What does the fund name mean

A part from the problem of plenty facing investors pick ing mutual funds on their own, another headache is the confounding nomenclature that prevents them from actually identifying a suitable fund.

All in the name

Names of several schemes are either confusing, vague or give no clear indication of where they seek to invest. A reference to blue-chip, mid-cap, top 200, emerging businesses, dynamic or value in the scheme name instantly tells you about the fund’s mandate. But some schemes simply do not afford you that luxury. Sample a few: UTI Bluechip Flexicap Fund. The name makes no sense–is it a large-cap biased fund with added freedom to roam into other segments? A look at its investment objective reveals it aims to achieve long-term capital appreciation andor dividend distribution by investing in stocks that are “leaders“ in respective industries, sectors or sub-sectors. Wouldn’t `Industry Leader’s Fund’ been a better fit?
Some names are downright misleading like Templeton India Growth Fund.Unlike what the name suggests, this fund is actually known to ply a value investing strategy. The `growth’ and `value’ styles of investing are as different as chalk and cheese, with the latter being a path far less travelled.

Already confused, investors are further stumped by misleading names

Some funds have over the years changed their mandate but kept the original name intact, leading to a gap in what the name suggests and what it does. Franklin India Prima is a case in point. It was named owing to its initial objective of participating purely in primary market offers, but it later changed focus to investing in high growth small and mid-cap companies.

Some names do not reveal a specific agenda. Take for instance the funds seeking to make good of some `opportunities’–UTI Opportunities, Birla Sun Life India Opportunities, Kotak Opportunities and Mirae Asset India Oppor tunities, among others. The schemes have varying mandates. One focuses on riding export-oriented businesses, ofund namethers aim to capitalise on reforms and structural shifts in the economy , and so on. There are some like Taurus Bonanza and Reliance Vision which give no indication of where they put investors’ money . Other fancy names like Sundaram S.M.I.L.E, DSP BlackRock T.I.G.E.R and Canara Robeco F.O.R.C.E can leave investors scratching their heads.

What you should do

Investors need to dig deeper to figure out whether these products are suitable for them or not. A closer look at the fund objective in the fact sheet or scheme information document should help clear things to an extent.

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