Volatility in April continued from where it signed off in March. The specter of rising interest rates and climbing oil prices dealt a double whammy to the stock markets.
Not-so-encouraging quarterly results did not make it any better. The BSE Sensex posted a loss of 6.82 per cent to close the month at 6,154 points, while the S&P CNX Nifty slumped by 8.71 per cent to close at 1, 902 points.
Leading Diversified Equity Funds
| SCHEME NAME | NAV (Rs) | 1-Mth | 3-Mth | 1-Yr | SD | SR |
| KOTAK OPPORTUNITIES | 13.69 | 10.92% | 9.20% | - | 6.59% | 0.59% |
| MAGNUM EMERG. BUSSINESS | 15.17 | 7.06% | 25.06% | - | 6.92% | 0.83% |
| FRANKLIN PRIMA FUND | 118.08 | 6.33% | 10.27% | 51.17% | 7.85% | 0.68% |
| RELIANCE GROWTH | 123.02 | 5.58% | 10.87% | 53.35% | 7.38% | 0.76% |
| SAHARA MIDCAP | 10.29 | 5.47% | 2.27% | - | 5.53% | 0.06% |
(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.)
Mid cap stocks continued to rule with large caps playing second fiddle. As a result, mid cap funds once again topped the monthly rankings.
As a matter of fact, mid cap funds have been dominating the proceedings for sometime now. Personalfn did an analysis to determine the best and worst performers of 2005 so far. Our Year-to-Date query revealed what is probably common knowledge among investors for some time now -- mid cap funds have managed to hold their own in 2005 so far, which is more than what you can say for large cap funds.
At this stage a lot of investors are probably wondering whether they should be shifting their mutual fund investments to mid cap funds now that 'the writing is on the wall' for large caps. Apart from the fact that large caps are far from being written off, investors need to keep their bearings about them in these times and avoid common investment mistakes.
Maintaining a well-balanced mutual fund portfolio that is diversified across large cap and mid cap funds has a lot merit even as you see one segment outperforming the other by a wide margin. Investors also need to be particularly cautious while evaluating mutual fund IPOs and differentiate the chaff from the wheat.
Leading Debt Funds
| SCHEME NAME | NAV (Rs) | 1-Mth | 3-Mth | 1-Yr | SD | SR |
| UTI BOND FUND | 19.31 | 0.99% | 2.45% | 2.12% | 0.72% | -0.27% |
| TATA DYNAMIC BOND | 10.74 | 0.66% | 1.67% | 2.24% | 0.77% | -0.24% |
| TATA INCOME PLUS R1 | 11.30 | 0.61% | 1.32% | 0.03% | 0.74% | -0.29% |
| TATA INCOME FUND | 21.98 | 0.52% | 1.37% | 0.91% | 0.65% | -0.29% |
| BOB INCOME FUND | 11.82 | 0.51% | 1.10% | 3.07% | 0.51% | -0.26% |
It was a rough month for debt markets. While the rising oil price scenario was already factored in, the Reserve Bank of India's unexpected decision to hike the reverse repo rate by 25 basis points in the Monetary Policy, dealt a blow to debt markets.
UTI Bond Fund (0.99 per cent) and Tata Dynamic Bond (0.66 per cent) occupied the first and second positions respectively over the month. Debt funds are just about managing to remain in positive terrain despite the volatility in debt markets. This they are doing by maintaining relatively lower portfolio maturities.
Leading Balanced Funds
| SCHEME NAME | NAV (Rs) | 1-Mth | 1-Yr | 3-Yr | SD | SR |
| HDFC PRUDENCE | 60.74 | 4.01% | 27.16% | 39.14% | 4.98% | 0.63% |
| BOB BALANCED FUND | 15.51 | 3.95% | 28.82% | - | 5.82% | 0.32% |
| ALLIANCE 95 FUND | 101.66 | 2.71% | 17.08% | 28.06% | 5.41% | 0.52% |
| KOTAK BALANCE | 17.30 | 1.31% | 24.19% | 29.65% | 5.49% | 0.49% |
| TATA BALANCE | 29.20 | 1.24% | 26.09% | 32.40% | 5.26% | 0.59% |
Balanced Funds were redeemed with the presence of mid cap stocks in their portfolios and managed to stay in the black. HDFC Prudence Fund (4.01 per cent) was the leader with BoB Balanced (3.95 per cent) in second place.
With the passing of the Finance Bill, there is clarity on some investment-related issues. Chief among them from the mutual fund investor's standpoint is the extended Rs 100,000 limit on investments in tax-saving funds.
In our view, high-risk investors should consider adding to their ELSS investments. This is done best through the systematic investment plan route to iron out stock market volatility.
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