PrimeInvestor has been in the limelight – across social and print media – for an investment opinion (SELL call on several funds of a fund house) we published recently. I would like to clarify a few things about such calls.
Firstly, we issue such calls with only one thing in mind – the interests of our subscribers and their portfolios. Publicity resulting from such calls is the last thing on our minds – in fact, most of it is unwelcome, if I were to be honest about it. In this case, media attention came unsolicited.
Secondly, our aim in mutual fund calls is not just to tell you the good funds to invest in, through Prime Funds and our Buy calls. It is also to help you manage your portfolio well, and that makes it just as important to issue Sell or Hold calls.
Such actions are often mistaken for short-term portfolio churn. It is not so. When either the performance of a fund is steadily poor or the risks associated with the fund or AMC is unknown, we firmly believe it’s best to move to other options than remain with a fund only for the sake of being long-term. With mutual funds, there are always alternatives for any fund. Our philosophy of long-term is staying invested. Not necessarily being wedded to a scheme or an AMC.
And, that is why, even as we issued our recent SELL call, our subscribers would have options to reinvest the money from exiting these funds – from the curated Prime Funds list or from the several funds, across categories, that we have a BUY call on.
We try to form our opinions based on an objective assessment of the situation and the options that are available to investors. And sometimes, the information available to make the assessment will be limited.
So, in situations like the recent one, our opinion may come across as a sharp reaction. We’re not saying that risk is bad – we have plenty of calls where risks are high and it’s perfectly fine to take risks to earn returns. But where the impact of an event is currently unclear but consequences grave if it does transpire, we believe it’s far better to protect wealth than run a risk in the name of returns. And tax outflow is a consequence of such risk containment. We do not do the ‘what if’ scenarios to see whether the risk mitigation makes up for the tax outflow. Such an approach cannot work especially when the consequence is a black hole that cannot be measured. As the lyrics from the Wild West song goes: “ ..the secret to survivin’ is knowin’ what to throw away and knowin’ what to keep”.
Our job is to grow AND protect your wealth. Like a game of chess, you have to play both offence and defence at the same time to win the game. You can be rest assured that, on your behalf and in the interest of your wealth, we at PrimeInvestor will remain vigilant on both sides of the game.
30 thoughts on “A short note about our recent call”
Hi ..wanted to know about the NFO HDFC Nifty 500 Multicap 50 25 25 Index Fund .. are there other fund houses which have similar funds ? If so, what are their expense ratios as compared to this nfo being offered by HDFC?
Thanks
Rakesh
Hello Sir,
Regarding the HDFC Nifty 500 Multicap 50:25:25 Index Fund, it aims to mirror the performance of the Nifty 500 Multicap 50:25:25 Index, which has a 50% weight in the Nifty 100, 25% weight in the Nifty Midcap 150, and 25% weight in the Nifty Smallcap 250, rebalanced quarterly. You can read more about this index here.
This fund is still in the NFO period, and they have not disclosed the expense ratio yet.
There is also the Navi Nifty 500 Multicap 50:25:25 Index Fund based on the same index. This fund is also new, having completed its NFO period on 31st July and is now open for investment. According to the fund house page, this fund has an expense ratio of 0.26%. There is no mention of separate expense ratios for direct and regular plans.
The expense ratios of these funds will be publicly available by the middle of next month.
Regards
Thanks !
I am a defensive investor (hybrids, flexicap & Index). I could not commit to Quant due to their aggressive strategy in all their hybrid funds and momentum nature of investments. When I read your article I could clearly see the point of view and agree with it.
Quant is probably great for those who can take large risks, understand the risk they take etc. So your article was a much needed one for a conservative investor who invested into Quant for great returns but did not fully understand the risk they have taken.
PrimeInvestor reiterated its ‘no-conflict’ stand.
Since your revenue is based on subscriptions (and not on Ads from AMCs), you could take a tough stand in the sole interest of your subscribers. And unless there is an impact on the said AMC (withdrawals and bad press), there is no incentive for them to improve and comply with law.
Great job and keep it up! My subscription will continue as long as you are conflict-free.
🙏
‘Our philosophy of long-term is staying invested. Not necessarily being wedded to a scheme or an AMC.’ Excellent point
Thank you sir. Vidya
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