Equity-oriented balanced funds have naturally fared well in a year when equities have boomed. some debt heavy balanced funds have also fared well in the past one year, with LICMF Children’s Fund earning higher than many equity oriented funds in the past one year.
There’s a lot happening in the banking and infrastructure sectors. Both sectors benefited from the investment boom in the country.The performance of these banking and infrastructure funds beats that of equity diversified funds, which is the purpose of investing in sectoral funds.
A 100% return in the past three years makes Escorts Growth top the charts this fortnight. Many equity-diversified funds earned over 80% returns in a single year. Equity tax plans have fared very well. Investors opt for them to get the benefits of tax deductions as well as indirect equity investing.
Arbitrage funds ( seventh table) take advantage of the price differential between the cash and derivative markets. Most have earned just under 10% in the past year.Though not as risk-free as bank FDs, these funds are more tax efficient. Index funds(eighth table) mirror the index they are based on, riding on the virtues of passive investing.
The Takeaways
You earn the most if the investment is monthly, even if it is a small contribution
The reason for the rise in yields is the change in compounding frequencies and interest reinvestment, which provides an exponential jump
