Stock markets continued their northward journey this week. And mutual fund investors were not complaining!
Although marginal, the BSE Sensex went up by 15 points week-on-week (0.24%) to close at 6,634. The S&P CNX Nifty too rose by 0.19% (4 points) to close at 2,082.
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| DISCOVERY STOCK | 10.12 | 4.22% | 16.86% | 52.64% | 39.10% | 0.32% | 9.54% | 0.44% |
| CANEQUITY DIVERSIFIED | 17.82 | 4.21% | 17.01% | 31.42% | - | 50.63% | 9.68% | 0.35% |
| GIC GROWTH II | 22.69 | 3.99% | 14.94% | 36.52% | 30.41% | 8.68% | 6.71% | 0.46% |
| ESCORTS GROWTH | 30.46 | 3.91% | 19.43% | 32.87% | 39.33% | 33.41% | 8.13% | 0.42% |
| UTI THEMATIC MID CAP | 13.63 | 3.89% | 16.00% | - | - | 47.12% | 5.76% | 0.57% |
(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.)
It was an average week for mutual funds from the diversified equity funds segment. Taurus Discovery Stock (4.22%) maintained its leadership position from last week to finish as the leader for this week. It was closely followed by Canequity Diversified (4.21%) and GIC Growth II (3.99%).
Category leaders HSBC Equity (3.05%), HDFC Top 200 (1.55%) and Franklin India Bluechip (1.04%) from the private sector had an average week as well.
According to Rushabh Sheth, Chief Investment Officer (Equity), Kotak Mahindra Asset Management Company Ltd, the Indian economy is on a growth trajectory. Says Sheth, "If the economic growth continues, underlying businesses will do well. This will reflect in equity markets over the next 2-3 years as it looks like India will continue to grow at 6.5-7.0%." But Sheth believes that for any diversified mutual fund investments, the time frame for investments by investors should be at least 18-24 months.
"For a mid cap fund, it should be longer 2-3 years as mid caps are more volatile and you need to give them more time".
Leading Debt Funds
| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| GRINDLAYS DYN. BOND | 12.12 | 0.88% | 1.06% | 0.58% | 1.45% | 7.58% | 1.12% | -0.01% |
| UTI - BOND ADV. | 17.21 | 0.76% | 0.75% | 3.24% | 1.09% | 10.17% | 1.15% | -0.05% |
| DEUTSCHE DYN. BOND | 10.25 | 0.67% | 0.84% | 4.63% | 3.32% | 2.03% | 1.10% | -0.34% |
| UTI BOND FUND | 19.00 | 0.58% | 0.77% | 3.79% | 2.31% | 9.99% | 0.91% | -0.14% |
| DSP ML BOND | 22.89 | 0.56% | 0.74% | 3.84% | 1.55% | 11.16% | 1.13% | -0.09% |
The 10- Yr GOI yield closed at 6.43% (February 11, 2005), down by 29 basis points over previous week's close. Inflation too fell to an 8-month low of 5.25%.
This was pleasant news for investors in debt funds as returns went up. Grindlays Dynamic Bond (0.88%) led the pack this week followed by UTI Bond Advantage (0.76%) and Deutsche Dynamic Bond (0.67%).
Leading Monthly Income Plans
| Monthly Income Plans | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| RELIANCE MIP | 10.64 | 1.02% | 2.30% | 6.03% | 6.66% | 5.72% | 0.87% | -0.10% |
| HDFC MIP LTP | 11.25 | 0.84% | 2.65% | 9.33% | 8.79% | 9.24% | 1.82% | 0.05% |
| PRU ICICI INC. MULTIPLIER | 10.81 | 0.72% | 2.91% | 9.82% | - | 8.29% | 2.28% | 0.08% |
| FT INDIA MIP | 17.21 | 0.65% | 2.52% | 8.59% | 8.71% | 13.32% | 1.39% | 0.43% |
| TATA MONTHLY INC. PLUS | 10.49 | 0.55% | 1.79% | 5.94% | - | 5.00% | 1.45% | -0.07% |
Monthly income plans (MIPs) also posted positive returns this week. Reliance MIP (1.02%) emerged the leader for this week followed by HDFC MIP LTP (0.84%) and Pru ICICI Income Multiplier (0.72%).
It has recently been proposed by SEBI that all investors whose transactions exceed Rs 100,000 in the primary or secondary markets should hold a unique identification number under MAPIN.
This has only befuddled the investor who wants to invest in equities, mutual funds and collective investments as he must now deal with almost 6 photo identity cards each serving a different purpose.
This new proposal also raises a few posers for SEBI. In light of the stock market scams in the not so recent past, should the lower limit of Rs 100,000 be hiked?
Rs 100,000 per se is not as big an investment amount for the SEBI to track compared to those 'unscrupulous market participants'/investors who have made the system dance to their tunes time and again. Concerns over investing becoming more urban-centric and protection of privacy of investors are also an issue.
We believe the market regulator needs to simplify procedural hassles to woo more individuals into investing in the markets.
But with one ID card after another being introduced into the system, much to the chagrin of the retail investor, the regulator seems to have contradicted its own logic of simplifying procedures.
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