A mutual funds investor’s guide to taming the markets
Live MintEasy access to information and digitisation of the mutual fund industry have made investing a quick and easy process, allowing investors to express their investment decisions to buy and sell at the click of a button. The average equity investor underperforms To understand how well the average equity investor performs in comparison to the market, we analysed the net fund flows into open-ended equity schemes over the last 10 years. The difference between the returns generated by the average equity investor and the Nifty 500 TRI is highlighted in the below given 'Behavior Gap' chart. Over the entire period, the average equity investor was worse off by 4.7 percent per annum primarily due to discretionary investment decisions of buying and selling. Over the entire period, the behavior gap for the average debt investor was considerably smaller at just 0.4 percent per annum.
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A mutual funds investor’s guide to taming the markets
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