Lame Financial Products: Would You Trust Your Money With These Funds?

by Vinaya HS on November 25, 2007

in Finance

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It pays to conduct due diligence before you dump your hard-earned money into any of the harebrained NFOs (New Fund Offers) from Mutual Fund houses in India.

For example,

ICICI Prudential Real Estate Securities Fund

The fund manager says that this is the first of a kind offering in India and with back of the envelope calculations he tells us that the fund will deliver around 13% year on year, if the stock market rises around 20% per year.

If relying on someone’s back of the envelope calculations is how you define your investment strategy, this fund’s for you. I wouldn’t touch this fund with a pole. And I absolutely hate lame portfolio theories.

ING Global Real Estate Fund

The fund manager also explained that since it invests in REITs (Real Estate Investment Trusts) and stocks in the commercial space, the fund does not have any exposure to the US sub-prime housing sector. However, as the fund manager himself confesses, if the sub-prime crisis and the global economic slowdown brings down commercial real estate rents, the performance of the fund will suffer.

The fund manager doesn’t trust his investment philosophy himself. Why the hell should you?

Classic “WTF mate?” products. Let me know if you still want to dump your money into these funds. I’d love to listen to your logic.download house mp3|Download Celine Dion MP3|Download Spice Girls




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