With four of the top five tax-plan funds delivering negative returns in the past year, this category has fared worse than the equity diversified funds. The rather impressive three-year returns of the tax-plan scheme, Taurus Libra Taxshield, seem ordinary when viewed in a three-year timeframe.
Index funds have mirrored the performance of their underlying indices. As they have lower expense ratios, index funds as a category have outperformed the tax-planning schemes over three years by a slight margin. Though OptiMix Asset Allocator is at the top among FoFs, it is the worst affected by the current turmoil in equity markets.
Both debt- and equity-oriented balanced funds have fared badly in the past year. Equity-oriented funds have lost more than a quarter of their value in the past six months. Balanced debt funds—due to lower exposure to equities—have contained their losses. Benchmark Split Capital Fund, with a fraction of DSP ML scheme’s assets, have delivered enviable returns in the past year.
While the fundamentals of both the IT and pharma industries remain unchanged from a year ago, the depreciating rupee, along with the pharma stocks’ defensive nature, has helped attract renewed interest. IT funds still have a long way to go before they reclaim their losses.
The takeawaysDespite the dip in the banking sector, equity diversified funds have allocated the largest chunk of their corpus to banks
Reliance Industries remains the top stock held by mutual funds, which amounts to 2.7% of its equity share capital
