scorecardresearch
Newer funds perform better

Newer funds perform better

Since the beginning of the year, the newer funds have performed better than the older lot. This is because the younger funds have been able to avoid the brunt of the downturn in the markets, even as the older funds remained invested.

Since the beginning of the year, the newer funds have performed better than the older lot. This is because the younger funds have been able to avoid the brunt of the downturn in the markets, even as the older funds remained invested. However, this does not make them reliable as they are yet to establish a longterm track record.



Mid-cap stocks, which lured investors with high returns during the bull run, have proved detrimental for investors recently. Since January, the funds based on these stocks have lost 41% while index funds, which mostly constitute blue-chip stocks, have been more resilient in containing the losses. 

The low exposure to stock markets helped debt-oriented funds register lower losses than their equity counterparts. However, in the long run equity funds have earned better returns.Also, the three-year average return of debt funds is the same as PPF or fixed deposits, which are more secure instruments.




Considering the turmoil in the equity markets, Birla Sun Life MIP II has delivered high returns since the start of the year. The fund has outperformed the top equity diversified fund in the past six months. In FoF category, plans with lower assets under management earned higher returns than bigger funds.


 The takeaways

 Mutual funds bought Sesa Goa as the company earmarked an ambitious plan to double its iron ore production capacity by 2010.

They sold Ranbaxy Laboratories in the open offer, which is 42% higher than the stock trading price in August.