Reliance Regular Savings returns were three times the category average in the past one year. In general long-term MIPs have fared slightly better than the short-term MIPs and both earn a shade better than what a bank FD earns, which is where they score a point.
Fund of funds cash in on the performance of existing funds. Both OptiMix and Kotak have two funds each in the top five. What determines the performance of these funds is the ability to invest in the right fund managers. ETF are slowly catching up, especially with the cost structures that they are built around.
The Takeaways
• Change in compounding frequencies makes 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
Relatively smaller funds Taurus Starshare and Kotak Oppurtunities have earned higher returns, debunking the myth that high AUM funds perform better. Over the past five years Magnum Tax Gain has beaten the best performing fund in the equity-diversified category. Tax plans have earned as much as the equity-diversified funds.
The virtues of index fund investing can be reaped the most when the markets are rising; all the funds in this category have more or less mirrored the index they track. The mid-cap stocks are still strong; Birla Midcap has outperformed its peers and the category has earned better than the equitydiversified set.
