April 8, 2018

Why You Should Not Invest in Only One Mutual Fund AMC


We often struggle to find good mutual funds to invest. Some then decide to invest all the funds in one AMC or mutual fund house. There may be thousands of reasons for that for selecting a single AMC to invest with including investment strategy of the fund house, smaller product list, good track record and more. I am going to tell you why you should not invest in only one mutual fund amc.

Strategies Defer with AMCs

Some strategies work and some do not. Our focus is to understand the strategies used by different mutual fund houses and invest in winning strategies that provide higher returns. Investment strategies changes with time and market. If you are investing in only one AMC and time and market is against it, then your returns will be lower than expected. It is better to understand our own cognitive biases and try to take proper decisions.

cognitive biases Why You Should Not Invest in Only One Mutual Fund AMC

Quantum Mutual Fund AMC has Clear Investment Strategy, Small Fund list and the customer care is better. They are the first direct fund, low cost, conservative with good downside protection.  It invests in BSE 200 but conveniently uses Sensex TRIas benchmark. It has a complex exit load structure.

Franklin Templeton has good track record and they have the buying power for all the junk funds too.
UTI disclose scheme expense ratio.

Why Diversification is Important

Why You Should Not Invest in Only One Mutual Fund AMC? 
You are here to make money and not to get married!

Diversification of mutual fund AMCs is as important as diversification of portfolio. Choose funds first and then invest in them and then check the investment strategies of the respective AMCs. Diversifying the AMC also help in reducing risk when market crashes, fund managers resigns, new owners take in charge or even the fund house just close down. It is better to take these into consideration and not investing in only one mutual fund amc.

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