Have you seen any of the Fund Manager’s report lately in the mutual funds/financial markets?
One of the first thing that they do as soon as they are appointed as a Funds Manager with few million bucks of public money at their disposal, is to look for a bunch of worst performing stocks/bonds or whatever, the collection of which is given a fancy name such as’XYZ Global market index’. They have perfected the art to such an extent that there are even’sector specific’ such indices!
This’index’ is a coat hanger on which the fund manager can comfortably hang his performance or otherwise at the end of the coming quarter. So you get to hear at the end of the period that’market forces had a profound impact as against the prediction at the beginning(wont say’mine’); however we have over performed by 2% against 30% loss posted by’XYZ index’.
When was the last time you heard these fancy car sporting financial wiz kids taking a 28% pay-cut for under performance. Neither are the Fund CO.s kind enough to drop their entry or exit loads by 28%, assuring cool returns for themselves, rain or no-rain.
They do part with returns, after providing for expenses(luxuries) should there be a windfall and only if there is a windfall. An average investor is more than willing to part with performance-based reward; but is there one fund out there, that is courageous enough to make an offering? Nope.
Read the latest round of reports of almost all the “reputed” fund managers .Here is a sample from an Indian MF Fund Manager .’the monsoon is good, liquidity position is good, currency is doing well, war fear has gone down, inflation is under check barring minor fluctuations, demand is up, markets are not overvalued.the market would bounce (oops), however the markets could see some correction’(Do read all the goodies & put your money on the table; however, please don’t take my last point very seriously, it is my euphemistic disclaimer, just incase I don’t perform well, despite all these goodies!).
Presto, one more round of aggressive invitation to part with your money, for these lot to have another big-bash at your expense, come the end of next quarter.
1-2% of upward of 500 million bucks is not a small change to party with.
Yet, readers, dont forget to invest in MFs - the grass is greener at the end of this quarter!