Indian Fund Managers Miss the PSU Bank Stocks Rally. Can we trust them blindly? Its Time to Take Action.

Indian Fund Managers Miss the PSU Bank Stocks Rally. Can we trust them blindly? Its Time to Take Action.

Roboadviso     Mutual Funds     Posted On, Thu 26th October, 2017     1 comment
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Public Sector Bank Stocks saw a huge profit rally on 25/10/17 after the decision of Government to recapitalize the PSU Banks which have been facing NPA Problems for last many years. The quantum of recapitalization is Rs. 2.11 Trillion.

Recapitalization is a huge boost for PSU Banks and this was reflective in the share price movement of these PSU Banks.

Some of the top movers in a single day as under:

  • Punjab National Bank – 46.2%
  • Canara Bank – 38.05%
  • Union Bank – 34.07%
  • SBI – 27.58%
  • ICICI Bank – 14.66%

It was a super time for investors who had exposure in above stocks or any other PSU Bank Stocks. In the last few years, Indian Investors have reduced direct stock market investment and have instead started investing in Equity Mutual Funds with the hope that the Experts/ Fund Managers will do better job of picking the right stock.

Investors of Equity Mutual Funds would be sad to learn that the so called experts or Fund Managers of Mutual Fund whom they trusted have not delivered on their expectation. Majority of the Fund Managers didnt have any exposure or had very minimal exposure in these PSU Bank stocks before this rally and hence they missed the huge rally.

Following is the list of Funds which had some exposure in the PSU Bank Stocks:

Punjab National Bank:

SBI Bank:

ICICI Bank:

Only Exception:

Of all the Fund Managers, only Mr. Prashant Jain who manages HDFC Prudence Fund, HDFC Top 200 Fund, HDFC Equity Fund etc. had decent exposure in the PSU Banks. This resulted in good jump in the performance of his schemes in one day – HDFC Prudence Fund went up by 5.26% and HDFC Equity Fund went up by 6.38%

What should an Investor do?

Investors should become more proactive in tracking their performance. They should ask questions to the fund managers of their holding fund which are under performing. This can be done by asking the advisors who sold the fund to investor so that they can further create pressure on fund managers. Investors can also send mails directly to AMC complaining about nonperformance of the fund.

The Fund Manager or so called expert should not take it easy. He and his Asset Management Company has huge responsibility of crores of Investors. They need to deliver and if they cant perform then they should reduce their hefty remuneration/ salaries and further reduce the expense ratio which they charge to investors. Why should fund manager of mutual fund charge full management fees if they cant do justice to their job. Its high time investors created pressure on these Mutual Fund Companies and their Managers.

 

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