Capitalmind Podcast The Unexpected Impact of investing in Mutual Funds and Pooled Vehicles
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Mar 6, 2025 Explore the quirks of mutual funds and pooled investments, revealing how actions of other investors influence your returns. Delve into case studies like Yes Bank and DHFL, which highlight the hidden complexities of pooled vehicles. Understand the critical impact of inflows, outflows, and timing on asset valuations. Learn the differences between ETFs and mutual funds, and the strategic decisions investors must make in volatile markets. This insightful discussion offers guidance on navigating the challenges of investing in these intricate funds.
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Complexity of Pooled Vehicles
- Pooled vehicles like mutual funds offer simplified access to diversified portfolios.
- However, they introduce complexities due to the dynamic nature of inflows and outflows.
Impact of Inflows
- Inflows can alter a fund's composition, impacting your initial investment strategy.
- Other investors' actions can dilute your exposure to desired assets, like foreign stocks or small-caps.
Bangalore Startup's Loss
- A Bangalore startup invested a large sum into a debt fund before a known default.
- This money was used to redeem exiting investors, transferring the imminent loss to the startup.