Author Topic: A good article on Portfolio Management Services  (Read 226 times)

Offline Mota Bhai

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A good article on Portfolio Management Services
« Reply #1 on: May 27, 2020, 01:16:13 PM »
Hello friends. I was reading Economic Times today and saw this very good article on Portfolio Managers. Do read the article...


Here is no easy way to say this. The portfolio management services industry is in a shambles. No, it's broken! It's a tale of promise belied, hopes shattered. The industry was born on the promise of superior performance -- superior to mutual funds, that is.


But what does the data say? The industry performance has been disgraceful, to say the least! We have given a table hereunder that shows you in crystal clear light, how poorly the industry has performed.


Whether you take three months, year to date, one year and three years. The returns (if one can even call them that) have been worse than putting money under the mattress. All PMS schemes are down on a three-month, year-to-date and one-year basis. Only a couple are marginally positive even on a three-year basis.


1. Extremely poor/ non-existent risk management - Nobody seems to have heard of any concept called 'stop losses'. It's just "it's a great story at Rs 4,000. It's very attractive at Rs 3,000. It's a no-brainer at Rs 2,000." Dude, you (or rather your clients) are down 50% and you are calling it a no-brainer?

2. Overly concentrated exposures in a handful of stocks - Many, if not all, had exposures to a handful of stocks. Usually financials and/or FMCGs. Both sectors have been hit at different points this year.
Concentrated portfolios may be a reasonable way to manage personal money, but absolutely no way to manage other people's money. In fact, it's downright irresponsible fund management. Nothing less.
For further reading please visit Economic Times using this link as I am not allowed to copy the full text.


Thanks

 

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