The Hypocrisy of Mutual Funds

They advise you to remain invested thru thick n thin.

Yet they themselves churn like crazy !

Hat Tip: Mystic Wealth


6 replies on “The Hypocrisy of Mutual Funds”

dont we give money to the funds so that they can manage it for us actively while we stay invested ? if i wanted the fund manager to buy and hold, i should be looking at index funds and not actively managed funds. That said one needs to be bit cautious on lots of churn as it could be counter productive, happy to note that many good large cap funds are missing and not even on Franklin Templeton scheme mentioned, their churn is usually very low.

On an AUM of 14 to 97 crores, turnover ratio is 647 to 360%.
Does the turnver ration have any correlation with the size of the AUM and of course the performance of the fund?
It would be interesting to find this.

The total AUM of these funds adds to ~ Rs 67,500 crores accounting to 12.5% total equity AUM is Rs 5.37 lakh crore. So one cannot say based on the 12.5% that the equity funds in aggregate are hypocrites

Also churn depends on inflows,redemptions + fund mgr buy /sell, not just fund mgr selling something to buy something else. In a few funds like midcaps it could also be that the fund mgr was changing strategy completely could also lead to high churn but that would be only for that year, for example in HDFC Midcaps case, the churn is high but the next month ie Sep end data the churn is only 30% odd over the whole year ending Sep 2016,

Over what period is this? numbers don’t mean much without the time period. Over 15 years is reasonable. Please complete the facts. thanks

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