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The ministry of food and consumer affairs extended the subsidy on pulses...

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The ING Multi-Manager scheme is an asset-gathering gimmick

Despite its own patchy performance, ING Mutual Fund has come up with the idea of choosing funds for you and funneling your money into them

"Mutual fund investing today has become complex and stressful. Investors need to choose from thousands of funds, closely track their performance, take decisions to retain or change funds, attract tax liability if funds are changed before 12 months and finally, reconcile all these holdings at the end of the year. ING IM's unique Multi-Manager Fund of Funds' capability simplifies all of this in an instant," according to ING Investment Management India managing director & CEO Navin Suri, at the launch of ING's latest FoF (Fund of Funds).

It is great that ING, being a fund management company, has noticed a flaw in its own business model! Will ING's FoF solution work? In fact, is ING even qualified to offer a selected portfolio of best funds? If it could, why can't it select the best stocks to buy?

This scheme will funnel your investment to different schemes; the selection is solely on the discretion of the ING fund managers. You are just given the liberty to choose from four risk profiles-'cautious', 'conservative', 'prudent' and 'aggressive'- each offering a different mix of asset classes.

You will be informed about the funds in your portfolio but only after the investment is made by the fund manager. Again, if the process was so good, why is the performance of ING's schemes so average and erratic?

ING will hope that financial advisers can throw their clients' cash into multi-manager investment funds. These funds can save financial advisers the trouble of picking individual funds for their client by allowing them to put the cash with one fund manager, who then spreads the money across a range of other funds and asset classes. ING OptiMix Financial Planning Fund, an open-ended FoF scheme aimed at simplifying investing in mutual funds, does the same thing.

The question whether the performance of these funds lives up to the theory is answered with a disappointing 'it depends'. Firstly, it depends on what you're measuring. What will you compare the FoF with? For one, there are additional costs involved in the multi-manager approach. Not only is there the cost of underlying funds, but there is the cost to be paid to the multi-manager, in this case ING.

Very few active funds consistently beat the market when charges are taken into account. If you add in an extra level of charges, the evidence is even more stacked against you. The chance of picking the one that can beat the market is very slim.

No wonder that the ING OptiMix 5 Star Multi-Manager FoF Scheme - Growth and ING OptiMix Multi-Manager Equity Fund - Plan A - Growth have given returns of just 10.65% and 1.23% respectively since inception in 2007. ING's own equity fund, called Core Equity, has given a return of 12% since 1999 as against 17% by the BSE 200. The multi-manager idea is a simple gimmick to collect money.

User

COMMENTS

Rohit Madaan

6 years ago

I also came across an article by Financial Express on the new multi manager fund by ING
http://www.financialexpress.com/news/ing...

REPLY

Ranjita

In Reply to Rohit Madaan 6 years ago

since when has FE become a credible source of investment analysis?

Anantnag Katkar

6 years ago

I agree with Yogesh. I have invested in thei 5 star fund and it has given 12% returns in just 1 year which is more than the benchmark. Also as per Money life comments, this fund has given 10% returns where the benchmark gave just 8% returns. Money life team should show transparency in writing such articles as these mislead the investors from making an informed decision.

REPLY

Ashok

In Reply to Anantnag Katkar 6 years ago

Why are you talking rubbish to confuse other readers?
1. The article does not talk of 1 year performance
2. The article talks of performance since inception
3. Where are you reading 10% and 8% in the article
4. Do have any counter to the DATA ACTUALLY PUBLISHED?

You as a reader show some restraint before coming here are misleading others

Yogesh

6 years ago

I feel Money Life does not do their homework well before guiding investors like us. There is no extra layer of cost involved in a multi manager fund. Infact this is the only fund of fund which offers gold ETFs in its portfolio.
Pls read the review of a more credible media house like Hindu Group;
http://www.thehindubusinessline.com/feat...

REPLY

Rakesh

In Reply to Yogesh 6 years ago

Extra layer of cost comes anyway. ING is not into charity. Since it funnels money directly into other funds, there is no commission paid. Where is that money going?

Gold ETF in the portfolio is offered by many funds like Religare and Canara Indigo

Please do you homework before commenting here

Nistha

In Reply to Rakesh 6 years ago

@Yogesh
Hindu is credible? What has it published on 2G scam? And Hindu as a source of credible business and investment analysis? What a joke! I have seen only company handouts there

Mukesh Parikh

6 years ago

SEBI should before approving any new NFO,they should ask AMC to improve performance in existing schemes where several hundred crores of investors(mostly retail and small investor) are locked up.I have heard Fund Manger getting performance incentive during bull market but never heard Fund Manger drawing reduced salary for non-performance.Investor must now start raising voice about such Fund Mangers. It is very easy to find worst performers.....You can find them in bottom 5 laggard on any Financial portal analysing MF schemes.

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