Funds ride Sensex bull run
WITH THE stock market going strong, it is the domestic mutual funds which have hit a jackpot on their equity-oriented schemes in the past one year.
WITH THE stock market going strong, it is the domestic mutual funds which have hit a jackpot on their equity-oriented schemes in the past one year.
Reason: having burnt their fingers in the Ketan Parekh scam, retail investors this time have steered clear of directly entering the equity market and instead put faith in mutual funds.
India's top 10 equity funds have earned between 74 and 90 per cent since January 2005. During this period, the Sensex gained by 50 per cent, moving to 10,045 points from 6,679.
This means that if an investor had put Rs 10,000 in one of these top 10 funds, and remained with it till date, his value of investment appreciated to anything between Rs 17,500 and Rs 19,000 -- if not double.
On the other hand, the 10 best debt funds, perceived to be more secure, have given a return of something between 5.6 and 10.3 per cent in the same period. In a bank deposit, the investor would have earned around 6 per cent, which means Rs 10,000 would have become Rs 10,600 only.
Reflecting the market trend, debt funds or income funds have generated single digit return barring one -- Tata Income Funds, which earned 10.28 per cent.
Interestingly, Indian investors have always believed in making fast money. Even in mutual funds, they churn their portfolio around three times in a year.