The equity markets are showing no signs of relenting. Taking off from where they left last week, this week too saw them touch new highs consistently. The Mumbai rains did little to dampen their spirits.
The BSE Sensex ended the week at 7,754 points, up by 118 points (1.55%). The S&P CNX Nifty posted a gain of 2.11% to close at 2,361 points. The CNX Midcap surged by 4.22% to close at 3,552 points, up 144 points.
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | SD | SR |
| DISCOVERY STOCK | 14.24 | 8.37% | 14.56% | 134.98% | 52.44% | 9.41% | 0.45% |
| TAURUS STARSHARE | 23.76 | 7.41% | 18.09% | 104.65% | 58.47% | 8.90% | 0.45% |
| ABN AMRO OPP | 12.06 | 7.21% | 13.93% | - | - | 3.72% | 1.50% |
| MAGNUM MULTI. PLUS | 26.75 | 6.57% | 16.15% | 94.49% | 59.44% | 4.69% | 1.83% |
| GIC FORTUNE 94 | 22.67 | 6.38% | 10.00% | 66.81% | 49.68% | 6.72% | 0.45% |
(The Sharpe Ratio is a measure of the returns offered by the fund vis-à-vis those offered by a risk-free instrument) (Standard deviation highlights the element of risk associated with the fund.)
Schemes from the diversified equity funds stable did well this week. Discovery stock (8.37%) emerged the leader by quite some distance. Taurus Starshare (7.41%) and ABN Amro (7.21%) came in at second and third positions, respectively.
Midcap majors Magnum Global (5.64%), Franklin Prima (5.60%) and Sundaram Select Midcap (3.47%) had a good week too.
The performance of category leaders HSBC Equity (4.11%), HDFC Top 200 (3.08%) and Franklin Bluechip (2.59%) was rather modest.
Leading Debt Funds
| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| DEUTSCHE DYN. BOND | 10.41 | 0.68% | 0.86% | 1.79% | 5.25% | 0.94% | -0.41% |
| DEUTSCHE PREM. BOND | 11.59 | 0.32% | 0.73% | 4.32% | 5.55% | 0.97% | -0.17% |
| PRUICICI FLEXI. INC. PLAN | 12.45 | 0.32% | 0.67% | 3.05% | 5.12% | 0.71% | -0.33% |
| ING VYSYA SEL. DEBT | 10.53 | 0.14% | 0.55% | 3.21% | - | 0.20% | -0.41% |
| KOTAK FLEXI DEBT | 10.42 | 0.11% | 0.50% | 3.00% | - | 0.02% | -2.38% |
Debt funds had an ordinary week. The 10-Yr benchmark 7.38% 2015 GOI yield closed at 7.00% (August 5, 2005), 7 basis points above the previous weekly close. Bond yields and prices share an inverse relation with rising yields translating into falling bond prices and vice versa.
Deutsche Dynamic Bond (0.68) emerged the leader by quite some distance. Holding joint second place were Deutsche Premier Bond and Pru-ICICI Flexible Income Bond with an NAV appreciation of 0.32% for the week.
Leading Balanced Funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | SD | SR |
| BOB BALANCED | 18.18 | 5.64% | 8.34% | 55.78% | - | 4.72% | 0.44% |
| HDFC BALANCE | 22.75 | 3.64% | 7.98% | 37.97% | 31.05% | 4.45% | 0.44% |
| ING BAL CUM | 13.71 | 3.08% | 8.98% | 47.74% | 31.64% | 4.89% | 0.43% |
| LIC BALANCE | 31.32 | 3.07% | 7.59% | 34.36% | 25.41% | 4.27% | 0.31% |
| TATA BALANCED | 32.96 | 2.93% | 5.63% | 48.82% | 39.88% | 4.80% | 0.52% |
Balanced funds benefited from the uptick in the equity markets. BOB Balance (5.64%) took the number one spot for the week. Following behind were HDFC Balance (3.64%) and ING Balance Cumulative (3.08%). Category leader HDFC Prudence (2.19%) had an average week.
The markets have been looking robust for quite some time now. The million-dollar question in every investor's mind right now is: what should I do now? We present a few pointers that will aid investors manage their investments in the present investment scenario.
This is the right time to get out of schemes, which have not lived up to your expectations. Even aggressively managed funds like sector funds, which have probably delivered the goods (remember sector funds appreciate in short bursts), are candidates for redemption.
Redeem your mutual fund schemes if you have met the growth you had targeted at the time of investing. Too many people have lost money trying to beat the markets and succumbing to greed. Our advise to investors is to make the best use of the 'redemption' opportunity markets have presented.
In case you are looking at increasing your mutual fund holdings, invest with a 3-5 year horizon. While some volatility is only to be expected in the interim period, it does not change the fact that equity markets still look good from a long-term point of view.
This is a good time to invest in tax saving funds (ELSS). Tax-saving funds have delivered impressive returns over a 3-5 year horizon. Coupled with the tax benefits, they offer a good investment opportunity on the post-tax returns parameter.
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