Portfolio Management Services (PMS) cater to high-net-worth individuals and offer a personalized approach to investment management, typically with a goal of generating alpha (returns above a benchmark index).The outflow from the fund seeking to invest in sectors and stocks positioned for the next trillion-dollar GDP growth suggests that investors may be dissatisfied with its performance.
- Performance vs. Benchmark: The underperformance of the fund in both the short and long terms compared to its benchmark may have eroded investor confidence. Investors often expect active fund managers to deliver returns that exceed or at least match the benchmark index.
- Investment Approach: The fund’s strategy to invest in sectors and stocks benefiting from future GDP growth is a high-conviction approach. It requires thorough research and a well-executed investment strategy to identify such opportunities. If the strategy hasn’t delivered as expected, investors may choose to redeem their investments.
- Asset Allocation: The allocation of assets to large-cap and mid-cap stocks can impact the fund’s risk-return profile. The fund’s performance should be evaluated in light of its asset allocation, as different market segments may perform differently.
- Investor Sentiment: Market conditions, investor sentiment, and macroeconomic factors can influence fund flows. If investors perceive better opportunities elsewhere or have concerns about the fund’s future performance, they may decide to redeem their investments.
