While the Average Assets Under Management (AAUM) of mutual funds in India are constantly registering a slump, there is a thought provoking phenomenon when the investments in equity based mutual funds, over one year, are looking lucrative. This is despite the fact that the equity markets are still at a lower level from the previous year during the same time.
Highest return, as on January 2, 2012, is generated by the SBI Magnum Sector Funds in the equity segment at 15.9% (absolute return over one year). There are about 45 schemes in the same segment that have posted positive returns for one year. Moreover, over 200 equity funds have given positive returns over three years with the lowest being 8.13%.
Similarly, all 21 funds in the segment of Balanced Funds have given positive returns in over three years, with the highest being 30.87% by ‘HDFC Balanced Fund – Growth.’
While these statistics prove the point that the mutual funds over long period are likely to give positive returns, there is one more reason to believe in the fund managers’ expertise. The returns over a year from equity funds are positive but at the same time the benchmark index of Bombay Stock Exchange (BSE) are negative over a year.
When the BSE Sensex was hovering around 18,000 points around the same time last year, it was up by about 500 points from the current levels. Statistically, the equity and balanced mutual funds clearly beat the index this time.
Whether the investors will be lured with this performance of the funds is yet to seen, but the fund houses have certainly something to boast about while attracting new investors, retaining existing investors and drawing back the walked-away investors.
FUND UPDATE
Birla Sun Life renames Birla Sun Life Income Fund
Birla Sun Life MF has decided to rename Birla Sun Life Income Fund to Birla Sun Life Short Term Fund, effective from 1st February 2012. Birla Sun Life Income Fund is an open ended income scheme which has the investment objective to generate income and capital appreciation by investing 100% of the corpus in a diversified portfolio of debt and money market securities.
Franklin Templeton announces dividend under Franklin India Taxshield
Franklin Templeton MF has declared dividend under Franklin India Taxshield, an open ended equity linked savings scheme. The quantum of dividend will be Rs. 3 per unit on the face value of Rs. 10 per unit. The investment objective of the scheme is to provide medium to long-term growth of capital along with income tax rebate. The record date for dividend distribution has been fixed as 3rd February 2012.
Principal revises exit load under its two schemes
Principal MF has announced to revise exit load structure under Principal Retail Equity Savings Fund and Principal Debt Savings Fund - Retail Plan. As per revised structure of an exit load of 1% will be charged if units are redeemed on or before 1 year from the date of allotment. Revised, exit load shall be applicable in respect of subscriptions in the scheme(s) post 3 p.m. effective 30th January 2012.
IDBI launches IDBI Dynamic Bond Fund
IDBI MF has launched a new fund namely, IDBI Dynamic Bond Fund, an open ended debt scheme. The face value of the scheme is Rs. 10 per unit. The new issue will open for subscription from 31st January 2012 to close on 14th February 2012. The investment objective of the scheme is to generate income while maintaining liquidity and asset quality through active management of a portfolio comprising of debt and money market instruments. Exit load charge will be 1% for exit within 1 year from the date of allotment. The performance of the scheme will be benchmarked against CRISIL Composite Bond Fund Index and will be managed by Gautam Kaul.
Mirae Asset announces change in benchmark index for its scheme
Mirae Asset MF has announced to change the benchmark index of Mirae Asset Cash Management Fund, an open ended liquid scheme. The benchmark index of the scheme will be changed from CCIL MIBOR to CRISIL Liquid Fund Index, effective from 1st February 2012. The investment objective of the scheme is to generate returns linked to short end rates like MIBOR and CBLO etc. and provides higher liquidity by investing in a portfolio of debt and money market instruments.