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Mutual Fund Roundup: July 2007
Notwithstanding, the 542-point dip on July 27, 2007, it
was a good month for investors as markets closed in positive terrain. The
BSE Sensex posted a gain of 6.14% to close at 15,551 points, while the S&P
CNX Nifty closed at 4,529 points (up by 4.89%). The CNX Midcap rose by
3.38%, before settling at 6,178 points.
In July 2007, Foreign Institutional Investors (FIIs)
were net buyers of equities with purchases of Rs 188,051 m (as on July 31,
2007). On the contrary, mutual funds were net sellers to the tune of Rs
8,935 m.
At Personalfn, we often receive queries from investors
pertaining to positioning of funds. Simply put, they would like to know
what investment proposition a given fund offers and how (if at all), it is
different from another offering from the same fund house. Given that often
a number of schemes offer similar investment propositions, this dilemma is
understandable. Recently, we received queries pertaining to Franklin India
Prima Plus (FIPP) and Franklin India Flexi Cap (FIFC).
While FIPP is a predominantly large cap fund, FIFC is a
flexi cap fund, that can invest in stocks from across market segments.
Hence the funds are about as similar as chalk and cheese.
Leading open-ended equity funds
| Equity Funds |
NAV (Rs) |
1-Mth |
6-Mth |
1-Yr |
SD |
SR |
| JM Basic |
26.85 |
8.78% |
30.98% |
88.96% |
9.19% |
0.38% |
| BOB Growth |
35.42 |
8.12% |
14.55% |
44.81% |
6.96% |
0.26% |
| CanInfrastructure
|
17.61 |
7.97% |
20.95% |
65.20% |
8.87% |
0.28% |
| JM HI FI |
12.10 |
7.52% |
6.57% |
44.16% |
10.58% |
0.12% |
| DWS Investment Opp. |
28.43 |
7.45% |
19.25% |
61.35% |
8.53% |
0.31% |
(Source: Credence Analytics. NAV data as on July 31, 2007.)
(Standard Deviation highlights the element of risk associated with
the fund. Sharpe Ratio is a measure of the returns offered by the
fund vis-à-vis those offered by a risk-free instrument)JM Basic
(8.78%) emerged as the best performer in the equity funds segment,
followed by BOB Growth (8.12%) and CanInfrastructure (7.97%). JM HI
FI (7.52%), another thematic offering also featured among the top
performers.
Leading open-ended long-term debt funds
| Debt Funds |
NAV (Rs) |
1-Mth |
6-Mth |
1-Yr |
SD |
SR |
| Birla Income
Plus |
32.36 |
4.67% |
6.50% |
10.00% |
1.04% |
- |
| ICICI Pru.
Income |
22.53 |
4.34% |
4.80% |
9.54% |
1.08% |
-0.01% |
| Templeton
Income |
27.07 |
3.82% |
5.55% |
8.68% |
0.90% |
-0.04% |
| Templeton
Inc. Builder |
25.81 |
3.30% |
3.41% |
7.25% |
0.91% |
-0.19% |
| Birla Sun
Life Income |
27.53 |
3.26% |
6.98% |
12.33% |
0.77% |
0.28% |
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(Source: Credence Analytics. NAV data as on July
31, 2007.) |
Birla Income Plus (4.67%) occupied top slot in the long-term debt
funds segment. ICICI Prudential Income (4.34%) and Templeton Income
(3.82%) came in at second and third positions respectively. Another
fund from Franklin Templeton Mutual Fund i.e. Templeton Income
Builder (3.30%) also featured in the top performers’ list.
Not too long ago, fixed maturity plans (FMPs) emerged as favoured
investment avenues with risk-averse investors. With their
proposition of offering “nearly” assured and attractive returns,
FMPs made apt choices in a risk-averse investor’s portfolio.
However, in the recent past, yields from FMPs have lowered, making
them relatively unattractive. This month, we put forth an investment
strategy that can help
investors ace falling FMP returns.
Leading open-ended balanced funds
| Balanced Funds |
NAV (Rs) |
1-Mth |
6-Mth |
1-Yr |
SD |
SR |
| JM Balanced
|
27.19 |
7.57% |
13.92% |
44.42% |
6.30% |
0.34% |
| Canbalance
|
31.52 |
5.17% |
9.75% |
32.16% |
5.51% |
0.17% |
| Birla
Balance |
31.42 |
4.92% |
11.14% |
35.23% |
4.91% |
0.26% |
| LIC MF
Balanced |
47.99 |
4.52% |
2.48% |
24.36% |
6.03% |
0.17% |
| UTI Balanced
|
61.12 |
3.80% |
7.91% |
29.71% |
5.33% |
0.21% |
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(Source: Credence Analytics. NAV data as on July 31, 2007.) |
JM Balanced (7.57%) led the pack in the balanced funds segment,
followed by Canbalance (5.17%) and Birla Balance (4.92%).
With a wide range of investment opportunities available,
investors are often left wondering where they should invest. In such
a scenario, at times investors take the easy way out and invest in
avenues recommended by their friends or family members; conversely,
the right course of action would be to seek advice from a financial
planner/investment advisor. This is just one of the many common
investment mistakes committed by investors.
Finally, with the markets acting at their volatile best, some
investors are having second thoughts about their investments. Here’s
our take on the situation – equity investments are meant for
investors who have a long-term (at least 3-Yr) investment horizon
and the ability to take on risk i.e. even tolerate an erosion of the
invested amount during the interim. If you don’t fit into the
aforementioned criteria, maybe its time to reconsider the aptness of
your investments. |
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