He posted on social media platform X: “There is no point in trying to invest in the number one fund because it changes so quickly. Ranking by best performers is not an investment strategy. Consistency matters much more.”
Gupta mentioned that many research reports have shown data proving that there is no point in trying to invest in the top fund.
According to Gupta, websites still occupy a prominent place mutual funds For best discrete returns and not for continuous returns, which measure consistency. Every mutual fund company knows that if their scheme is ranked first, they will receive huge capital inflows, which will come from unrealistic expectations.
“However, websites continue to be ranked based on the best discrete returns (not continuous returns which measure consistency). Every AMC knows that if their scheme ranks first, they will get a flood of money, which will be backed by unrealistic expectations,” the CEO posted.
There is no point in trying to invest in the number one fund because it changes so quickly. Ranking by best performers is not an investment strategy. Consistency is much more important.
Numerous research reports have shown data confirming this first line. Again and again. Thank you. @FundsIndia for… https://t.co/1mkGL2lRNy
—Radhika Gupta (@iRadhikaGupta) August 25, 2024
This came in response to CA Abhishek Murarka, wealth manager of Angel One Wealth published on a report by Arun Kumar of FundsIndiaMurarka mentioned that the top-ranked mutual fund scheme in 2018-2020 is now ranked 190 for 2021-now. The scheme which was ranked 2 is now ranked 192.
He added that the highest-ranked scheme for the 2021-present period was ranked 160th in the 2018-2020 period. This shows that things change. You cannot invest by looking backwards.
The top-ranked mutual fund scheme in the period 2018-2020 is ranked 190 from 2021 till date. The 2nd rank is now 192.
The highest-ranked plan between 2021 and today was ranked 160th between 2018 and 2020.
You see, things change, you can’t invest looking back.
Source: FundsIndia report prepared by @arun_kumar_r
— CA Abhishek Murarka 💹🐂 (@abhymurarka) August 24, 2024
The FundsIndia report mentioned that despite Indian equity markets seeing intra-year declines in all years, 35 out of 44 years ended with positive returns.
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