Managing people’s hard-earned money is a fiduciary responsibility. Keeping invertors’ interest first before your own and handling the money with care and prudence — much as you would do while managing your own — is at the core of the fund management business. For this, integrity, transparency, proficiency, and having a robust investment process and systems, plus risk management controls in place at the fund house are essential. Instilling an ethical culture in an organisation along with placing controls is important.
These key facets have since inception helped us run Quantum Mutual Fund smoothly, seamlessly, with full responsibility, checks and balances in place, staying true to our core values, and retaining the trust of our thousands of valued investors.
For investors, while building wealth or preserving it is the objective, it pays to understand the fund house’s ideologies and what it stands for. Plus, recognising if the fund house really walks the talk – that is, what preached is truly practised in letter and spirit.
Just looking at returns to invest in mutual funds is not everything. Investors first need to assess if their hard-earned money will be managed with integrity, responsibility, and proficiency (backed by processes and systems). Once that criterion is satisfied, then take the next to invest sensibly following a prudent asset allocation.
Asset allocation serves as a strategy that could balance the risk-return trade-off by spreading investments across asset classes. At Quantum Mutual Fund we broadly recommend the time-tested 12-20-80 Asset Allocation Strategy that provides adequate exposure across asset classes. Doing so makes it possible to save for a rainy day or an emergency (with 12 months’ worth of regular monthly expenses, including EMI on loans parked in a liquid fund/savings bank account), build wealth with equities (with sensible long-term investing), and hedge the portfolio with gold (by investing in a gold ETF and/or gold savings fund). Further, adding a multi-asset fund may also be considered to clock a slightly better rate than a bank FD.
That being said, we also encourage investors to follow their personalised asset allocation considering their age, their financial situation, broader investment objective, the financial goals being addressed, and the time in hand to achieve those envisioned goals. Further, we encourage diversification in the best and most suitable schemes across fund houses.
Such thoughtful investing makes it possible to survive the market ups and downs without having to time the market, and instead focus on time in the market i.e. build wealth discipline and patience. “ We don’t have to be smarter than the rest, we have to be more disciplined than the rest,” says legendary investor, Warren Buffett. When this advice is diligently followed, you overcome emotions and it is possible to make rational investment decisions. Besides, brings with it stability, protection, and potential growth.
Be a ‘thoughtful investor’ and take the small yet correct steps while you pave the path to wealth creation.
(The author is the MD & CEO of Quantum Mutual Fund.)