In a two-part series, I would like to discuss how to spot (I) and how to handle (II) mutual fund underperformers. I write this after suggestions on twitter and by Kunal Lal.
The first step is to define underperformance. This is possible only if the right category of mutual funds is first selected for investment. Most investors do not do that. AMCs offers incorrect suggestions regarding
If diversification is about 'not keeping all eggs in the same basket', rebalancing is the realisation that 'what goes up, will come down'. Yes, investment portfolio management is all about simple common sense. In this post, I would like to revisit the topic of portfolio rebalancing and discuss what it is, why do it, and simple ways to do it.
I would like to thank Sunny Sachdeva for suggesting this
Suppose you had invested in a mid-cap fund, say SBI emerging business from Sep 2010. Here is a tool with which you can compare the current performance of the fund with all other funds in the mid-cap category and its benchmark.
I am not a fan of peer comparison after investing a mutual fund. Many other are. They end up reviewing their fund performance using star ratings. The ratings evaluate