It is not just past performance that investors look at before considering a scheme. A recent study by Final Mile and FIFA found that 66% of the investors shortlist schemes based on credibility of the fund manager and brand value of the fund house.
Other parameters are scheme fundamentals (64%) and past performance (58%).
Fund technicalities such as exposure to various sectors and NAV prices do not matter much to investors. The report shows that 50% of investors shortlist funds after checking the exposure of portfolio to a particular sector while 37% of investors consider low NAV price to shortlist schemes.
Nisreen Mamaji, of Moneyworks, believes that only mature investors and HNIs consider credibility of fund managers and brand value of the fund house to zero in on a scheme. “Retail investors who want to start afresh may not know about fund managers, fund houses and their track record. However, HNIs are more concerned about fund manager’s credibility and fund house’s brand value,” she said. “No matter if the investor is retail or HNI, the fact is that they take the final decision based on the recommendation of their advisors,” she added.
Shifali Satsangee, of Funds Vedaa, believes that although investors look at the pedigree of the fund houses and the investment style of the fund managers, they usually look for consistency in the performance of schemes across various market cycles.
