It wasn’t the year of debt-oriented balanced funds (second table); As a category it earned half of what equity-oriented balanced fund (first table) returned in 2007. All top five balanced-equity funds posted over 50% return in 2007. LICMF Children’s Fund was way ahead of the pack among balanced-debt funds.
MIP (third table) as a category is going out of favour, but those seeking better returns than bank FDs can opt for these schemes. Kotak funds (bottom table) have taken the top two slots in FoF category.The fund house seems to have cracked this category of investing better than others.
The best performing tax saving fund (second table), earned more than the best equitydiversified scheme (first table) in 2007. That’s remarkable because tax planning funds follow lower risk approach.Taurus has a winner in both categories, breaking the myth that small fund houses don’t deliver on returns.
The index funds (bottom table) have more or less fared uniformly and matched the index they mirror.The returns from midcap funds (third table) are impressive and consistent. The BSE Mid-cap index earned 55% year-to-date, the best performing mid-cap fund (Birla Midcap) beat the benchmark by 10%.
The Takeaways:
Change in compounding frequencies make a big difference to returns you get
Compounding over - higher frequencies increases the effective yield
Reinvest the earnings from an investment as you receive them; your investment grows exponentially
