Fisdom Research recently shared a fascinating report on the experience levels of fund managers, and the findings are quite surprising. According to the data, there are 912 fund managers with just 1-2 years of experience, around 200 fund managers with 3 years of experience, and approximately 500 with 8-9 years of experience. What is truly shocking is that only 24 fund managers have over 15 years of experience. While the exact source of this data remains unclear, if we assume it to be accurate, it raises serious concerns about the depth of market experience within the fund management industry.
The Lack of Market Cycle Experience
Fifteen years of experience means that these fund managers have only entered the markets after 2009-2010. This means that the majority of fund managers today have never witnessed the kind of severe bear markets seen in past decades. The COVID crash of 2020 was sharp but short-lived, and apart from that, there have been very few major corrections since 2008. These fund managers have never seen a prolonged, grinding bear market or massive wealth destruction, like the dot-com bust of 2000, where stocks fell from ₹3,000 to ₹10. Without this experience, they may not fully understand how to navigate extreme downturns, leading to potential mismanagement of portfolios during future recessions.
The Current Market Situation and Fund Manager Challenges
As of 2025, with market conditions turning challenging, it is becoming evident that many fund managers are struggling to cope. Surprisingly, fund managers seem to be in a more difficult position than investors. Investors have the choice to step aside, cut losses, or reallocate funds, but fund managers must continue managing money regardless of market conditions. Many of them lack the experience to deal with long, drawn-out bear markets, making it even harder to make the right decisions under pressure.
Why Experience Matters in Fund Management
Having an experienced fund manager is a key factor in ensuring portfolio stability. A fund manager who has witnessed multiple market cycles understands that bear markets can last for years and that extreme volatility is part of investing. They know that recoveries take time and that emotional decision-making can often lead to poor results. Market crashes in the past have tested the patience of even the most seasoned investors, and those who have gone through these periods develop the temperament to handle such situations wisely.
The Importance of Evaluating Your Fund Manager’s Track Record
For investors, this data serves as a wake-up call. Whether investing in mutual funds, PMS, AIFs, or smallcases, one must closely evaluate the experience of the fund manager. While knowledge and research are essential, they cannot replace real-world experience. A fund manager who has not even completed three years in the market may not have had the chance to prove their ability to handle a crisis. With over 2,500 fund managers lacking experience beyond the last three years, it is crucial to be cautious before trusting them with significant investments.
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