Recently ICICI announced the launch of ICICI Prudential Real Estate Securities Fund. Its advertisement came with the picture of how the landscape of bangalore has transformed over the years, so naturally I became interested. However, the moment I started reading its offer documents, I realized that this fund has no intentions in owning and developing a property. All it will do is take your money and invest in a debt scheme/bonds.
Similarly, a couple of months ago a lot of global funds were launched which claimed to invest in international securities. I was keenly interested in them, because it would help me in hedging my risks, and reduce my portfolio’s dependence on the performance of BSE Sensex. However, yesterday, when I visited their website to check their portfolio, all I found that they were either sitting with huge stockpiles of cash or 90% of their portfolio consisted of either Indian stocks or ADRs of Indian stocks…. which totally contradicts their advertisements, or investment rationale.
Today there was an article in moneycontrol how all the index funds (irrespective of the fund house) have underperformed the index… Surprised!!!! well this is what happens when index funds does not invest in stocks which forms the index.
The point is that that please do not fall for the jazzy advertisements and facade…. go check the history of the fund and its current portfolio before giving them their money.