<div><em>Rather than waiting, exiting from IDFC Premier Equity Fund could be the right thing, says <strong>Sunil Dhawan</strong>. Read on why?</em></div><div><br> </div><div>Mutual funds investors, especially those who are holding units of IDFC Premier Equity Fund, have a common question in mind. Should they continue or exit? The news is that Kenneth Andrade, head of investments at IDFC Asset Management Company (AMC) and the fund manager of IDFC Premier Equity Fund has quit. </div><div> </div><div>Managing mid-caps space is not as simple as managing large cap funds especially when it comes to managing huge corpus and not finding the right stocks to invest in. IDFC Premier Equity Fund, a mid and small cap fund, has a corpus of about Rs 7,200 and is probably the only open-ended fund that opens its window for fresh subscription intermittently. Investing in IDFC Premier Equity Fund however is always open through the SIP mode and for the last 7-8 years, the fund has been a regular in most investor’s equity portfolio. </div><div> </div><div><strong>What change</strong>s: Kenneth had been a winner stock-picker. His stock-picks may or may not perform while in his absence the decisions around these stocks will matter hugely. Further, the potential to identify future winner may not necessarily be seen in the new manager. On the contrary, the fund may do as well. The uncertainty prevails. </div><div> </div><div><strong>Performance:</strong> When it come to performance, its been a consistent performer since its launch. The fund has been able to beat its benchmark regularly however of late the performance against its peers has been the matter of concern. The others are doing much better. See ‘Performance’ below.</div><div> </div><div><strong>What to do</strong>: Had it been any other run-of-the-mill fund, the decision could have been different. With IDFC Premier Equity Fund, whose stellar performance came largely on the back of solid investment acumen of Kenneth Andrade, the answer could be fairly simple. Existing investors may exit and redeploy the proceeds elsewhere. New investors contemplating to invest in IDFC Premier Equity Fund may choose to consider other funds. In fact, all funds where he directly managed may be exited. </div><div> </div><div>As a practice, AMC needs to be more proactive in reaching out to the investors in such developments when the fund manager leaves. This becomes more important when the fund is backed by ‘fund manager’ and not by the investment team as perceived by investors at large. In these times of social media, when there’s no such update to investors about a major change in AMC’s website, Facebook, Twitter page, much needs to be thought about the role of social media. Its time, they stop making use of these platforms only for showcasing laurels and awards they win.</div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div>
