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Mutual Funds: Why have funds that topped rankings in 2019 plummeted?

Money Control · 1y

The article discusses the pros and cons of mutual fund investing in India as the industry crosses the Rs 50 lakh crore milestone. It highlights the convenience and diversification benefits of mutual funds, yet points out their imperfections such as underperformance, high fees, and fluctuations in performance. The analysis of different fund categories reveals the fluctuating rankings of funds based on one-year returns. The reasons behind this fluctuation include migrating managers, asset growth challenges, herding behavior, and expenses. The article suggests considering parameters like Sharpe ratio, downside capture, AUM, and expense ratio while selecting funds. It also explores the option of index funds and ETFs as an alternative for passive investors.