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Markets bring cheer to investors

November 04, 2003 14:10 IST
Last Updated: November 04, 2003 15:22 IST

Reserve Bank of India's dollar purchases provided the much needed liquidity to the markets. The benchmark 10 year 7.27% GOI yield closed at 5.10% (October 31, 2003)one basis point above the previous weekly close.

Leading Income Funds
Income SchemesNAV (Rs)1-Wk1-Mth6-Mth1-Yr3-YrIncep.SDSR
UTI REGULAR INC. 11.130.3%1.0%6.5%10.4%NA10.8%NANA
SUNDARAM SELECT DEBT DYN A 11.920.2%0.4%7.0%16.0%NA16.5%NANA
ING CAPITAL PORTFOLIO G 11.230.2%0.8%3.0%6.6%NA5.9%0.17%0.76%
CANCIGO 13.090.2%0.8%11.2%18.5%14.5%12.2%0.62%0.85%
ESCORTS INC PLAN G 19.200.1%0.5%3.9%11.9%12.3%12.7%0.12%0.47%
((NAVs as on October 31, 2003. 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)

UTI Regular Income (0.3%) and Sundaram Select Debt (0.2%) emerged as the top performers. Floating funds made their presence felt for the second week in a row amidst negative returns. Volatile times like these highlight the need for having floating funds in one's portfolio. The ability of floating rate funds to offer positive returns when yields rise makes them a must-have proposition.

Investors need to be rational and reasonable in their expectations from debt markets. As asserted by Mr. Mustafa Mahmood (Fund Manager -Debt, HDFC Mutual Fund), "One cannot invest in a short-term fund and compare the returns of those funds with long term funds returns. The thumb rule is to gauge the product's suitability for an investor depending on his time horizon".

For the trading week ended October 31, equity markets made a welcome comeback. The BSE Sensex was up by 3.1% to close at 4,907 points while the S&P CNX Nifty rose by 3.3% and closed at 1,556 points. Previous week's pattern of a sharp recovery on the last trading day was repeated this week(Oct 27-Oct 31)as well.

Leading Diversified Equity Funds
Diversified Equity SchemesNAV (Rs)1-Wk1-Mth6-Mth1-Yr3-Yr5-YrIncep.SDSR
SUNDARAM SELECT FOCUS G 19.578.2%13.4%71.0%101.1%NANA71.3%5.74%0.69%
SUNDARAM GROWTH G 21.747.2%13.2%69.7%91.0%20.8%23.9%19.1%4.22%10.21%
SUNDARAM SELECT MIDCAP 19.956.8%10.2%83.9%106.6%NANA75.0%5.24%10.25%
RELIANCE VISION G 53.056.7%9.6%87.8%122.1%44.0%40.8%23.0%4.08%7.61%
RELIANCE GROWTH GR 59.276.5%9.4%89.1%118.4%35.3%36.3%24.7%4.17%7.27%
(NAVs as on October 31, 2003. Growth over 1-Yr is compounded annualised)
(Standard deviation indicates by how much the values have deviated from the mean of the values. It measures by how much the investor has diverged from the mean return either upwards or downwards. It highlights the element of risk associated with the fund.)

It was Sundaram all the way in the equity funds segment. Three schemes from the same asset management company made it to the weekly toppers list. Interestingly, funds with a large cap holding (Sundaram Select Focus) and a mid cap holding (Sundaram Select Midcap) have both offered handsome returns in the same week.

A bullish undercurrent seems to be palpable in equity markets. However, investors need to note that there has been a sharp run up and volatility can yet be a matter of concern in the immediate future. To tide over volatility and uncertainty, investors can consider the Systematic Investment Plan (SIP) route whereby they can enter the markets at various time intervals and diversify their risk.

Leading Balanced Funds
Balanced SchemesNAV (Rs)1-Wk1-Mth6-Mth1-Yr3-Yr5-YrIncep.SDSR
SUNDARAM BAL G 15.294.6%8.4%45.3%55.3%18.2%NA13.0%2.81%6.63%
HDFC PRUDENCE G 40.323.8%7.3%53.8%87.1%29.4%31.1%19.6%3.25%5.41%
FT BALANCED G 13.753.4%6.2%47.5%57.1%20.0%NA7.0%2.43%5.56%
ESCORTS BAL G 19.153.4%11.6%51.3%63.7%NANA28.9%2.85%9.02%
TATA BALANCED 19.253.3%6.5%50.8%64.5%13.7%22.1%13.6%2.75%4.73%
(NAVs as on October 31, 2003. Growth over 1-Yr is compounded annualised)

Balanced funds drew from the strong growth in equity markets. Leading funds clocked growths in the range of 3.3% to 4.6%, surpassing the growth in the equity markets.

Banking on this week's solid performance, the markets are euphoric all over again. However investors need to be cautious. The run up in the markets has been too fast and accompanied by volatile patches. It makes a lot of sense a keep your heads when everyone around you is losing theirs.

You can also see the best performers over a year!

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