Finding the perfect match: Fund managers are your financial co-pilot
Subscribe to enjoy similar stories. MUMBAI : Imagine you’re planning a cross-country road trip and need to choose a driver. While having a driver’s licence is essential, it’s not enough.
You would prefer someone with experience touring across the country, perhaps in different seasons. Similarly, selecting the right fund manager is as important as picking the right mutual fund for your financial journey. After all, just having a licence doesn’t make someone the best driver.
Contrary to popular belief, you should look for a fund manager who aligns with your investment goals rather than chasing the most popular or high-profile one. For example, imagine signing up for a wellness retreat expecting relaxation through yoga, only to discover that your instructor’s idea of wellness involves steep treks, cycling and rock climbing. The instructor may be highly regarded, but their regimen may not suit your needs.
Similarly, consider the fund manager’s investment style and decision-making. If they take aggressive, outsized bets, it may be overwhelming for a conservative investor with a low-risk tolerance. Conversely, a more aggressive investor may find a conservative manager’s approach unsatisfying.
In either case, the likelihood of exiting the fund before it reaches its full potential is high, contributing to the gap between investment returns and investor returns. Even if the fund performs well, you may miss out if the management style doesn’t suit your investing preferences. In team sports, the captain often gets credit for victories, but success is usually due to a combination of factors: players' skills, training infrastructure, coaching vision and more.
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