The Economic Times
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| 11 August, 2020, 09:31 PM IST | E-Paper

    Fund Recos

    Many investors are disappointed with their mutual fund returns in the last two to three years. They simply can’t understand why they are earning meagre returns when the key stock market indices have regained substantially. Some of them are looking for schemes that have given double-digit returns in the past year.

    As per Sebi categorisation, medium duration schemes must invest in debt and money market instruments with a Macaulay duration of the portfolio between three and four years.

    Here is the monthly update on our recommended banking & PSU funds in August. A word about the performance of LIC MF Banking & PSU Debt Fund: the scheme has been in the third quartile for the last two months.

    Value investors are always trying to buy stocks that they believe are undervalued in the market. They hope that the market may realise or discover the true value of these stocks one day.

    Best dynamic bond funds to invest in 2020

    Dynamic bond funds are meant for debt mutual fund investors who do not want to take calls on the interest rate movements in near term. Interest rate changes have a significant impact on debt funds, especially long-term and gilt schemes.

    Gilt mutual funds have been enjoying their spot under the sun due to a series of rate cuts by RBI. The category has been offering double-digit average returns until last month.

    In the past five-year and ten-year periods, the scheme has given 6.5% and 9.6% returns, respectively, while its peers have given average returns of 1.6 % and 6.3%, respectively, over the same periods.

    In times when estimates and assumptions are being questioned or proven wrong consistently due to unforeseen factors, it makes sense to stick with equity schemes that have been through long market cycles. Schemes which have been in existence for more than 15 years is a good criterion.

    ICICI Prudential Balanced Advantage has given returns of 7.2%, 11.5% and 11.4% in the past five-year, seven-year and 10-year periods, while its peers have given an average return of 5.8%, 10.2% and 8.9% respectively over the same periods.

    Motilal Oswal Midcap 30 Fund: Fund review

    The five-year-old fund has beaten its benchmark S&P BSE 150 Midcap TRI over 1-, 3- and 5-year periods. Although it is the topper in one-year return, it lags peers in 3- and 5-year return.

    The NFO of Sundaram Balanced Advantage Fund would remain open for subscription till February 28. The scheme reopens for ongoing subscription and redemption from March 12.

    After the recent trouble of shrinking arbitrage funds, it is not wise to invest in these schemes with a very short investment horizon. It is always ideal to invest in them with a year, but you can also invest in them if you have a horizon of at least six months.

    As per Sebi norms, corporate bond funds have the mandate to invest at least 80% of their corpus in the highest-rated corporate bonds. That means these schemes would invest most of their corpus in corporate bonds that are rated AAA.

    Investors can consider multi-asset schemes, which have exposure to equity, debt and commodities. This provides stronger diversification than just plain balanced plans.

    Best short duration or short term mutual funds to invest in 2020

    Top 14 short duration schemes have managed to offer more than 10% returns in the last one year.

    In the past five-year and 10-year periods, the scheme has given 10.5% and 17.5%, respectively. Its peers in the same periods have given average return of 7.8% and 10.5%, respectively.

    Did large-caps beat mid- and small-caps? Which mutual fund houses boasted of superior performance? Though benchmark indices shot up in 2019, the broader market didn’t do too well. ET Wealth analyses the returns of diversified equity mutual funds across time periods.

    If you are a conservative equity investor looking to grow your investment without too much volatility over a long period, you should consider investing in aggressive hybrid schemes.

    Kotak Standard Multicap Fund: Fund Review

    Among multi-cap schemes, Kotak Standard Mulitcap is a stable performer in longer duration cycles of markets. The scheme’s fund manager Harsha Upadhyaya has been careful in the construction of the portfolio.

    The Economic Times