Hi guys,
I am 41 with back ground in Statistics. Now interested in finance. Especially assessing mutual funds. Have done empirical research in risk assessment of wide type of funds in India and I have the following few points
1st the perception that balanced funds are less risky than. Mid and small. Cap funds is not always true.
There examples where. Balanced funds have been hit much badly than midcap funds.
To assess how the fund will perform one needs to look at the sectors where the fund has more than 30 percent allocation. And then asses what are the potential in those sectors next 3 to five years.
If. two funds have similar sector exposures and weight ages then diversifying in such funds really does not reduce the risks much
Apart from sector allocation. It is also important to look at equity and cash distribution ratio. Some of the disciplined small and mid cap funds such Hdfc small cap maintain 80 20 equity cash ratio. Where as others like Franklin India smaller companies fund has nearly 94 percent in equities.
I like Franklyn India smaller companies, Hdfc small cap, Hdfc balance, Tata P/E fund, reliance small cap, SBI small and mid cap. These funds have different sector exposure s and weights are different. They cover Engg, Technology, Manufacturing, Automotive, Banking and financial services.
I am 41 with back ground in Statistics. Now interested in finance. Especially assessing mutual funds. Have done empirical research in risk assessment of wide type of funds in India and I have the following few points
1st the perception that balanced funds are less risky than. Mid and small. Cap funds is not always true.
There examples where. Balanced funds have been hit much badly than midcap funds.
To assess how the fund will perform one needs to look at the sectors where the fund has more than 30 percent allocation. And then asses what are the potential in those sectors next 3 to five years.
If. two funds have similar sector exposures and weight ages then diversifying in such funds really does not reduce the risks much
Apart from sector allocation. It is also important to look at equity and cash distribution ratio. Some of the disciplined small and mid cap funds such Hdfc small cap maintain 80 20 equity cash ratio. Where as others like Franklin India smaller companies fund has nearly 94 percent in equities.
I like Franklyn India smaller companies, Hdfc small cap, Hdfc balance, Tata P/E fund, reliance small cap, SBI small and mid cap. These funds have different sector exposure s and weights are different. They cover Engg, Technology, Manufacturing, Automotive, Banking and financial services.
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