BackMint50:Do you have the right MF schemes?
Use Mint50 to see which mutual fund schemes in your portfolio can stay,go and come in
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The broom may be the new political mascot that promises to clean up a lot of things in our country, but it’s not a bad idea to use it once in a while in your investment portfolio either. The start of the year is a good time to let your broom into the investment portfolio and take stock; get rid of investments that haven’t worked out and replenish with some new ones.
Take the case of Mint50— Mint’s chosen set of 50 mutual fund (MF) schemes—that we recommend our readers should look at before investing. The start of the year is a good time to take stock of how the basket has performed. Although the basket is there to give you a choice of schemes, we suggest a bunch of just six to eight MF schemes to make up your MF portfolio.
How did the Mint50 portfolio do? We prefer to check the 5-year performance—the minimum time period that we feel you should stay invested in a scheme, especially an equity fund. Ignore passive funds such as index and exchange-traded funds (these schemes aim to mimic their benchmark indices’ performance). Of the 42 schemes that remain, 35 outperformed their category averages. Of the 29 schemes that we ascertained benchmark indices to, 28 schemes outperformed them.
To be fair, 2013 was a particularly difficult one for fund managers. Although the CNX Nifty index went up by 6.76% in 2013, not every index did. The flimsy gain apart, just five scrips contributed to more than 102% of Nifty’s gains. Rest of the stocks either gained neglibly, remained almost on par or fell, pulling the Nifty down. Over the past 3-year period, just one stock, ITC Ltd, contributed 69% to Nifty’s gains. Different sectors met with different fates. While the S&P BSE IT index, S&P BSE Healthcare index and S&P BSE FMCG index returned 60%, 23% and 11%, respectively, S&P BSE Bankex and S&P BSE Metal index lost about 10% each.
With so few stocks outperforming—and some of them doing so by huge margins—fund managers found it tricky to navigate the markets. Just 51% of diversified equity MF schemes outperformed their own benchmark indices in 2013, down from 56% in 2012 and 73% in 2011.
For the Mint50 best funds list, go to https://goo.gl/3v5Lw
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