AMongst the fund managers these were the only ones to have bet on reale state stocks but after that they have really spread themselves out very wide and thin. The top stock is not even 3% of the portfolio but if they are able to generate returns we are not competent to comment on their investing style!

If Fund Manager quit,i will pull out my money or wait for 3 months to see how the new FM is performing.

Ha ha ha ha

Just kidding. I think I am responsible for the hijack

I received Centrum newsletter for this month and was amazed by Standard Chartered Premier Equity Fund. Although,they manage 200crs only,their portfolio looks fabulous!

I don't know how I missed Templeton India Growth. Their portfolio looks 'value style oriented' allright.

Lessons in do-it-yourself investing

Millions of American investors are making the transition to self-directed investing. As Peter Lynch put it in One Up on Wall Street, "Rule #1, in my book, is: stop lis­tening to professionals. Twenty years in this business convinces me that any normal person using the custom­ary three per cent of the brain can pick stocks just as well, if not better, than the average Wall Street expert. Think like an amateur...If you're a surfer, a truck driver, a high school dropout, or an eccentric retiree, then you've got an edge already."

You can build a winning mutual fund portfolio by yourself, because all of the expertise you need is now available to you. Wall Street's historic monopoly over financial information no longer exists - investors today are not dependent on their brokers for tips or informa­tion resources. The power has shifted from Wall Street's institutions to Main Street America.

Discount brokerage first weakened Wall Street's stranglehold in the 1970s. On-line technologies widened the gap in the 1980s and 1990s. Now we're entering a new phase in this revolution, with the emergence of the self-reliant, self-directed investor.

The new do-it-yourself investors are taking control of their financial future. Armed with a new spirit of confi­dence, they are discovering the best tools to accomplish their goals and quickly learning how to use these tools to build successful portfolios. No-load, high-performing funds and other discounted services advance this new freedom.

A new age of insecurity - and financial self-reliance

In decades past, American investors relied on a variety of institutions - the government, employers, and Wall Street - �to guide them safely into retirement. They made the key financial decisions affecting our lives. Someone else had the information and the resources, so individual investors were dependent on their authority and wisdom.

This is not the case today. Now investors are moving through a new age of insecurity. Concerns about their financial futures are forcing American investors to become self-reliant. And they're rising to the challenge. Today, investors are not only financially savvy and computer-literate, they're also filled with a confidence that they can indeed manage their own financial future far better than any outside authorities, in government, corporate America, and Wall Street's institutions. It's easy to do so with mutual funds.

An explosion in mutual funds

Nowhere is this trend toward self-reliance and independence more obvious than in the explosive growth in the mutual funds owned by individual investors. US mutual fund assets have exploded more than twenty-fold since the mid-1980s Fidelity Investments alone, the largest US mutual fund family is now larger than the entire mutual fund market of the mid-1980s.

Today there are over 10,000 funds to choose from, a tenfold increase over the mid-1980s, with 500 to 1,000 new funds being added every year. In fact, there are now more four- and five-star top-performing funds than there were total funds a decade ago. As a result, advertisements for mutual funds are now so loaded with stars they look like ads for Hollywood movies.

Four phases in America's financial revolution

Phase One. The advent of the discount broker in the mid-1970s marked the start of the individual investing revolution. Savvy investors suddenly had a bonanza of new options.

Phase Two. Beginning in the early 1990s, the number of investors with on-line brokerage accounts at Schwab and the other on-line pioneers grew from fewer than 100,000 in 1993 to more than 5 million in five years. Fifteen million more were predicted for the early years of the next decade.

Phase Three. The late 1990s brought new on-line tools and the continuing proliferation of financial information � making it possible for individuals to manage the explosion in mutual fund choices. This effectively diminished Wall Street's historic monopoly on financial information, and empowered individuals to take command of their portfolio choices.

Phase Four. From 2000 on, investment technologies are advancing so rapidly that all individual investors have access to on-line power tools that can automatically handle all the analysis, planning, portfolio monitoring, and trading, as do-it-yourself investing becomes the standard.

Investors' demand for new investment opportunities is so intense today that fund managers, brokerage firms, and financial advisers are doubling and tripling their advertising budgets to capture market share, and are routinely moving into the television and Internet media.

Fueled by this increasing tide of new advertising monies, the major financial magazines are expanding coverage of mutual fund news substantially, providing their readers with more and better information with which to make financial choices. The cost is next to nothing compared with brokerage fees.

You can do it better yourself

True, the amount of information out there presents its own challenges. But the good news is that information continues to get better and cheaper. Investors are discovering a host of new keep-it-simple solutions, and not just through high-tech and online resources.

Driven by a commercial need to sell their periodicals and to compete for ad dollars and readers, even the print media are transforming themselves into low-tech wholesale providers of professional-quality financial advice. Whatever you need to know about your mutual funds - it's out there and easy to get.

Being a do-it-yourself investor means using a total approach and focusing on mutual funds for the long term. It means integrating financial planning, simple asset allocation models, and disciplined portfolio management. Do-it-yourself investors should never chase the hot fund of the week or gamble their future on short-term market swings. They want funds and fund managers with long-term, proven track records.

Creating a winning mutual fund portfolio with appropriate asset allocation models is an ideal way for investors to keep it simple and eliminate the cost of the middleman.

Burton Malkiel - former member of the Council of Economic Advisers, former governor of the AMEX, and author of A Random Walk Down Wall Street�- offers this bit of encouragement: "Many people say that individual investors have scarcely a chance today against Wall Street's pros...Nothing could be further from the truth. You can do it as well as the experts - perhaps even better." Do it yourself.

Excerpt from:

The Winning Portfolio: How to choose the best mutual funds

By Paul B. Farrell

Publisher: Vision Books

Price: Rs 145

Paul B. Farrell, J. D., Ph.D., is the mutual funds editor of CBS MarketWatch, where he writes the "Farrell-on-Funds" column and maintains the SuperStar Funds database. He is the author of three previous books on investing and has been an investment banker with Morgan Stanley, associate editor at The Los Angeles Herald Examiner, and chief operating officer of the Financial News Network, USA.

--------------------------------------------------------------------------------

URL for this article:

http://www.rediff.com///money/2007/jun/29mf.htm

If your NRI friend is a 'invest and forget' kind of person, Stan Chart might not be such a good idea. If (s)he can track the performance of the fund regularly, then it might be ok.

You don’t have to be a capital market wizard to know that the past three years and more have been superlative for equities. Stocks have surged ahead, firmly shoring up India’s stature among all emerging markets. Equity funds have, generally speaking, put up a good show during this phase. The top performers among them have actually turned in over 65 per cent, considering the end-June numbers.

So, what are funds such as LIC Mutual Fund Equity, UTI Master Value or Birla Dividend Yield Plus really doing, having delivered extremely uninspiring returns, lower than 35 per cent in each case?

Witness the returns generated by the best names, featured on the other side of the spectrum, and you will realise how different these are from the laggards. Just for the record, Magnum Global, Magnum Contra and Sundaram BNP Paribas Select Midcap have provided 73 per cent, 68 per cent and 66 per cent respectively.

And if you are stumped to see the differences between the laggards and the leaders (on a three-year basis), you will indeed be shocked by some of the one-year scores.

Consider the winners. Standard Chartered Premier Equity has 79 per cent to its credit, followed by ICICI Prudential Services Industries (76 per cent), JM Basic (73 per cent), ICICI Pru Infrastructure (64 per cent) and DBS Chola Opportunities (64 per cent). At the other side are JM Emerging Leaders (12 per cent), DBS Chola Global Advantage (15 per cent), Principal Dividend Yield (19 per cent), UTI Contra (20 per cent) and ABN Amro Dividend Yield (20 per cent). All these figures, pertaining to June 30, are taken from Value Research.

We are not trying to confuse you here with too many names. We are only attempting to bring to your notice a simple thing – a poorly performing equity fund, which obviously has an messy portfolio of stocks, can ruin your case even if the overall market is doing well.

Sometimes, funds managed by the same asset management company can display wide differences in returns. JM Emerging Leaders, positioned as it is at the bottom of the heap, is obviously having a bad time. JM Basic, on the other hand, is among the best performers. We are talking about one-year scores here, mind you.

How are the players positioned over a five-year period? Take a look at the latest stats. Reliance Mutual Fund and SBI Mutual Fund are two fund houses with a special distinction. Each has two representatives in the grand list (‘Top Five’). Reliance Growth (59 per cent), Magnum Contra (57 per cent), Magnum Global (56 per cent), DSP Merrill Lynch Equity (52 per cent) and Reliance Vision (51 per cent) make up the coveted set.

The ‘Bottom Five’ is made up of LIC MF Equity, Taurus Discovery Stock, UTI MNC, ING Select Stocks and UTI Mastershare. These have provided returns in the 28-34 per cent range.

It is for the fund houses concerned to correct things that are going wrong. A consistence underperformance will not get them more assets. Instead, assets will deplete and more investors will consider pulling out. For the fund managers, the moral of the story is simple: Perform well, assets will grow; perform poorly, you will have to look for your next job sooner than you thought.

Fund managers find the Street too smart

“Equity investments are just 3-4% of India’s household savings,” is a favourite refrain from mutual fund (MF) managers, especially when questioned about the prospects of new equity schemes. They do have a point there. But if this proportion is to grow, then fund managers need to certainly pull up their socks.

A DNA Money analysis of the one-year returns of 152 diversified equity funds shows that 74 of them, or almost 50% of them, have failed to beat their benchmarks. And 57 of them have failed to beat the Sensex. The situation was worse a year back, in 2005-06, when nearly 90% of the equity funds failed to beat the Sensex.

The regulations governing the MF industry require each scheme to have a benchmark index.

This is meant to help the investor figure out whether the MF is giving good returns because of the investment abilities of the fund managers or good market conditions. An MF scheme is deemed to have done well, if it beats the returns of its benchmark index and vice-versa.

That throws up the question: why should anyone invest in an actively managed equity fund when they can get better returns from an index fund? Index fund is an MF which collects money from investors and invests them in stocks that make up a stock market index, in the same proportion as their proportion in the index.

Sandesh Kirkire, chief executive officer, Kotak MF, has an explanation. “Over a long period of time, the Indian market is a stock pickers’ market.

One reason for the underperformance of so many schemes could be that assets under management (AUM) of equity funds have witnessed a phenomenal growth in the recent past. What was Rs 31,834 crore in January 2005 has now grown four-fold to Rs 1.26 lakh crore.

When AUM swells, it leaves the fund manager between the devil and the deep sea. If he decides to retain the funds collected and not to invest, the returns would go down.  If he decides to invest in a stock which he already owns and which would have probably gained handsomely, his returns are again reduced to that extent. The last option — to buy stocks which the fund manager would not have bought if the AUM were smaller — will again slacken returns.

Jason Zweig, in his commentary to Benjamin Graham’s investment classic, The Intelligent Investor, cites another reason. “As a fund grows, its fees become more lucrative - making its managers reluctant to rock the boat. The very risk that managers took to generate their initial high returns could now drive the investors away - and jeopardise all that fee income. So, the biggest funds resemble a herd of identical and overfed sheep, all moving in a sluggish lockstep, all saying ‘baaaa’ at the same time.”

In the all-time classic, A Random Walk Down Wall Street, Burton G Balkiel explains that over the entire 30-year period from 1973 to 2003 “two-third of the funds (in the US) proved inferior to the market as a whole”. The last thing we want is an Indian encore.

Complete article http://www.dnaindia.com/report.asp?newsid=1111657 - here on DNA Money

These two are the best but if you want to diversify try Reliance Tax saver and ICICIPRU.

Originally, I had the same opinion before. But after Sandip Sabharwal's entry in JM, most of their funds are now in Top 10 performers. It can't just be a coincidence, can it? I think Sandip changed the process of stock picking at JM too, thereby improving the performance of most JM funds.

http://www.dnaindia.com/report.asp?newsid=1137482 - Churning kills returns

Investors generally churn their portfolios because they are advised by their mutual fund agent/advisor to do so. The agent often passes back to them a portion of the commission he earns as an incentive to induce the churn.

Also, there is this inexplicable urge in investors to invest in funds with lower net asset values (NAVs) or new fund offers (NFOs) that leads to a churn.

Whatever be the case, it should be understood that exiting one fund and subsequently reinvesting in another could involve additional costs in the form of exit load or entry load or in some instances both. And over the long term, these costs add up and have a detrimental impact on the returns.

The onus to not get carried away by ‘motivated’ sales pitches of the investment advisor and make an informed investment decision lies with you.