Mutual funds are not just a numbers game

With leadership positions changing every few years, betting on past performance may not be good idea

If you were to choose between a mutual fund (MF) that gave 24 per cent annualised returns for 20 years and a scheme that has 20 per cent annualised returns for the past five years, the choice will be obvious. A fund with higher returns over a longer duration appears to be a consistent performer that has weathered many market cycles. But, if an investor would have made the “obvious” choice five years earlier, his returns would be much lower.
 
Franklin India Bluechip Fund has given 23.91 per cent return over the past 20 years, while Mirae Asset India