Mumbai: Investors putting money in blue- chip stocks belonging to benchmark indices Sensex and Nifty directly are earning five times more compared to those who take the mutual fund schemes route to invest in stocks from these two indices.
An analysis of three-year performance of 12 MF schemes investing in Sensex or Nifty stocks shows that their returns is just one-fifth of that given by the two benchmark indices in the same period.
The Bombay Stock Exchange’s 30-share index Sensex has appreciated by a whopping 213% in the past three years, while the National Stock Exchange’s 50-share Nifty has also soared by close to 200% in this period.
In comparison, among the 12 MF schemes which invest in stocks from one of these two indices, the best three-year return is 46.8 %, from Tata Index Nifty.
All the other such funds- Tata Index Sensex, UTI Master Index (Sensex), UTI Nifty Index, HDFC Index Nifty and HDFC Index Sensex-have given a return between 40- 46.7% in three years.
UTI, HDFC and Tata MFs, Franklin India, LIC and Reliance Mutual Fund also have schemes focused on Sensex and Nifty. The three-year return is not available for Reliance MF schemes as it was launched later.
In addition to the three-year horizon, these schemes have given lower returns than the indices for one-year and five-year periods as well.
“The index funds are not managed well. Investor money is not deployed efficiently and it takes a lot longer for the money to give returns,” MF tracking firm ValueResearch CEO Dhirendra Kumar told PTI.