcap Fund, Axis Multicap Fund, Axis Bluechip Fund, among others, were topping the performance chart in their respective category at the end of 2018. Mutual fund advisors point out that even though these schemes offered only modest returns at the end of the year, the performance was still striking because other schemes in the category were in the negative territory.
“Investors want to invest in the schemes of Axis Mutual Fund because of their recent performance. Many investors don’t even know why they want to invest apart from the fact that they will get good returns,” says Puneet Oberoi, Founder, Excellent Investment Advisors.
"Investors want to switch to Axis Mutual Fund's equity schemes at the moment because they have had a phenomenal year in 2018. It is basically because of recency bias," says Santosh Joseph, Founder, CEO & Founder, Germinate Wealth Solutions.
Mutual fund advisors point out that such fascination for a certain fund house or schemes happens all the time in the market. “This is what happened with HDFC Top 100 when it beat all its peers at one point. The investors who invested because of the short-term performance pulled out their money when the scheme underperformed,” adds Oberoi.
In fact, all giant schemes have monopolized investors' attention at certain periods, say mutual fund advisors. For example, many mutual fund investors were obsessed with HDFC Equity Fund for a long period. Despite its insipid performance lately, many investors still swear by the scheme and its legendary fund manager.
Oberoi says he is busy pointing out to investors that it is not smart to take investment decisions based on the performance of 'last year'. Santosh Joseph says investors should understand why Axis schemes did well and not blindly switch their money from one scheme to another. "In 2017, Axis schemes were lagging behind many schemes because they had a largecap bias in their schemes. In 2018, this strategy paid off," Joseph says.
“If you want to invest in the number one fund, you will keep switching,” says P Srinivasan, Founder, Ace Financial Advisories. “At this point, Axis schemes look very attractive because all the other schemes are hit very badly. But you have to look at the long-term peer comparison to take decisions,” says P Srinivasan.
Mutual fund advisors point out that no scheme or fund house can top the charts forever. Different investment strategies might help fund managers beat its peers in different market cycles. That is why they ask investors to stick to their schemes and have a diversified investment portfolio.
"Rather than shifting your investments to the top performer in all market phases, you should diversify your investments and stick to them like Axis schemes did," says Santosh Joseph.
Mutual fund advisors say all good mutual fund schemes will have a difference of mostly 1-3 per cent in their returns over a long period of, say, 10 years. If a scheme is giving 20 per cent returns at one point, doesn’t mean it will continue to give you 20 per cent for the next ten years. “Invest in Axis schemes or any other good scheme, but stay with the scheme even when it doesn’t beat all its peers,” advises Puneet Oberoi.
Get Unlimited Access to The Economic Times
