Mutual fund investors had much reason to cheer as equity markets posted one of the strongest weekly gains in the recent past.
The BSE Sensex rose by 3.80 per cent to close the week at 6,388 points, while the S&P CNX Nifty ended the week at 1,978 points (up 3.94 per cent).
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | SD | SR |
| PRUICICI EMER. S.T.A.R | 12.81 | 5.17% | 3.81% | - | - | 4.89% | 0.68% |
| GIC FORTUNE 94 | 19.51 | 4.89% | 1.51% | 28.19% | 40.07% | 7.16% | 0.53% |
| HSBC INDIA OPP. | 12.99 | 4.75% | -2.03% | 22.19% | - | 5.50% | 0.26% |
| ESCORTS GROWTH | 28.24 | 4.75% | -0.14% | 27.14% | 35.30% | 6.83% | 0.48% |
| BIRLA INDIA OPP. | 27.89 | 4.73% | -0.14% | 25.69% | 27.11% | 6.65% | 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.)
A motley mix of funds made it to the top performers' list in the diversified equity funds segment. PruICICI Emerging S.T.A.R. (5.17 per cent), a mid cap offering emerged as the leader. Funds of the "opportunities" variety i.e. HSBC India Opportunities (4.75 per cent) and Birla India Opportunities (4.73 per cent) featured in the list as well.
The week proved to be a good one for category leaders, HSBC Equity (4.29 per cent), HDFC Top 200 (4.08 per cent) and Franklin India Bluechip (3.49 per cent).
It not unusual for investors to receive a lot of advice on how they should go about investing their monies. However, our experience with investors suggests that it is pertinent for investors to be aware of a few common investment mistakes; steering clear of such errors can go a long way in helping investors achieve their financial goals.
The recently announced Monetary Policy has unambiguously set the tone for a rising interest rate regime. Personalfn interviewed Mr. Rajiv Anand, Head-Investments, Standard Chartered Mutual Fund to get his views on the avenues investors should consider going forward. His advice was "Retail investors should continue to invest in accrual schemes like cash and floating rate funds. Long term floating rate funds are also a good option for a slightly longer horizon. Additionally, fixed maturity plans will continue to fetch relatively stable returns in an otherwise volatile market".
Leading Floating Rate Funds
| Floating Rate Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| MAGNUM INC. FLOATING | 10.38 | 0.21% | 0.53% | 2.48% | - | 0.07% | -2.21% |
| DSP ML FLOATING | 11.04 | 0.14% | 0.48% | 2.70% | 5.25% | 0.04% | -3.35% |
| BIRLA FLOATING | 11.02 | 0.13% | 0.49% | 2.63% | 5.16% | 0.05% | -2.37% |
| GRINDLAYS FLOATING | 10.39 | 0.12% | 0.45% | 2.58% | - | 0.03% | -4.85% |
| TEMPLETON FLOATING | 12.06 | 0.12% | 0.44% | 2.58% | 4.91% | 0.04% | -3.60% |
The 10-Yr 7.38 per cent 2015 GOI yield closed the week at 7.25 per cent (May 6, 2005), 3 basis points above the previous weekly close. Bond prices and yields share an inverse relation, with higher yields translating into lower bond prices and net asset value for investors. In view of the rising yields we decided to review the performance of floating rate funds for the last week.
Magnum Income Floating Rate (0.21 per cent) surfaced as the weekly topper in the floating rate funds segment. DSP ML Floating (0.14 per cent) and Birla Floating (0.13 per cent) occupied second and third positions respectively.
Leading Balanced Funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | SD | SR |
| BOB BALANCED | 16.12 | 3.93% | 1.00% | 32.67% | - | 4.87% | 0.40% |
| ESCORTS BALANCED | 26.57 | 3.21% | -0.36% | 20.08% | 29.53% | 5.82% | 0.45% |
| ING BALANCED | 11.69 | 2.90% | 0.26% | 14.38% | 20.99% | 5.09% | 0.44% |
| PRUICICI BALANCED | 19.78 | 2.75% | -1.30% | 18.94% | 27.25% | 4.73% | 0.51% |
| KOTAK BALANCE | 17.76 | 2.67% | 0.28% | 26.18% | 30.39% | 4.79% | 0.55% |
Balanced funds drew from the surge in equity markets; top performers ranged between 2.67 per cent to 3.93 per cent. BOB Balanced (3.93 per cent) topped the balanced funds' segment followed by Escorts Balanced (3.21 per cent). Category leader HDFC Prudence (2.16 per cent) had a rather subdued week.
We reiterate our view that investors who have been waiting on the sidelines should consider getting invested in equity-oriented funds. Investors of the risk-taking variety can contemplate investing in lump sum a part of their total investible corpus with each "correction"; for investors with a moderate risk-appetite, the systematic investment plan route remains the best bet.
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