New Delhi: Stocks have proved to be a bigger money spinner for investors who depended on experts’ wisdom rather than their own as over 150 mutual fund schemes doled out better returns than the two market benchmarks.
The stock market’s two barometer indices — BSE’s Sensex and NSE’s Nifty — surged by 47.1% and 54.8% respectively during 2007. However, as many as 152 MF schemes recorded better returns than both of them during the year.
Besides, a total of 13 schemes nearly doubled the investors’ wealth with 90-112% returns for 2007.
Experts believe an above-average performance by a large majority of equity funds validates the point that investing through mutual funds is a better way for investors to cash upon the boom in the market, rather than getting exposed to huge risks involved with investing directly in stocks.
Out of 209 diversified, tax-planning and index equity funds for whom 2007 data is available, just 57 gave a return lower than that of Sensex, according to data compiled by mutual fund tracking firm Value Research.
Tauras Libra Taxshield and JM Basic funds have emerged as the top performers with returns of about 111% each.
Besides, Standard Chartered Premier Equity, Tauras Discovery, Sundaram BNP Paribas Capex Opportunities, JM Emerging Leaders, ICICI Prudential Infrastructure, DWS Investment Opportunity, Canara Robeco Infrastructure, Kotak Opportunities and Reliance Regular Savings Equity also gave close to 100% returns, the Value Research data shows.
Out of 209 funds under review, 139 provided returns of more than 50% during 2007.
With the bull run in the stock markets almost all the equity schemes have performed considerably well and none of them gave a negative return. Among sector funds, Reliance Diversified Power sector equity scheme came on the top with a return of 120%.
Experts believe even funds without such huge returns have proved to be a consistent wealth-multiplier for investors, without exposing them much to the stock market risks.
“Retail investors should look out for schemes which provide consistent returns rather than astronomical growth figures for some months or a year,” Value Research CEO Dhirendra Kumar said.
In its monthly report on mutual funds for the month of December, Value Research has assigned ‘five-star´ ratings to 15 schemes, although not all of them are among the top-return providers for the year 2007.
These schemes include, ING Domestic Opportunities, Kotak Opportunities, Magnum Contra, Magnum Global, Reliance Growth, Reliance NRI Equity, Sundaram BNP Paribas Select Midcap, UTI Infrastructure, Tata Index Nifty A, UTI Master Index, HDFC Taxsaver, Magnum Taxgain, HDFC Prudence, Magnum Balanced and Prinicipal Child Benefit.
These ratings, given as 1-5 stars, are a composite measure of both returns and risk and are purely quantitative in nature. It is a unified performance measure and summarises how a fund has performed historically relative to the other funds in its category, Kumar said.