Finally there was good news in store for investors as the markets closed in positive terrain after three indifferent weeks.
The BSE Sensex posted a gain of 2.46% to end at 4,871 points while the S&P CNX Nifty rose by 3.36% to close at 1,538 points. The markets which have been rather tentative in the recent past now seem to be looking forward to next week's budget for direction.
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| DISCOVERY STOCK | 5.39 | 7.16% | -6.10% | 21.40% | 10.27% | -6.10% | NA | NA |
| BOINANZA EXCL G | 11.14 | 6.81% | -6.23% | 10.89% | 27.67% | 6.43% | 8.43% | 0.12% |
| IL&FS DYNAMIC G | 13.24 | 6.52% | -0.53% | NA | NA | 36.21% | 9.38% | 0.27% |
| TAURUS STARSHARE | 10.24 | 6.11% | -5.88% | 34.74% | 25.83% | -0.44% | 7.95% | 0.18% |
| TEMPLETON GROWTH D | 21.37 | 6.05% | 2.25% | 63.18% | 33.75% | 15.04% | 7.81% | 0.33% |
(NAV data as on July 02, 2004. Growth over 1-Yr is compounded annualised)
(Standard deviation indicates by how much the values have deviated from the mean of the values.
It measures by how much the investor has diverged from the mean return either upwards or downwards.
It highlights the element of risk associated with the fund.)
With the equity markets showing a gain, diversified equity funds delivered positive returns. The week's top performers threw up a rather motley picture with Discovery Stock (7.16%) emerging as the weekly topper followed by Boinanza Exclusive (6.81%).
The list also featured a dynamic fund i.e. IL&FS Dynamic (6.52%); dynamic funds have the flexibility to move between equity and markets depending on market conditions. Category leaders HDFC Top 200 (4.69%) and Franklin India Bluechip (4.10%) had a reasonably good week as well.
A mutual fund scheme's portfolio speaks volumes about the fund manager's investment style.
Schemes which display a certain degree of consistency i.e. the ones which have a core portfolio should always be considered for investment as opposed to those having a portfolio that changes dramatically every few months, which would imply that the fund has no defined character and is more a trading vehicle rather than an investment avenue.
The next time you are considering making a mutual fund investment, check it's historical portfolio over a period of time.
Leading Income Funds
| Income Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| DEUTSCHE BOND IP G | 11.10 | 0.33% | -0.79% | 0.15% | 6.15% | 1.65% | NA | NA |
| DEUTSCHE PREMIER BOND G | 10.97 | 0.32% | -0.86% | -0.28% | 5.30% | 1.27% | 1.1749 | 0.1649 |
| DEUTSCHE DYNAMIC BOND G | 9.90 | 0.30% | -1.23% | -1.20% | NA | -0.83% | 1.2347 | -0.5042 |
| SUNDARAM SELECT DEBT DYN. | 12.00 | 0.29% | -0.52% | -0.28% | 5.00% | 10.50% | NA | NA |
| GRINDLAYS SUPER SAVER IP G | 15.59 | 0.29% | -1.15% | -0.48% | 4.27% | 7.12% | 0.864 | -0.0918 |
(NAV data as on July 02, 2004, Growth over 1-Yr is compounded annualised)
(The Sharpe Ratio is a measure of the returns offered by the fund vis-à-vis those offered by a risk-free instrument)
The much-anticipated and already "factored" uptake in rates by the US Federal Reserve took place this week. The benchmark 7.37% 2014 GOI yield closed at 5.80% (July 2, 2004), 8 basis points below the previous weekly close.
Falling yields lead to higher bond prices which in turn lead to higher net asset values (NAV) for income fund investors. Debt markets also took relief from lower than expected inflation figures; rising inflation rates have been a cause for concern in the recent past.
Income funds from the Deutsche AMC dominated the proceedings and occupied the top three positions. Deutsche Bond (0.33%) surfaced as the weekly topper followed by Deutsche Premier Bond (0.32%).
Leading Balanced Funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| HDFC PRUDENCE G | 43.59 | 3.56% | 0.28% | 37.23% | 36.05% | 19.10% | 4.99% | 0.46% |
| KOTAK BALANCE | 12.78 | 3.52% | 0.85% | 30.43% | 20.83% | 10.58% | 5.62% | 0.25% |
| BIRLA BALANCE G | 14.22 | 3.42% | 0.99% | 32.03% | 21.03% | 9.32% | 5.79% | 0.26% |
| HDFC BALANCE G | 15.65 | 3.39% | 0.86% | 30.78% | 19.15% | 12.74% | 5.27% | 0.24% |
| PRU ICICI BAL G | 14.80 | 3.28% | 0.00% | 33.69% | 20.45% | 9.40% | 5.65% | 0.24% |
(NAV data as on July 2, 2004. Growth over 1-Yr is compounded annualised)
Balanced funds had an average week as well, thanks to the positive performances in the equity and debt markets. Category leader HDFC Prudence (3.56%) topped the list followed by Kotak Balance (3.52%).
Investors and markets alike seem to be awaiting next week's budget for further clarity. Factors like revision of small savings rates, tax exemptions on capital gains from mutual funds, the taxability of mutual funds' dividends and enhancement of the limit on equity linked savings schemes will all be monitored very closely.
An investor friendly budget would mean further incentives and opportunities for investors to get invested. Having said that, your risk profile and investment objective stay unchanged despite what the budget has to offer, what could change is the instruments you choose to achieve your goals.
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