Even the biggies make mistakes...

Templeton Asian Growth fund, managed by a well-known face ad name in India, Mark Mobius, ended its six-year reign as the biggest equity fund in Asia (excluding Japan). Poor performance, leading a second quarter of major investor withdrawals forced the Fund to take this step. Due to the falling markets, there has been major capital outflows, a run-up to the rise in US interest rates. Investors removed $500 million from the Asia Growth Fund in Jan-March quarter alone and the fund size shrunk to $11.8 billion. It returned 1.96%, which was much lower than the 4.9% returns of the MSCI All Country Asia ex-Japan index.

The Fund has blamed it all on Thai stocks. Templeton was extremely bullish about Thailand and was the biggest FII investor there. 29% of the entire Fund was allocated to Thai stocks alone. After the political turmoil there, Thailand and its markets have suffered a rude shock.

That apart, the Fund bet big in the energy sector – some 23% of the Fund was allocated to energy. Its major holdings were Pakistan’s Oil & Gas Development Co, which slumped 12% in current Q1 and Thailand’s PTT Pcl, which remained largely flat. The fund has reduced the share of energy in its portfolio from nearly 27 percent in mid-2014. India's ONGC has also fallen off the fund's top 10 holdings.

What does this show? Sometimes even the so-called best brains in the industry, end up making mistakes. These are expensive ones but again, all victims of circumstance. Little wonder then that people in India prefer to invest by themselves rather than rely on mutual funds.