It was an average week for mutual fund investors. The stock markets closed without showing much signs of volatility.
The BSE Sensex closed at 6,570 points, down by 0.21% week-on-week (14 points). The S&P CNX Nifty closed at 2,061 points, up by 5 points (0.24%) over the previous week.
But investors also had a reason to cheer. M V Damodaran, Chairman of SEBI, announced this week that the deadline for individuals to conform to the new regulations requiring them to quote a MAPIN number for all securities transactions over Rs 100,000 had been extended till December 31st, 2005.
However, additional measures could have been looked at and implemented to further reduce the woes of the lay investor.
Leading Diversified Equity Funds
| Diversified Equity funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| BOB GROWTH | 16.51 | 3.38% | 9.92% | 38.51% | NA | 42.61% | 8.74% | 0.31% |
| MAGNUM EMERGING BUSINESS | 13.58 | 2.88% | 16.37% | NA | NA | 32.88% | 7.74% | 0.75% |
| GIC GROWTH II | 23.2 | 2.52% | 18.19% | 44.37% | 30.33% | 8.87% | 7.12% | 0.44% |
| MAGNUM CONTRA | 15.68 | 2.42% | 13.38% | 82.35% | 55.32% | 26.96% | 8.98% | 0.60% |
| TAURUS STARSHARE | 18.22 | 2.36% | 13.73% | 61.67% | 47.16% | 4.95% | 8.64% | 0.51% |
(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 a modest week for diversified equity funds. The weekly top performers managed to stay in positive terrain but didn't quite scorch the turf. BOB Growth (3.38%) led the pack this week followed by Magnum Emerging Business (2.88%) and GIC Growth II (2.52%).
Category leaders HSBC Equity (-0.62%) and Franklin India Bluechip (-0.36%) languished in negative terrain. HDFC Top 200 (1.23%) managed to chart into positive territory but just about.
It's tax-planning season. Most investors have their minds filled with thoughts on NSCs, PPF and insurance. It would do them no harm to also start thinking about investing in equity linked savings schemes (ELSS).
Apart from getting benefits under Section 88 like its traditional counterparts, it also helps boost returns sizably over the longer run.
Leading Debt Funds
| Debt funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| UTI BOND FUND | 19.05 | 0.17% | 1.14% | 2.80% | 2.46% | 9.98% | 0.84% | -0.15% |
| MAGNUM INCOME | 18.27 | 0.15% | 0.98% | 1.48% | 0.14% | 10.00% | 0.97% | -0.19% |
| SAHARA INCOME | 11.73 | 0.14% | 0.64% | 1.87% | 1.24% | 5.55% | 0.90% | -0.10% |
| ESCORTS INCOME PLAN | 20.73 | 0.14% | 0.63% | 2.32% | 4.63% | 11.33% | 0.46% | 0.18% |
| PRU ICICI FLEXI. INC. | 12.13 | 0.14% | 0.73% | 2.25% | 2.51% | 8.19% | 1.05% | 0.07% |
The 10-year GOI yield closed the week at 6.49%, marginally up by 1 basis point over last week. Inflation, after going southwards for 10 weeks running, took a breather, to remain steady at last week's levels. Debt fund posted modest returns. UTI Bond Fund (0.17%) emerged on top this week followed by Magnum Income (0.15%) and Sahara Income (0.14%).
Leading Balanced Funds
| Balanced funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| TATA BAL. A | 29.3 | 1.27% | 9.58% | 30.35% | 31.55% | 16.74% | 6.22% | 0.49% |
| ING BAL CUM | 11.6 | 0.61% | 7.31% | 19.83% | 19.43% | 4.23% | 5.78% | 0.36% |
| PRINCIPAL BAL | 14.18 | 0.57% | 7.59% | 20.48% | 25.87% | 5.77% | 5.80% | 0.46% |
| DSP ML BAL | 22.43 | 0.36% | 5.50% | 25.66% | 9.44% | 15.22% | 5.27% | 0.54% |
| HDFC PRUDENCE | 59.4 | 0.28% | 8.46% | 33.22% | 22.21% | 21.22% | 5.52% | 0.60% |
Balanced funds too did not fare that well this week. Tata Balanced (1.27%) topped the segment followed by ING Balanced (0.61%) and Principal Balanced (0.57%).
Its raining IPOs these days! Almost all fund houses have come out with a host of schemes to cash in on the IPO trend. The most recent to join the fray is HDFC Mutual Fund.
Its latest offering, the HDFC Premier multi cap fund, is not much different than its flexi cap peers from other fund houses. The fund house has tried though, to differentiate themselves by way of defining the portfolio allocations differently to large caps and flexi caps.
A word of caution for investors wanting to invest in IPOs: know and understand your investment avenues thoroughly before you actually invest in them.
We, at Personalfn, have observed that quite a few investors who have invested in IPOs recently have done so without having a clear understanding of how their monies are being invested. It is imperative that an individual knows the difference between a mid cap fund, a large cap fund and a multi cap fund.
With the budget drawing nearer by the hour, its time to make some predictions! What does this year's budget hold for the lay investor? Will it affect the mutual fund sector? What will happen to the small savings segment?
Is this year's budget going to encourage savings and investments or is it going to act as a dampener? All we can say is -- only time will tell!
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