Understanding which equity fund is right for you is easy, if you ask the right questions. It is all about understanding the temperament of the manager who is managing the fund. Since the amount of quantitative information available for each fund is quite large, one needs to be careful in separating the signal from the noise.
Let me begin with the task of evaluating the past performance of the fund. Most experiences with this endeavour are best summarised as ‘great until I made the investment’.
The reason for the generally poor investment experience, when using past performance as a guide, is because the right question is not being asked.
