It's not unusual for a novice fund investor to be a little hazy about the actual fund he or she is invested in but know exactly what AMC the fund belongs to. The question 'What fund have you invested in?' often has a newbie answering, 'HDFC' or 'ICICI' or 'Franklin' or something like that. Knowledgeable investors are amused by such ignorance. Analysts and researchers like us are certain that this kind of hazy, brand-led attitude to investing is a sure recipe for disaster. We always exhort investors to just focus on the actual fund and ignore what AMC it comes from.
That sounds good in theory but in reality the power of the brand is undeniable. When we associate positive experience with something, we tend to believe that other things associated with it will also be positive. Moreover, there is at least something to be said to have a certain level of insight into the AMC that runs the fund where your money is invested. AMCs almost always have common standards of research and diligence across their products, common fund managers across many of the same type of funds, common level of customer service and, most importantly, common leadership at the top.
Generally, through the year, we don't pay much attention to looking at things at the AMC level. However, conducting a comprehensive survey of all AMCs is now a tradition. Each AMC's page gives the basic numbers as well as a short interview with the CEO. This helps our readers get a basic, standardised view of all AMCs regardless of their sizes or investor base. This is especially useful for those invested in smaller AMCs, which receive less coverage in the normal course.
This article was originally published on November 16, 2015.
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