Size shouldn't matter while investing in mutual funds | Mutual fund investment guide

The other day, I saw a mutual fund performance report from a large broking house that was so wrong in its approach that it was almost funny. Or rather, it would have been funny were it not for the implications for the broking house's customers. This report, which was prepared by the broking house's mutual fund research team, showed the investment performance of a large number of equity funds. The bizarre part was that the report was sorted by fund size with the largest funds listed on top. This focus on fund size being an important parameter in investing showed up in other parts of this research report also.Why this focus on fund size? Frankly, there is no rational reason for it. Still, since some funds are larger and others are smaller, fund marketers for the larger ones try and use this as a positive point, and some investors - and apparently, analysts, get influenced by this. I suppose the logic is that if a fund has been given a lot of money to manage,then this proves that the fund must be goo