Search:



The Web

Rediff









Home > Business > Business Headline > Personal Finance

Markets are precariously poised

November 22, 2004 10:39 IST

After last week's strong performance, this week proved to be a bit of a dampener for equity markets. Markets hovered around the 6,000 points mark for a better part of the week, before falling sharply on the last day.

The BSE Sensex closed the week marginally down 0.03% at 5,962 points, while the S&P CNX Nifty fell by 0.05% to end the week at 1,872 points.

Leading Diversified Equity Funds
Diversified Equity FundsNAV (Rs)1-Wk1-Mth1-Yr3-YrIncep.SDSR
ALLIANCE EQUITY 69.903.62%11.15%53.19%45.89%35.97%8.58%0.50%
UTI INDIA ADVANTAGE EQUITY 4.783.46%8.64%37.75%23.62%-19.92%8.17%0.23%
FRANKLIN INDIA PRIMA FUND95.303.19%9.45%58.44%70.40%22.81%9.45%0.55%
BIRLA ADVANTAGE56.293.13%9.03%32.60%35.85%25.69%7.75%0.46%
BIRLA MIDCAP 27.673.05%9.76%55.01%NA62.44%7.95%0.50%
(Source: Credence Analytics. NAV data as on Nov 19, 2004. Growth over 1-Yr is compounded annualised)
(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.)

Funds investing predominantly in midcap stocks featured as top performers in the diversified equity funds segment. Alliance Equity (3.62%) was the weekly top performer, while Franklin India Prima (3.19%) and Birla Midcap (3.05%) also featured in the list.

It was a modest week for the category leaders – Franklin India Bluechip (1.71%), HSBC Equity (1.23%) and HDFC Top 200 (0.46%).

Technology funds have come into the limelight powered by a strong performance over the past 12 months. Sector funds defy the basic rationale on which mutual fund investing is based i.e. diversification, which explains why we at Personalfn have never been greatly enthused by this category.

Having said that, sector funds do hold appeal for a section of investors i.e. the ones who have an in depth understanding of the sector and can time the entry and exit of their investments.

Lay investors on the other hand, can take heart from the fact that diversified equity funds also provide them with the same growth opportunities. If the technology sector looks like one with a high-growth potential, you can be sure your diversified equity fund manager will be buying a lot of technology stocks.

On a positive note, funds from other sectors will provide the necessary cushion, should the technology sector lose steam.

Leading Debt Funds
Debt FundsNAV (Rs)1-Wk1-Mth6-Mth1-YrIncep.SDSR
ALLIANCE INCOME 22.420.55%-0.68%-3.04%-0.91%11.03%1.03%-0.20%
KOTAK BOND DEP16.560.53%-0.20%-1.68%0.49%10.51%1.10%-0.13%
DEUTSCHE DYNAMIC BOND9.920.49%-0.12%-1.76%-0.28%-0.61%0.97%-0.61%
SAHARA INCOME11.450.40%-0.66%-2.51%-0.61%5.16%1.16%-0.21%
UTI - BOND ADVANTAGE16.780.39%-0.47%-3.02%-1.04%10.11%1.31%-0.15%
(Source: Credence Analytics. NAV data as on Nov 19, 2004. Growth over 1-Yr is compounded annualised)

It was a good week at the debt markets as yields fell. The benchmark 7.37% 2014 GOI yield closed at 7.11% (November 19, 2004), 13 basis points below the previous weekly close.

Yields and bond prices share an inverse relationship with falling yields translating into higher bond prices and net asset value (NAV) for investors. Conventional debt funds came to the fore, Alliance Income (0.55%) emerged as the weekly topper.

Fixed deposits are an investment avenue investors should consider in the present environment. With banks hiking deposit rates and equity markets rising incessantly fixed deposits have emerged as attractive propositions not only from the short-term investment perspective but also to park funds until better opportunities are thrown up by the equity markets.

Leading Balanced Funds
Balanced FundsNAV (Rs)1-Wk1-Mth1-Yr3-YrIncep.SDSR
BOB BALANCED 13.242.56%4.75%27.68%NA27.48%7.06%0.25%
ALLIANCE 1995 92.571.96%7.25%30.49%31.15%26.64%5.91%0.44%
MAGNUM BALANCED 15.891.86%8.10%40.88%29.27%15.59%6.30%0.48%
HDFC BALANCE 18.731.62%5.02%25.88%26.09%16.42%5.35%0.39%
TATA BALANCED 25.431.57%5.20%28.06%30.85%15.43%6.17%0.44%
(Source: Credence Analytics. NAV data as on Nov 19, 2004. Growth over 1-Yr is compounded annualised)

It was a modest week for the balanced funds segment, with the top performers delivering a return between the 1.57% and 2.56% range. BOB Balanced (2.56%) surfaced as the top performer, followed by Alliance 1995 (1.96%). Category leader HDFC Prudence (1.33%) had an ordinary week.

It has been quite a journey for investors over the last 3 months when the markets have surged by nearly a 1,000 points. Investors must make the most of this opportunity and book a part of their profits.

Also investors should consider restructuring their portfolios and disposing of investments that are not in tune with their risk-appetite.



Article Tools
Email this article
Top emailed links
Print this article
Write us a letter
Discuss this article



Related Stories


MFs: Markets set for correction?

Multiply your money with funds!

Principal Growth Fund: In focus



People Who Read This Also Read


Ambanis may keep RIL intact

Dabhol LNG terminal on contract

Govt mulls ceiling on FII inflow









More Personal Finance










Copyright © 2004 rediff.com India Limited. All Rights Reserved.