Do you have L&T or Principal Funds? ....then read on...
Sundaram has taken over Principal Funds.
HSBC has taken over L&T Funds.
In both the Fund Houses, the fund management team of fidelity will be there until the transition.
L&T itself had earlier taken over Fidelity funds and did a pretty decent job
SUNDARAM & PRINCIPAL :
Sundaram has been an old player in the Indian Mutual fund space and has a good name amongst both investors, distributors, and advisors
Principal has pretty good funds in its portfolio and in fact, with the Principal acquisition, Sundaram will have 3 funds in TOP 10.
Sundaram till now was more of a Midcap/Small Cap focussed fund house
Principal is more of a Large cap focussed fund house and thus this merger definitely is good for investors as well.
HSBC & L&T
The HSBC takeover of L&T is a definite surprise even for experienced people in the Mutual fund industry as most of the foreign Fund Houses (Morgan Stanley, JP Morgan, and recently Principal) have been quitting the Indian Mutual fund space and HSBC has done the reverse by going for a takeover and strengthing its presence in Indian Mutual fund space
HSBC taking over the L&T mutual fund house shows the seriousness of HSBC towards its Mutual fund business and is definitely good news.
HSBC has been adding good, high-quality people to its team in the recent past, showing it is indeed here for the LONG TERM and this takeover of L&T AMC will help it gain a foothold on retail money.
WHAT SHOULD YOU DO ?
Any takeover /merger calls for caution and needs to be observed closely as there will be a definite shuffle in the Fund Management team and some funds will inevitably get merged.
This merger could also lead to a fund that was aggressively becoming conservative and vice versa.
If this happens, then there is a definite need to have a RE-LOOK into continuing the investments
or maybe even increasing the allocation.
It also needs to be seen whether funds underlying objectives are being tinkered with.
Also, the Fund Management Philosophy of the new team should be understood.
Investors are encouraged to watch the performance of both the Sundaram and HSBC funds closely over the next 3 quarters before taking a decision over adding or exiting the funds.
Do not quit or sell out in a hurry as any player who takes over will want to prove that he is indeed good and worth your trust.
Observe this closely
Let me give you an example :
Japanese Fund House Daiwa fund house was taken over by SBI
A large-cap fund named Daiwa Industry Leaders fund was promptly changed to SBI Small and Midcap fund which completely disturbed an investor's portfolio allocation.Asset allocation went for a TOSS!!
This type of tinkering should by default lead to rebalancing in your portfolio.
So
You HAVE to wait for 2-3 quarters
But if there is any change in fundamental attributes
MOVE AWAY, especially if it is going to affect the basic reason WHY you invested in the fund
Regards,
Srikanth Matrubai
Author: Don't Retire Rich
Book available on Amazon https://amzn.to/3cHUM6M/
All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH
Srikanth Matrubai
Author of the Amazon Best Seller DON'T RETIRE RICH
You can purchase the book on Amazon and Flipkart
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