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Fund houses pile up new offers
July 12, 2005 13:05 IST
Nothing can seem to come in the stocks markets' way. It has ignored the $60 per barrel crude oil shock so far and last week it dismissed the London blasts with a 67-point surge the very next day.
In the meantime, fund houses continue to launch new offerings for investors. Over the week, the BSE Sensex appreciated by 0.02% to close at 7,212 points; however the S&P CNX Nifty fell by 0.71% to close at 2,196 points. The CNX Midcap 200 appreciated by 3.63%% to close at 3,145 points. Leading Diversified Equity Funds
(Source: Credence Analytics. NAV data as on July 8, 2005. Growth over 1-Yr is compounded annualised)
|Diversified Equity Funds||NAV (Rs)||1-Wk||1-Mth||6-Mth||1-Yr||SD||SR|
|DISCOVERY STOCK ||12.53 ||5.65%||14.53%||34.88%||142.83%||8.51%||0.49%|
|GIC FORTUNE 94 ||21.00 ||4.79%||2.09%||15.64%||60.31%||7.04%||0.45%|
|UTI THEMATIC MID CAP ||15.15 ||4.41%||4.05%||21.78%||73.42%||4.12%||0.73%|
|PRUICICI EMERGING S.T.A.R||14.14 ||3.74%||2.84%||21.79%||-||3.00%||1.20%|
|MAGNUM MULTIPLIER PLUS||23.12 ||3.68%||6.15%||24.57%||85.71%||NA||NA|
(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.)
This week proved to be a very profitable one for most funds from the diversified equity segment. It also saw the return of mid-caps as the star performers for the week. Discovery stock (5.65%) emerged on top. GIC Fortune (4.79%) and UTI Thematic Mid-cap (4.41%) took the second and third positions respectively.
HSBC Equity (1.80%) and Franklin India Bluechip (0.69%) had a disappointing week. This is due to the fact that they are pre-dominantly large cap funds. HDFC Top 200 (-0.15%) in particular, fared very poorly, languishing in negative terrain.
The slew of 'new fund offers' shows no signs of abating. Close on the heels of several mid cap/flexi cap offers, are two new launches. And both are different in their own ways.
Magnum Comma Fund is the latest to join the fray. Its investment objective, just like most others, aims to 'generate opportunities for growth along with possibility of consistent returns'.
But the scheme has a unique investment proposition in terms of its investment mandate 'to invest largely in stocks of companies involved in the commodity business from the stated sectors'.
Also recently launched is Standard Chartered's Classic equity fund (SCCEF). This is Standard Chartered Mutual Fund's maiden diversified equity fund offering. The fund is yet to prove its competence in managing equities; something that is untested even in the global context since SCCEF is the first equity fund that Standard Chartered has launched across countries.
Another offer that is expected to generate some level of interest among investors is the HDFC Multiple Yield Fund. Personalfn will have its view out for investors on that fund by next week. Leading Debt Funds
(Source: Credence Analytics. NAV data as on July 8,, 2005. Growth over 1-Yr is compounded annualised)
|Debt Funds||NAV (Rs)||1-Wk||1-Mth||6-Mth||1-Yr||SD||SR|
|KOTAK FLEXI DEBT ||10.38||0.11%||0.49%||2.98%||-||0.03%||-1.59%|
|BIRLA DYNAMIC BOND||10.41||0.11%||0.16%||2.93%||-||0.13%||-0.88%|
|CHOLA FREEDOM ||10.72||0.10%||0.44%||1.91%||3.87%||0.21%||-0.91%|
|ING VYSYA SEL. DEBT ||10.47||0.09%||0.46%||3.13%||-||0.21%||-0.49%|
|CHOLA TRIPLE ACE||22.95||0.08%||0.24%||1.30%||1.93%||0.95%||-0.32%|
The 10-Year GOI yield closed the week at 7.18%, up by 25 basis points over the previous week. Bond prices share an inverse relationship with bond yields. Leading debt funds just about managed to stay afloat. Kotak Flexi Debt (0.11%) and Birla Dynamic Bond (0.11%) emerged as joint leaders for the week with Chola Freedom (0.10%) coming a close third. Leading Balanced Funds
(Source: Credence Analytics. NAV data as on June 10, 2005. Growth over 1-Yr is compounded annualised)
|Balanced Funds||NAV (Rs)||1-Wk||1-Mth||1-Yr||3-Yr||SD||SR|
|PRUICICI BAL ||21.58 ||2.91%||4.50%||46.80%||30.46%||4.72%||0.47%|
|ALLIANCE 1995||112.46 ||2.23%||3.76%||46.97%||32.15%||5.32%||0.46%|
|FT INDIA BALANCED||20.45 ||1.79%||3.34%||32.53%||29.12%||3.93%||0.48%|
|KOTAK BALANCE ||18.50 ||1.77%||5.30%||57.20%||33.79%||4.48%||0.55%|
|CANBALANCE ||21.27 ||1.77%||2.46%||18.56%||12.35%||4.06%||0.24%|
Balanced funds performed reasonably well over the week. PruICICI Balanced (2.91%) took the number one spot. Alliance 1995 (2.23%) and FT India Balanced (1.79%) followed to take second and third positions respectively. Category leader HDFC Prudence (1.30%) also had a good week.
Theoretically speaking, investors in diversified equity funds should enjoy high diversification levels. However, at Personalfn, we have observed an interesting fact - in recent times quite a few fund managers have increased their allocations to the engineering sector. From an investor's perspective, a sectorally concentrated portfolio enhances the risk associated with the investment.
As new fund offers keep appearing on the investor's radar at regular frequency, its important to be cautious while evaluating them. Not every new offer needs to be in your portfolio. Its only those with a unique investment proposition that coincide with your risk profile that should find a place in your portfolio.
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