Skip to main content

Fund of funds perform better over long tenures

Buy Gold Mutual Funds

Invest Mutual Funds Online

Download Mutual Fund Application Forms

Call 0 94 8300 8300 (India)

 

ALTHOUGH, their numbers are few, equity-oriented, multi-manager fund of funds (FoFs) have not failed to deliver decent returns to investors, which again are not many.

Two FoFs that had a pre-dominant equity exposure and were launched more than five years ago, have both delivered returns better than what the equity market's benchmark index, S&P CNX Nifty, has given in longer time frames of three to five years. Another FoF, which was launched close to three years back, has outperformed Nifty in its one-year and two-year returns. This is revealed in a performance analysis of these funds by Financial Chronicle Research Bureau over the past five years (see chart) based on data from Capitaline NAV database.

These three FoFs — ING 5 Star Multi-Manager FoF Scheme, Kotak Equity FoF and Quantum Equity Fund of Fund — invest in equity funds of more than one mutual fund, keeping an overall equity exposure of more-than-90-per cent consistently over the past one year. The oldest of them, Kotak Equity FoF, has been operational since August 2004, followed by ING 5 Star Multi-Manager FoF in January 2007, and Quantum Equity FoF in July 2009. The first two are benchmarked to Nifty, while the last is bench marked to BSE-200.

As of their net asset values (NAV) on June 26, the longest-tenure, five-year compound annual growth rate (CAGR) of 5.6 per cent of ING 5 Star Multi Manager FoF was higher than Kotak Equity FoF's 3.6 per cent, which exactly matched Nifty's five-year CAGR of 3.6 per cent as on Nifty closing of June 26. In their respective three-year and four-year CAGRs, ING 5 Star Multi-Manager FoF continued to score higher with 9.9 per cent and 7.9 per cent figures, followed by Kotak Equity FoF's 5.5 per cent and 5.7 per cent, and Nifty's 5.4 per cent and 4.4 per cent. Over the past two years, however, Kotak Equity FoF, has delivered returns lower than that of Nifty. Its oneyear and two-year CAGRs of -4.0 per cent and -7.5 per cent has underperformed Nifty, which returned -1.4 per cent and 6.4 per cent CAGRs, respectively. While ING 5 Star Multi-Manager FoF with one-year and two year CAGRs of -5.3 per cent and -0.3 per cent, respectively, continued to outperform Nifty, the new entrant Quantum Equity FoF too, outperformed Nifty with respective CAGRs of -6.2 per cent and -1.0 per cent.

There are three more equity-oriented FoFs, Birla Sun Life Asset Allocation Aggressive, ICICI Prudential Advisor Aggressive and ICICI Prudential Advisor Very Aggressive, having Nifty index as their respective benchmarks, but their portfolios over the past one year tended to have an overall equity exposure of below 80 per cent, with the three funds taking debt exposure of 10 to 20 per cent through investments in debt funds and a gold exposure of 5 to 25 per cent through gold ETFs. Their performance was, therefore, not measured.

Happy Investing!!

 

We can help. Call 0 94 8300 8300 (India)

 

Leave your comment with mail ID and we will answer them

                        OR

You can write back to us at prajnacapital [at] gmail [dot] com

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds        Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds     Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds    Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds             Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds              Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Gold Mutual Funds             Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Tata Mutual Fund

Being a part of the Tata group, the fund has the backing of a very trusted brand name with strong retail connect. While the current CEO has done an excellent job in leveraging the Tata brand name to AMC's advantage, it is ironic that this was just not capitalised on at the start. Incorporated in 1995, Tata Mutual Fund remained an 'also-ran' fund house for around eight years. Till March 2003, it had a little over Rs 1,000 crore in assets and 19 AMCs were ahead of it. But soon after that the equation changed. It was the fastest growing fund house in 2004 and 2005. During these two years, it aggressively launched six equity funds, two debt funds and one MIP. The fund house as of now stands at No. 8 in terms of asset size. This fund house has a lot to offer by way of choice. And, it also has a number of well performing schemes. Tata Pure Equity, Tata Equity PE and Tata Infrastructure are all good funds. It also has quite a few good debt funds. The funds of Tata AMC are known to...
Read more

UTI Mutual Fund

Even though only a few of UTI’s funds are great performers, this public sector fund house has many advantages that its rivals do not. It has a huge base of retail equity investors and a vast distribution network. As a business, it looks stronger than ever, especially in the aftermath of credit crunch. UTI is, by a large margin, the most profitable fund company in the country. This is not surprising, since managing equity funds is more profitable than debt. Its conservative approach and stable parentage is likely to make it look more attractive to investors in times to come. UTI’s big problem is the dragging performance that many of its equity funds suffer from. In recent times, the management has made a concerted effort to improve performance. However, these moves have coincided with a disastrous phase in the stock markets and that has made it impossible to judge whether the overhaul will eventually be a success. UTI’s top performers are a few index funds, some hybrid funds and its inf...
Read more

Salary planning Article

1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon. 2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house. 3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C. 4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary. 5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would...
Read more

8 Investing Strategy

The stock market ‘meltdown’ witnessed since the start of 2005 (notwithstanding the recent marginal recovery) has once again brought to the forefront an inherent weakness existent in our markets. This is the fact that FIIs, indisputably and almost entirely, dominate the Indian stock market sentiments and consequently the market movements. In this article, we make an attempt to list down a few points that would aid an investor in mitigating the risks and curtailing the losses during times of volatility as large investors (read FIIs) enter and exit stocks. Read on Manage greed/fear: This is an important point, which every investor must keep in mind owing to its great influencing ability in equity investment decisions. This point simply means that in a bull run - control the greed factor, which could entice you, the investor, to compromise with your investment principles. By this we mean that while an investor could get lured into investing in penny and small-cap stocks owing to their eye-...
Read more

Debt Funds - Check The Expiry Date

This time we give you an insight into something that most debt fund investors would be unaware of, the Average Portfolio Maturity. As we all know, debt funds invest in bonds and securities. These instruments mature over a certain period of time, which is called maturity. The maturity is the length of time till the principal amount is returned to the security-holder or bond-holder. A debt fund invests in a number of such instruments and each of these instruments would be having different maturity times. Hence, the fund calculates a weighted average maturity, which would give a fair idea of the fund's maturity period. For example, if a fund owns three bonds of 2-year (Rs 30,000), 3-year (Rs 10,000) and 5-year (Rs 20,000) maturities, its weighted average maturity would be 3.17 years. What is the big deal about average maturity then, you may ask. Well, knowing a fund's average maturity is important because it tells you how sensitive a fund is to the change in interest rates. It is ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now