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  • Business Development ‘My biggest mistake was recommending sector funds’

    ‘My biggest mistake was recommending sector funds’

    Bharat Bagla and Anita Kanbargi share their biggest mistakes and what they learned from it.
    Darshita Shah Sep 10, 2016

    Bharat Bagla

    Back in 2010, I had recommended an equity fund to my clients solely on the reputation of the fund manager. After a few years, that fund manager was replaced and the fund started to underperform. To make matters worse, my clients could not exit because it was a closed end fund. I had not done enough due diligence on the fund and whether this fund suited the risk profile of my investors.

    So my clients were very upset and I lost a few of them. This incidence taught me that we should not sell funds by solely looking at the fund manager and we should provide enough liquidity to investors. Also, we should always recommend funds based on the risk profile of investors.

    Anita Kanbargi

    During the 2004 NFO rush, I had recommended a few clients to invest in NFOs of thematic funds. I had also recommended a few infrastructure funds which underperformed. Further, the 2008 market crash led to bigger losses. I could not convince them to stay invested. Due to this bad experience, some of my clients left me.

    This experience taught me that we should never recommend sector funds. I also learned to avoid NFOs unless they come with a meaningful differentiation.

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    1 Comment
    Prithwi Nath Keshari · 7 years ago `
    Many of the closed ended funds post NFO have out performed like ICICI Pru Value Funds, Growth Funds and Sundaram Micro Cap 1. It is just bad luck to some having lost money in 2008. Year 2008 is a separate black year having drained out about 50% of Capital to those who did not face courage to stay and took path of flight. Actually to me this could be best year to multiply asset just on next year almost near to double.
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