The good times for mutual fund investors continue. The stock markets took off from where they left last week. The BSE Sensex posted a healthy gain of 3.10% over last week to close at 6,618 points.
The S&P CNX Nifty too rose by 69 points over last week to close at 2077 points, a gain of 3.48%.
Leading Diversified Equity Funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| DISCOVERY STOCK | 9.71 | 8.61% | 5.66% | 52.19% | 38.60% | -0.09% | 8.52% | 0.46% |
| MAGNUM GLOBAL | 16.56 | 8.24% | 7.46% | 82.21% | 54.19% | 11.35% | 7.08% | 0.72% |
| MAGNUM EMERGING BUS. | 13.11 | 8.08% | 5.13% | - | - | 28.28% | 6.73% | 0.80% |
| TAURUS STARSHARE | 17.61 | 6.99% | 5.45% | 56.67% | 50.15% | 4.65% | 8.04% | 0.54% |
| ESCORTS GROWTH | 29.31 | 6.67% | 9.22% | 33.04% | 39.57% | 32.27% | 6.40% | 0.49% |
(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.)
Mutual funds from the diversified equity funds segment mirrored the healthy gains posted last week. Discovery Stock (8.61%) from Taurus Mutual Fund emerged as the top performer for the week followed Magnum Global (8.24%).
Category leaders HSBC Equity (4.25%), HDFC Top 200 (3.87%) and Franklin India Bluechip (3.57%) had a modest week.
Sector funds regularly manage to find a way in investor portfolios. While there is nothing wrong in investing in sector funds, it's imperative for the investor to have some degree of knowledge about the sector. This is so because investments in sector funds are always associated with higher volatility, as they are more concentrated in their investment approach vis-à-vis diversified equity funds.
Also sector fund performances peak in short bursts, but not without intense volatility. For investors who can't stomach the above-average risk associated with sector funds, there is an innovative mutual fund scheme -- Principal Focussed Advantage Fund in the IPO stage, that seeks to invest across 4-6 sectors.
Prudent investors should always study their fund manager's profile before deciding to take the plunge into a scheme managed by him.
While fund managers can deliver smart returns for their investors, investors still need to do their homework before choosing to go with a particular fund manager. Studying the fund manager's profile will help in understanding the inherent risk-return quotient associated with any scheme.
Leading Debt Funds
| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR |
| HDFC HIGH INTEREST | 22.93 | 0.24% | 0.40% | 2.09% | -0.04% | 11.09% | 0.99% | -0.10% |
| MAGNUM INCOME | 18.15 | 0.21% | 0.24% | 1.60% | -0.72% | 9.97% | 0.92% | -0.19% |
| SUNDARAM INC. PLUS | 11.76 | 0.21% | 0.43% | 1.66% | 3.00% | 6.57% | 0.41% | -0.28% |
| UTI BOND FUND | 18.89 | 0.21% | 0.13% | 2.87% | 1.43% | 9.93% | 0.77% | -0.19% |
| HDFC INCOME FUND | 15.68 | 0.19% | 0.25% | 2.13% | 0.68% | 10.50% | 0.98% | -0.08% |
The 10- Yr GOI yield closed at 6.72% (February 4, 2005), down by 2 basis points over previous week's close. Bond yields and prices share an inverse relation, with rising yields translating into lower bond prices.
Debt funds clocked positive returns for the third week in a row. HDFC High Interest (0.24%) emerged the leader for this week followed by Magnum Income (0.21%).
Leading Balanced Funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR |
| CANTRIPLE | 36.86 | 4.95% | 4.69% | 24.49% | 25.43% | 8.92% | 5.32% | 0.41% |
| KOTAK BALANCE | 17.31 | 4.63% | 4.06% | 41.66% | 32.03% | 16.61% | 4.89% | 0.55% |
| ESCORTS BAL | 26.90 | 4.57% | 5.75% | 21.29% | 34.26% | 29.52% | 5.70% | 0.46% |
| TATA BALANCED | 28.65 | 4.23% | 4.33% | 27.79% | 34.14% | 16.56% | 5.11% | 0.57% |
| MAGNUM BALANCED | 16.16 | 3.79% | 2.92% | 41.63% | 34.33% | 17.01% | 5.12% | 0.68% |
Balanced funds too did well this week posting smart returns. Cantriple (4.95%) emerged the leader in the balanced fund segment followed by Kotak Balance (4.63%) and Escorts Balanced (4.67%). Category leader HDFC Prudence (3.76%) had a reasonable week.
Right now with mutual fund IPOs being launched at the drop of a hat, investors need to get more circumspect while reviewing their investment options.
For one, a Rs 10 NAV is not an good enough reason to invest in a mutual fund IPO.
Second, if you have mutual fund schemes in your portfolio that help you achieve your investment objective effectively enough, you don't need to consider an IPO that will perform the same role in your portfolio.
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