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Why Do You Need A Cube Advisor?

A financial advisor is someone who will advise you on when, where, and how much to invest. By the end of this blog, you'll understand why you need a Cube advisor.
November 29, 2022

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Is Mutual Fund Advisory Necessary?

Mutual fund advice is essential because it enables advisors to provide investors the best potential investment options for creating wealth by considering all the factors and resources available.

Cube’s Advisor: Wealth First

Cube’s Mutual Fund Advisory partner is Wealth First. All Mutual Funds are handpicked by Wealth First, who have 20+ years of experience and manage over ₹6000 crores for HNI’s and family offices. Wealth First also carries a historical track record of beating the market by approximately 50%. 

Advisor Profile:

  • Wealth First, promoted in 2000, is an independent Investment  Advisory Firm focused on “Treasury and Wealth Solutions”.
  • Advise/ Manage Assets in excess of Rs.5,000 Crores across Corporates,  Family offices, Provident Funds, Trusts & HNIs.
  • Team of 20 client-focused investment professionals with relevant  experience of 30+ years.
  • Core Team unchanged since inception.
  • 6 Professionals with 30+ years each in Debt Markets (including Treasury &  Cash Management).
  • Firm strength of over 70.
  • Past achievements including winning the prestigious CNBC – TV 18 award for India’s Best Investment Advisor in the IFA segment.

Common Mistakes Investors Make

Most investors would only look at the fund's returns over the previous three to five years and overall performance to assume and predict that it will perform well, and then they would invest in those funds.

1. Post facto analysis

We are only allowed to make decisions based on the previous performance of the funds and not on the elements that originally produced the results. This is referred to as post-facto analysis.

It is now too late if you are investing or making financial decisions based on performance. The majority of ratings that are publicly available are also based on the fund's past returns.

2. Consistency

We might end up investing in a fund that has performed well in a given year but not consistently across the tenure - this will have an impact on its future performance.

3. Overallocation

In most cases, we fail to manage overdiversification and overallocation, which results in a portfolio with over 12-15 funds, resulting in over diversification and overlap between funds of the same type with almost similar stocks, resulting in overallocation.

What Sets Wealth First Apart?

Everyone will advise you when to invest, but no one will tell you when to withdraw your investments. All advisors today simply look at a fund's annual growth, analyze it, and forecast the growth. However, at Cube, our advisory partner, Wealth First looks at quarterly returns as well as consistency, which makes it easier to analyze and predict future growth. 

Take the example of two funds, A and B, for which we are analyzing 3-year returns.

Fund A has grown at an average of 5% every quarter and has a return of 20% in 3 years.

Fund B grew by 60% in one year and by nothing in the next two.

Three-year returns for both funds will be the same, but we would prefer Fund A as it has been more stable and consistent in delivering returns.

Looking solely at returns while choosing mutual funds can make an investor make these mistakes.

Example: Cube Gives Users An Exit Recommended In 2021 Based On Consistency Of Returns                                               

Exit recommendation given by Wealth First

In 2020, Our Advisors, Wealth First recommended withdrawing the investment (marked in red) and investing in a new mutual fund that was expected to perform well and be better than the one that had been deprecated. The yellow line is what Cube’s advisors predicted the performance of the mutual fund to be.

As we can see in the graph, the mutual fund has performed just as predicted, if not better. whereas the deprecated fund has fallen behind that of the recommended new fund. The difference between the new fund recommended and the deprecated fund is 11.8%, which is quite noticeable.

As we have learned, accurate predictions can be made with expertise and the suitable analysis techniques. Wealth First commits to this strictly and recommends mutual funds accordingly. Mutual fund advice is becoming increasingly important in the hectic work lives of today's professionals. As individuals, we do not have so much time to research and analyze.

Priya Bansal
Curious about personal finance and all things money. Can either find me reading a book or dancing to a tune.

Top 5 Reasons To Try Our Powerful Investment App!

Schedule a call based on your convenience. And get an expert to help you invest.

  • High Quality Mutual Funds
  • Top Notch Stock Advisory
  • Invest in U.S. Stocks
  • Alternative Investments
  • Low Minimum Investments
Try Cube’s Exclusive Wealth Concierge Service! We offer a 10-minute portfolio analysis and set up service to select users.

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