Financial Daily from THE HINDU group of publications
Monday, Mar 06, 2006
Financial Daily from THE HINDU group of publications Monday, Mar 06, 2006 |
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Mutual Funds Markets - Performance Columns - Mutual Confidence Sell decision on funds - Is it always a dilemma? Nilanjan Dey
New launches Reliance, Sundaram MFs have worked out agriculture-focussed funds Kotak and Canbank have lined up schemes on multi-cap spectrum Those of us who have sold our equity funds before the Budget, fearing a decline in the market or some serious volatility, have been caught on the wrong foot. The market has moved ahead by a couple of hundred points, NAVs of equity funds are up and investors are showing no signs of giving up. The situation makes us aware, once again, of a major characteristic that most of us display during stress or in periods of anxiety - selling too early and taking profits when we could have waited for some more time. In short, impatience. As investment professionals point out, taking home profits is entirely an individual's decision. Or, that is the way it should always be. And if you have met your profit targets, you may have a clear case for booking gains. Consider, for instance, FMCG funds - the category that has beaten all the others in the past one year or so. If you had entered them in, say, March 2005, you would have profited handsomely by now. But is this enough? Should this prompt an exit right away? Only you and no one else can answer these questions. For those who are interested in trivia, here's a handy snippet: In the past one week (as on March 3), diversified equity funds have provided about 4.5 per cent returns. In fact, all categories of equity funds gained during this seven-day period.
Let down by Budget?
An investor who thought the Budget would spoil his fun must be feeling a bit let down by now. However, one cannot really blame him for feeling jittery just days before the FM speech in Parliament on February 28; the average investor, after all, will always have concerns like these and more. Allow me at this stage to draw your attention to equity funds that have fared relatively poorly in the past year. Compared to 75 per cent-plus delivered by FMCG funds, schemes dedicated to auto, pharma or technology sectors have lagged behind. In fact, some of them do not come anywhere near the top score. It remains to be seen how these categories perform this year.
Dividend mela
On another front, big dividends are still being declared by tax-saving funds. With the fiscal-end coming to a close, this is the last chance for investors to enter the tax-savers this year. They should remember the essentials, especially the three-year lock-in period that characterises all ELSS investments. Meanwhile, some new proposals have been sent to SEBI for approval. While Reliance Mutual Fund and Sundaram Mutual Fund have worked out agriculture-focussed funds, players such as Kotak Mutual Fund and Canbank Mutual Fund have lined up schemes that will invest across the multi-cap spectrum. Among the other interesting ideas is Principal PNB Mutual Fund's banking index fund. Feedback may be sent to nilanjan@thehindu.co.in
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