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Top mutual funds in July '05
Value Research
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August 16, 2005
What are the chances of my losing money?

Every investor must ask this question when making an investment.

ImageThe higher the risk you take with your money, the greater the chance of higher returns. The lower the risk, the lower the return.

Hence, do not get misled by high returns. You could also end up losing all your money.

That is why equity (shares) rates high on the risk factor compared to other investments, like post office saving schemes, fixed deposits and bonds. The returns can be phenomenal. So are the chances of you losing your money.

How risky is your mutual fund? Check out the ratings given by mutual fund research outfit Value Research.

How the funds are rated

Here is a quick and easy way to identify mutual funds that have produced strong risk-adjusted performances vis-a-vis their peers.

The funds with a 5-star rating are the best. Those with a 1-star rating are the worst.

Note: Best does not indicate the highest return when compared with the rest. It means you will get a good return without putting your money at too much risk.

How the rating is done

A fund's return for each month is taken since the day it is launched.

This return is compared to other 'riskless' investments, like government investments, which have no risk per se. This means funds do not rate very high if they give phenomenal returns, but have taken tremendous risks to do so.

Only funds with a minimum performance history of three years are considered.

The top 5-star diversified equity funds

Diversified equity funds are those that invest in the shares of various companies of various sectors.

Here are the funds that offer the best returns when the risk factor is taken into account.

 

1-year return (%)

Return since launch (%)

Alliance Basic Industries

48.60

28.66

Franklin India Prima

80.65

25.08

HDFC [Get Quote] Equity

64.49

21.80

Magnum Contra

100.82

30.41

Reliance [Get Quote] Growth

97.81

31.81

Reliance Vision

63.79

26.39

The top 5-star tax planning funds

 These are diversified equity funds that have the tax benefit under Section 80C.

 

1-year return (%)

Return since launch (%)

Birla Taxplan '98

73.24

40.68

HDFC Long Term Advantage

72.43

46.82

HDFC Taxsaver

106.21

43.35

AMCs that have the most 5-star funds

Do remember that mutual fund houses (Asset Management Companies) offer more than one fund. Take a look at the AMCs that have the most number of 5-star funds.   

AMC

1-star

2-star

3-star

4-star

5-star

HDFC

2

9

10

5

6

Franklin Templeton

4

3

9

9

4

Kotak Mahindra

-

3

4

2

4

Reliance

-

3

1

3

4

Prudential ICICI [Get Quote]

1

3

7

6

3

J M Mutual Fund

1

4

1

3

2

Prudential ICICI

1

2

8

5

2

UTI Mutual Fund

-

10

12

7

3

Alliance Capital

1

-

9

1

1

BoB

2

-

2

1

1

Canbank

1

2

2

2

1

DSP ML

-

-

5

3

1

Escorts

-

2

3

-

1

J M

1

4

1

5

1

LIC [Get Quote]

3

4

3

-

1

Sahara

1

2

1

-

1

SBI [Get Quote]

4

5

7

2

1

 Remember, it is not always about the return. The risk you are putting your money into plays an important role.

Illustration: Dominic Xavier 

Value Research

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