Kuvera Quick Takes| Mutual Funds v/s the Direct Stock Route

Kuvera Insight

Q. Mutual funds may be a good option but why should I not invest in the stock market directly?

• World moving towards specialisation of labour
• Not everyone can do everything perfectly all the time
• Good to let experts handle the nuances since this is what they do all the time
• A professional fund manager comes with decades of training and practice which is the differentiator
• Whatsapp groups may not be the best places to depend on, for investment decision-making

Kuvera QuickTakes |Stock Selection within Mutual Funds

Q: What does an equity fund manager do, What sort of process does he/she follow in fund selection?

• Every fund manager has a different style for creating a portfolio and selecting stocks
• A fund manager is not interested in the volatility of a stock prices, but is interested in the core business
• Is the business generating economic value?
• The ability of the business to create economic value and whether the factors will continue to makes sense 4-5 years down the line
• Businesses within this subset that can continue generating value
• Compounding of value is of utmost importance
• Compounding of value can only happen if the business is able to in-turn compound its business delivery value

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Disclaimer: These conversations are only for educational purposes. Mutual Fund investments are subject to markets risk. Please read the offer document before investing