The finance minister gave a reason to cheer to mutual fund investors last week. After the announcement of the Budget, the stock markets rose sharply.
The BSE closed the week at an all-time high of 6,849 points (the first time ever it has crossed the 6,800-point barrier), up by 279 points (4.25%) over the previous week. The S&P CNX Nifty closed at 2,148 points for the week, up by 87 points week-on-week (4.22%).
This year's Budget has been kind to mutual fund investors. The biggest plus came in the form of a boost for equity-linked saving schemes (ELSS), as they were included in the consolidated investment limit of Rs 100,000 for the purpose of deduction from taxable income.
And two, the finance minister has introduced gold-linked mutual fund schemes. Such schemes can act as a hedge against inflation.
Leading Diversified Equity Funds
| Diversified Equity funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| TAURUS STARSHARE | 20.77 | 14.00% | 22.61% | 71.94% | 53.66% | 6.20% | 8.69% | 0.59% |
| MAGNUM EMERGING BUS. | 14.82 | 9.13% | 15.24% | NA | NA | 45.01% | 7.11% | 0.99% |
| BOINANZA EXCL | 19.55 | 7.83% | 11.27% | 23.58% | 40.52% | 12.57% | 9.49% | 0.40% |
| MAGNUM MULTIPLIER 93 | 23.25 | 7.59% | 9.21% | 49.81% | 41.20% | 9.29% | 8.21% | 0.63% |
| MAGNUM GLOBAL | 18.25 | 7.35% | 13.92% | 91.49% | 54.52% | 12.36% | 7.22% | 0.81% |
(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.)
The week gone by was a very good one for schemes from the diversified equity funds segment. Most schemes posted healthy returns with Taurus Starshare (14.00%) leading the pack. Magnum Emerging Business (9.13%) and Bonanza Exclusive (7.83%) took the second and third spot, respectively.
While HDFC Top 200 (5.34%) fared reasonably well, HSBC Equity (3.22%) and Franklin India Bluechip (2.90%) posted average returns.
Sukumar Rajah, Director & CIO (Equity), Franklin Templeton Mutual Fund, opines that "Investors who are looking to take equity exposure should make any investment decision after a thorough analysis of their investment needs, risk profile and time horizon, and not base such decisions on market conditions. Once the plan is put in place, they should stick to it and not get perturbed by temporary market movements."
He also feels that "successful investing depends as much on the quality of the investment as on the discipline one exhibits."
Leading Debt Funds
| Debt funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| TATA DYNAMIC BOND | 10.22 | 0.20% | 0.62% | 1.26% | 2.94% | 3.91% | 0.82% | -0.23% |
| TATA INC PLUS | 11.23 | 0.14% | 0.71% | 0.79% | 0.80% | 5.19% | 0.79% | -0.15% |
| ESCORTS INCOME | 20.76 | 0.12% | 0.62% | 2.42% | 4.67% | 11.31% | 0.47% | 0.15% |
| KOTAK FLEXI DEBT | 10.16 | 0.11% | 0.51% | NA | NA | 1.27% | 0.03% | -1.77% |
| CANINCOME | 11.56 | 0.09% | 0.39% | 2.40% | 3.20% | 6.00% | 0.71% | -0.10% |
The 10-year GOI yield closed the week at 6.61%, up by 12 basis points over last week. Debt funds posted modest returns. Tata Dynamic Bond (0.20%) led the pack this week with Tata Income Plus (0.14%) and Escorts Income (0.12%) following the leader.
Leading Balanced Funds
| Balanced funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| ING BALANCED | 12.03 | 3.71% | 6.27% | 19.35% | 20.83% | 5.00% | 5.24% | 0.43% |
| TATA BALANCED | 30.34 | 3.57% | 7.63% | 31.68% | 33.70% | 17.15% | 5.11% | 0.66% |
| HDFC PRUDENCE | 61.52 | 3.56% | 7.32% | 33.89% | 40.54% | 21.56% | 4.65% | 0.75% |
| MAGNUM BALANCED | 19.01 | 3.54% | 5.55% | NA | NA | 11.10% | NA | NA |
| PRINCIPAL BALANCED | 14.64 | 3.24% | 6.32% | 20.69% | 27.82% | 6.40% | 5.26% | 0.56% |
Balanced funds too managed to post good returns for the week. ING Balanced (3.71%) took the position of numero uno with Tata Balanced (3.57%) and HDFC Prudence (3.56%) following closely behind.
Here comes another IPO! This time, it's from the SBI Magnum stable. It goes by the name of Magnum Midcap fund (MMF).
Though as a fund house, SBI Mutual Fund, has witnessed an indifferent performance since inception, the last 18-24 months have seen a spectacular turnaround.
Post the Budget announcement, investors with risk appetite should take a look at investing a part of their corpus in tax-saving funds.
Apart from offering tax benefits, they also have the potential to enhance the returns generated for investors who till date, could only invest Rs 10,000 in the same.
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