In a matter of weeks, equity markets have come within reach of the 6,900-7,000 band, the level from which they had slumped only a few months ago.
In just four weeks, the BSE Sensex has gained 9.00%, an impressive performance by any standard. Over last week, the BSE Sensex appreciated by 3.20% to close at 6,708 points, while the S&P CNX Nifty posted a gain of 4.20% to end at 2,076 points.
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| ALLIANCE EQUITY | 90.53 | 3.55% | 8.37% | 23.74% | 66.11% | 7.44% | 0.62% |
| DEUTSCHE INV. OPP | 12.31 | 3.45% | 5.30% | 9.91% | 37.85% | 6.66% | 0.13% |
| DEUTSCHE ALPHA EQUITY | 26.00 | 3.42% | 5.43% | 11.68% | 35.84% | 7.70% | 0.49% |
| HDFC TOP 200 | 54.75 | 3.40% | 7.12% | 17.27% | 44.61% | 7.52% | 0.50% |
| CHOLA GROWTH | 17.13 | 3.19% | 6.33% | 14.35% | 43.35% | 6.75% | 0.54% |
(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.)
Funds from the diversified equity funds segment drew from the strong surge in the equity markets. Alliance Equity (3.55%) emerged as the top performer followed by Deutsche Investment Opportunity (3.45%).
Category leader HDFC Top 200 (3.40%) also featured in the top performers' list. Among the other category leaders -- Franklin India Bluechip (2.67%) had a good week, while it was a modest one for HSBC Equity (1.75%).
The mutual fund IPO frenzy continues unabated. While some fund houses are introducing regular, plain vanilla offerings others are getting more innovative. This week Personalfn's mutual fund research team has covered two IPOs one from each category.
While the Tata Midcap Fund IPO is on predictable lines, the Principal Junior Cap Fund has something new on offer. As mutual fund IPOs continue doing the rounds, it is important for investors to keep their bearings and not fall for funds only because they are 'new.'
Leading Debt Funds
| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| UTI BOND FUND | 19.64 | 0.37% | 1.70% | 5.87% | 3.99% | 0.76% | -0.23% |
| PRUICICI LONGTERM | 13.95 | 0.33% | 1.70% | 8.05% | 12.03% | 0.80% | 0.18% |
| TATA DYNAMIC BOND | 10.81 | 0.26% | 0.68% | 3.15% | 3.17% | 0.60% | -0.28% |
| TATA INC PLUS | 11.36 | 0.24% | 0.57% | 2.52% | 0.99% | 0.64% | -0.39% |
| DSP ML BOND | 23.23 | 0.23% | 0.92% | 4.18% | 1.57% | 0.80% | -0.31% |
Much like their equity counterparts, debt markets have been on something of a 'roll' over the past four weeks. From a high of 7.25%, the 10-Yr bond yield has slumped to 6.96% in less than a month.
Given the inverse relationship between bond prices and yields, this means that bond prices and therefore long-term debt fund NAVs have appreciated over the last month.
UTI Bond Fund (0.37%) surfaced as the top performing fund from the debt funds segment. PruICICI Long Term (0.33%) and Tata Dynamic Bond (0.26%) occupied the second and third positions, respectively.
Leading Balanced Funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| BOB BALANCED | 16.62 | 2.40% | 5.73% | 21.31% | 48.13% | 5.85% | 0.37% |
| MAGNUM BALANCED | 19.84 | 2.27% | 6.55% | - | - | 3.22% | 1.02% |
| LIC BALANCE | 27.99 | 1.83% | 3.93% | 7.29% | 21.17% | 4.62% | 0.30% |
| HDFC BALANCE | 20.54 | 1.82% | 3.76% | 6.88% | 28.72% | 4.88% | 0.43% |
| DSP ML BALANCED | 22.62 | 1.71% | 3.43% | 9.28% | 26.30% | 4.83% | 0.49% |
Balanced fund performances perked up on the strength of the rally in equity markets. Falling bond yields also helped their cause. BOB Balanced (2.40%) emerged as the weekly topper from the balanced funds segment, followed by Magnum Balanced (2.27%). Category leader HDFC Prudence (0.91%) had an ordinary week.
Our advice to investors as markets inch upwards is that investments in equities should be made cautiously and with a defined, 3-5 year time frame. Markets at these levels continue to be attractive, but only if you are a long-term investor.
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