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January 10, 2005 14:09 IST
Last Updated: January 10, 2005 16:59 IST
The new year commenced on a rather somber note for investors. After rising for three weeks in a row, the equity markets finally lost steam and fell sharply last week. The BSE Sensex posted a loss of 2.77 per cent to close at 6,420 points, while the S&P CNX Nifty ended the week at 2,016 points (down 3.12 per cent). Markets also experienced a fair degree of volatility during the week. Leading Diversified Equity Funds| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR | | GIC GROWTH | 20.71 | 3.14% | 12.01% | 16.74% | 28.72% | 7.85% | 4.73% | 0.50% | | BOB GROWTH | 15.31 | 1.66% | 6.62% | 11.10% | - | 39.63% | 6.01% | 0.38% | | GIC FORTUNE 94 | 18.15 | 1.34% | 6.45% | 11.76% | 52.58% | 6.83% | 7.27% | 0.50% | | SUNDARAM SEL. MIDCAP | 35.72 | 0.12% | 9.51% | 35.89% | - | 69.16% | 7.34% | 0.65% | | UTI - DYNAMIC EQUITY | 21.66 | -0.32% | 9.39% | 40.47% | - | 83.92% | 6.63% | 0.70% |
(Source: Credence Analytics. NAV data as on Jan 7, 2005. Growth over 1-Yr is compounded annualised)
(The Sharpe Ratio is a measure of the returns offered by the fund vis-�-vis those offered by a risk-free instrument) (Standard deviation highlights the element of risk associated with the fund.)It was a tough week for investors in the diversified equity funds segment as most funds languished in negative terrain; however a motley mix of funds like GIC Growth (3.14 per cent), BOB Growth (1.66 per cent) and GIC Fortune 94 (1.34 per cent) managed to deliver positive returns and featured among the week's top performers. Category leaders -- HSBC Equity (-2.26 per cent) HDFC [Get Quote] Top 200 (-2.74 per cent) and Franklin India Bluechip (-2.93 per cent) had a very poor week. A slew of mutual fund IPOs (initial public offerings) is hitting the markets at present, thanks to the rally in equity markets. Investors are often attracted to such IPO offerings for a variety of reasons ranging from the NAV (net asset value) price to the lure of investing in something new. However investors must at all times recognise the need to ensure that the MF IPO is in tune with their risk-profile and also ensure that IPO contributes to making their portfolio a more complete one. Leading Debt funds| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | Incep. | SD | SR | | UTI - BOND ADVANT. | 17.13 | 0.51% | 0.91% | 0.86% | -0.11% | 10.26% | 1.35% | -0.20% | | ALLIANCE INCOME | 22.93 | 0.41% | 1.00% | 0.55% | 0.52% | 11.15% | 1.14% | -0.19% | | JM INCOME | 26.63 | 0.37% | 0.88% | 1.67% | 0.72% | 10.54% | 1.26% | -0.17% | | ING INCOME | 16.79 | 0.37% | 0.97% | 0.92% | 0.32% | 9.56% | 1.29% | -0.23% | | KOTAK BOND DEP | 16.92 | 0.37% | 0.98% | 1.99% | 1.51% | 10.69% | 1.31% | -0.15% |
(Source: Credence Analytics. NAV data as on Jan 7, 2005. Growth over 1-Yr is compounded annualised)Investors in debt funds had little reason to complain as bond yields continued their southward journey. Bond yields and prices share an inverse relationship, with falling yields translating into higher bond prices and net asset value (NAV) for investors. The 10-Yr benchmark 7.38 per cent 2015 GOI yield closed at 6.54 per cent (January 7, 2005), 3 basis points down from 6.57 per cent as on December 31, 2004. UTI Bond Advantage (0.51 per cent) surfaced as the weekly top performer, followed by Alliance Income (0.41 per cent). Leading Balanced Funds| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 1-Yr | 3-Yr | Incep. | SD | SR | | KOTAK BALANCE | 16.55 | -0.43% | 6.67% | 22.66% | 30.21% | 15.85% | 4.22% | 0.57% | | BOB BALANCED | 14.05 | -0.64% | 2.70% | 8.75% | - | 30.10% | 4.74% | 0.34% | | HDFC PRUDENCE | 57.30 | -0.78% | 5.25% | 20.22% | 42.24% | 21.11% | 4.42% | 0.70% | | MAGNUM BALANCED | 17.73 | -0.89% | 6.30% | 29.76% | 32.38% | 16.76% | 4.61% | 0.70% | | HDFC BALANCE | 19.59 | -1.06% | 2.61% | 10.02% | 25.72% | 17.08% | 4.32% | 0.46% |
(Source: Credence Analytics. NAV data as on Jan 7, 2005. Growth over 1-Yr is compounded annualised)Falling equity markets took their toll on the balanced funds segment with all funds delivered negative returns. Kotak Balance (-0.43 per cent), category leader HDFC Prudence (-0.78 per cent) and Magnum Balanced (-0.89 per cent) featured among funds that suffered the least during the week. When markets are on a seemingly endless spiral (as they have been in recent times), investors are tempted to throw caution to winds and get invested to make a quick buck. A week like the last one often helps investors to gauge their risk-appetite, investment objective and horizon more objectively. If you are a serious long-term investor, who is aware of and can take on the inherent risks associated with investing in equities, there is a fair chance that you will treat the last week like an aberration and not be too perturbed by the same. On the other hand, if you were invested contrary to your risk profile, treat last week's market slump as a warning signal. Our advice to investors � stick to investments in tune with your risk profile. Your risk appetite remains the same, irrespective of how the markets are placed.
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