When A Fund Underperforms | Alok Jain

WeekendInvesting • 1 day ago

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What This Video Is About

The video explores the relationship between a fund's size and its performance, highlighting the challenges larger funds face in maintaining their edge.

Major Ideas Discussed

  • As a fund grows, it becomes difficult to invest in smaller, more nimble stocks, reducing its flexibility.
  • Larger funds are forced to invest in more liquid, large-cap companies, decreasing their universe of available investment opportunities.
  • The Parag Parikh fund is cited as an example, with its AUM growth rate slowing significantly after crossing the ₹1 lakh crore mark.
  • Funds can be categorized based on their AUM size, with different categories facing unique challenges.
  • Investors should consider a fund's size and category before investing, evaluating its performance relative to its own category.

What to Watch Next

Investors should monitor the performance of funds in different AUM size categories, considering the potential impact of size on their investments.