Prajna Capital - An Investment Guide

Due to its concentrated bets in growth stocks, the returns of JM Financial's funds can deviate substantially from category norms. In a bull run, it may have some of the savviest skippers going. But its dramatic fall in slumps is a turn off. If you find that hard to believe, consider JM Emerging Leaders and JM Basic. Both these funds were amongst the top 5 performers of 2007, JM Basic bagging the coveted No. 1 slot. In this market slump, Emerging Leaders fell by 72.46 per cent and Basic, 66.17 per cent, when the category average was a 49.74 per cent fall (Year-to-date return as on October 13). As for JM Equity, it makes for no comparison with its siblings. It actually underperformed the category average in 2007, when the other two were on a roll, and fell harder than the average when the market slumped. Make no mistake. We think Sandip Sabharwal, Chief Investment Officer-Equity, is a skilled manager who has the courage to ride his convictions. But that said, we think this fund hou...

If 2008 was a bad year for stocks, it was brutal for funds that rode high on the bull run posting big gains last year. Diversified equity mutual funds (MFs) that logged in returns between 70% and 110% in 2007 and emerged on top have put up a dismal show during the current market meltdown. Top MFs in 2007 have significantly underperformed the benchmark indices posting some of the biggest losses this year. In all, 14 funds that were in the top 40 list last year have ended up at the bottom of the ladder, the analysis shows. JM Basic, Canara Robeco Infrastructure, SBI Magnum COMMA and Midcap are some of the funds that have registered huge declines after growing more than 70% last year.Most of these funds invested mainly in engineering, construction, commodities, small and mid-cap stocks - all of which did well during last year’s bull run. But with commodities prices falling sharply and real estate impacted by the demand slowdown, stocks in these sectors have taken a heavy beating. In fact,...