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Prashant Jain left HDFC Mutual Fund. What will happen to your investments?


Prashant Jain, CIO, HDFC Mutual Fund, and arguably the most famous mutual fund manager in India left the fund house after a long stint of 19 years. As investors digest the news, they are asking aloud whether Jain’s departure from the fund house will have a major impact on their investments in various schemes of HDFC AMC.

Sure, many investors used to blindly choose various

AMC schemes because of Jain’s name and the goodwill of the HDFC brand. Such investors may be asking questions about the prospects of their investments. We already know that HDFC Mutual Fund has appointed Chirag Setelvad as the head of equities of the fund house. Setalvad has been associated with the fund house for more than 15 years. He also worked closely with Prashant Jain all these years. Shobhit Mehrotra is appointed head of fixed income.

We always ask investors to avoid taking any hasty decisions on the basis of changes in the fund house. Sure, the departure of a key person like Prashant Jain will be felt within the organisation. However, appointment of Setalvad and Mehrotra, long associated with the fund house, assures some comfort. It clearly indicates that the fund house will assure continuity.



You would also know that most fund houses rely on process. This limits the role of an individual in decision making. Sure, Prashant Jain was known for ‘conviction bets’ that used to result in phases of underperformance and bounce backs. That shows he had a great leeway in setting the investment strategy. This is something you need to watch out for. Unlike Jain, the new team might not take such contrarian bets based on conviction as they may find it difficult to justify periodic underperformance.

Finally, you need to closely watch the performance of schemes and changes in the investment strategy. Setalvad is no greenhorn – he has already proved that he is a reliable fund manager. All you have to do is to watch whether he will be able to fill the shoes of Prashant Jain. In fact, the entire mutual fund industry would be eagerly watching it.



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