Decoding the mutual fund tables

Decoding the mutual fund tables

No matter what you want to know about mutual funds, this is the best place to start from - an analysis of 778 mutual funds across 10 most relevant parameters of evaluation.

Want to buy your first mutual fund? Or do you wish to compare how your fund has fared compared with other schemes? No matter which category you fall into, this is the best place you can start from — an analysis of 778 mutual funds across 10 most relevant parameters of evaluation. Don’t feel intimidated by the pages and pages of data that seem to confound you right now. These tables pack a lot of information into a small space and can seem complicated unless you know what you are looking for. Just a quick read through our guide will help you interpret them easily. Here’s what each parameter (column of the tables) means.

Fund Scheme
The asset management companies (AMCs) are listed in alphabetical order. The fund schemes under each AMC are also listed in the same manner. These have been classified under different categories. The three broad ones are equity, hybrid and debt. They have been further divided into sub-categories such as large-cap, tax planning, infrastructure, arbitrage, gilt, etc. In all there are 28 categories. The full names for each abbreviation in the category column have been given in the footnote. Closed-ended funds have been highlighted by using an asterisk (*) while exchange-traded funds (ETFs) have been marked with a hash (#).

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The two most important details that are desired from a fund are its age and the size of the fund corpus.

Launch Date: The date, month and year when the fund scheme was launched.

Assets: The total assets under management (AUM) of the fund scheme as on 30 April 2009. Remember, the size of the assets usually has no bearing on the returns from a fund.

When buying a mutual fund, it is often advisable to see how the fund has performed. In other words, what are the returns that a fund has delivered over different time periods. The return on an investment is the most significant indicator of a fund’s performance.

But returns vary over time and should be judged in relation to schemes with similar objectives. Remember, it is better to choose a fund which has delivered consistent returns rather than one which delivers high returns when the markets are up but wipes out your investment when the markets crash. The tables show the returns earned by schemes in the past three months, one year, three years and five years as on 28 May 2009. Returns of over one year are annualised to give a truer picture of the gain or loss.

Worst quarter performance: The performance of funds varies over time. When the markets rise, nearly all funds deliver stupendous returns but the true mettle of a fund shows in how it fares during a bear phase. In this column we have listed the worst performance of the fund over a quarter since its inception. This information is especially useful in context of the stock market crash that took the Sensex from 21,000 in January 2008 to around 7,200 in October 2008.

Price and cost
A fund with an above-average return could also be the one with above-average costs, which would affect the net return. These columns will help you decide whether to buy or sell the fund. The parameters are:

Net asset value (NAV): This is the value (price) of one unit of the fund scheme and is calculated by dividing the total assets of a fund (AUM) by the total number of units. A higher NAV doesn’t mean the fund is more expensive or that its returns will be lower.

Minimum initial investment: This is the minimum amount that you can invest in a fund. In case of equity schemes we have considered the minimum systematic investment plan (SIP) and for others it is the least amount required to buy a fund. A low SIP makes the fund more accessible to small investors.