After last week's strong performance, this week proved to be a bit of a dampener for equity markets. Markets hovered around the 6,000 points mark for a better part of the week, before falling sharply on the last day.
The BSE Sensex closed the week marginally down 0.03% at 5,962 points, while the S&P CNX Nifty fell by 0.05% to end the week at 1,872 points.
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| ALLIANCE EQUITY | 69.90 | 3.62% | 11.15% | 53.19% | 45.89% | 35.97% | 8.58% | 0.50% |
| UTI INDIA ADVANTAGE EQUITY | 4.78 | 3.46% | 8.64% | 37.75% | 23.62% | -19.92% | 8.17% | 0.23% |
| FRANKLIN INDIA PRIMA FUND | 95.30 | 3.19% | 9.45% | 58.44% | 70.40% | 22.81% | 9.45% | 0.55% |
| BIRLA ADVANTAGE | 56.29 | 3.13% | 9.03% | 32.60% | 35.85% | 25.69% | 7.75% | 0.46% |
| BIRLA MIDCAP | 27.67 | 3.05% | 9.76% | 55.01% | NA | 62.44% | 7.95% | 0.50% |
(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 investing predominantly in midcap stocks featured as top performers in the diversified equity funds segment. Alliance Equity (3.62%) was the weekly top performer, while Franklin India Prima (3.19%) and Birla Midcap (3.05%) also featured in the list.
It was a modest week for the category leaders Franklin India Bluechip (1.71%), HSBC Equity (1.23%) and HDFC Top 200 (0.46%).
Technology funds have come into the limelight powered by a strong performance over the past 12 months. Sector funds defy the basic rationale on which mutual fund investing is based i.e. diversification, which explains why we at Personalfn have never been greatly enthused by this category.
Having said that, sector funds do hold appeal for a section of investors i.e. the ones who have an in depth understanding of the sector and can time the entry and exit of their investments.
Lay investors on the other hand, can take heart from the fact that diversified equity funds also provide them with the same growth opportunities. If the technology sector looks like one with a high-growth potential, you can be sure your diversified equity fund manager will be buying a lot of technology stocks.
On a positive note, funds from other sectors will provide the necessary cushion, should the technology sector lose steam.
Leading Debt Funds
| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| ALLIANCE INCOME | 22.42 | 0.55% | -0.68% | -3.04% | -0.91% | 11.03% | 1.03% | -0.20% |
| KOTAK BOND DEP | 16.56 | 0.53% | -0.20% | -1.68% | 0.49% | 10.51% | 1.10% | -0.13% |
| DEUTSCHE DYNAMIC BOND | 9.92 | 0.49% | -0.12% | -1.76% | -0.28% | -0.61% | 0.97% | -0.61% |
| SAHARA INCOME | 11.45 | 0.40% | -0.66% | -2.51% | -0.61% | 5.16% | 1.16% | -0.21% |
| UTI - BOND ADVANTAGE | 16.78 | 0.39% | -0.47% | -3.02% | -1.04% | 10.11% | 1.31% | -0.15% |
It was a good week at the debt markets as yields fell. The benchmark 7.37% 2014 GOI yield closed at 7.11% (November 19, 2004), 13 basis points below the previous weekly close.
Yields and bond prices share an inverse relationship with falling yields translating into higher bond prices and net asset value (NAV) for investors. Conventional debt funds came to the fore, Alliance Income (0.55%) emerged as the weekly topper.
Fixed deposits are an investment avenue investors should consider in the present environment. With banks hiking deposit rates and equity markets rising incessantly fixed deposits have emerged as attractive propositions not only from the short-term investment perspective but also to park funds until better opportunities are thrown up by the equity markets.
Leading Balanced Funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| BOB BALANCED | 13.24 | 2.56% | 4.75% | 27.68% | NA | 27.48% | 7.06% | 0.25% |
| ALLIANCE 1995 | 92.57 | 1.96% | 7.25% | 30.49% | 31.15% | 26.64% | 5.91% | 0.44% |
| MAGNUM BALANCED | 15.89 | 1.86% | 8.10% | 40.88% | 29.27% | 15.59% | 6.30% | 0.48% |
| HDFC BALANCE | 18.73 | 1.62% | 5.02% | 25.88% | 26.09% | 16.42% | 5.35% | 0.39% |
| TATA BALANCED | 25.43 | 1.57% | 5.20% | 28.06% | 30.85% | 15.43% | 6.17% | 0.44% |
It was a modest week for the balanced funds segment, with the top performers delivering a return between the 1.57% and 2.56% range. BOB Balanced (2.56%) surfaced as the top performer, followed by Alliance 1995 (1.96%). Category leader HDFC Prudence (1.33%) had an ordinary week.
It has been quite a journey for investors over the last 3 months when the markets have surged by nearly a 1,000 points. Investors must make the most of this opportunity and book a part of their profits.
Also investors should consider restructuring their portfolios and disposing of investments that are not in tune with their risk-appetite.
