But if that was the case, it's hard to understand why established and welldisposed names like TCS, Infosys , ITC, HDFC Bank and ICICI Bank feature prominently in portfolios of contra funds. Then there are the evergreen 'opportunities' funds. One would expect funds with this billing to display an opportunistic streak and invest in a freeflowing manner. But there are several opportunities funds with professed biases. For instance , some invest predominantly in the large-cap segment.

Then there are others which choose to be loosely aligned to their benchmark indices. An opportunities fund with a constrained investment style is a contradiction of sorts. Also, let's not forget the on and off, flavour of the season - infrastructure funds. It would be reasonable to expect an infrastructure fund to largely target sectors like capital goods, construction and power. But, thanks to a rather ambivalent definition of the infrastructure theme, you shouldn't be surprised to see infrastructure funds with nearly one-fourth of their portfolios invested in financial services and telecom stocks.

Sadly, the list of funds whose billing is inconsistent with how they invest or even ones whose names don't reveal much is a long one. Asset management companies have their reasons for positioning funds in a given manner. Since investors are prone to making investments in trendy funds, the billing makes it easy to garner assets. The trouble starts when investments are made based solely on the billing. Let's not forget that each fund has a specific role to play in the portfolio.

For instance, a diversified equity fund can be included as a core holding and be expected to deliver a stable performance over the long haul. Conversely , a thematic fund could be earmarked for a niche role, to provide impetus to the portfolio. But if both the funds have similar portfolios and deliver a like showing, it certainly doesn't help the investor's cause. Then, there could be the case of a potential pitfall on account of risk not being communicated. Say, an aggressively run fund offering a high risk/high return proposition has a name that belies its true nature. A risk-averse investor investing a substantial portion of his portfolio in such a fund could be headed for an unpleasant surprise.

This is where the advisor's role becomes important. The onus of looking beyond the fund's name and billing, and understanding its true nature lies with the advisor . He should be able to cut through the noise and determine the fund's suitability for investors. This, in turn, reinforces the importance of having access to competent and unbiased advice, while investing. Maybe Shakespeare was right when he questioned the relevance of the name in the context of a rose. But it would be prudent to not draw a parallel between roses and mutual funds.

Source : ET Bureau