Now there are more than several reasons why you should look at investing in the mutual funds. After sailing through the tough waters, the returns on the MF investments have improved substantially, as almost all fund categories are posting more than 10% absolute returns over the period of one year.
The Net Asset Value (NAV) on Thursday for the categories including, equity, debt, balanced, MIP, liquid, ELSS, ETF and guilt funds posted more than 10% return as the top performing schemes for the respective categories. The performance of equity schemes have been outstanding on the count of one year and also for past three years as the cumulative returns have been more than 20% for over 100 top performing schemes by different Asset Management Companies (AMCs).
More than 10 schemes have provided more than 10% returns in last year in equity, whereas the debt funds have not been able to generate more than 10% over three years as on Thursday.
This clearly shows a transitional phase wherein the pattern is changing towards the equity funds. Just a couple of months back, the scenario was different when the debt funds offered better returns than equity-based schemes. When the returns on equities are improving, as the classic theory, return on debt is reducing gradually, with falling demand for the debt instruments. The trend clearly suggests that the year ahead is going to be a rewarding one for the equity MFs. This could also be well reciprocated with the expectations of interest rates easing down.
The investors seemed to have identified the opportunity, placing demand for the equity funds. The Asset Under Management (AUM) of mutual funds in India have increased by 11% with Rs. 184 billion making the total AUM at Rs. 1.8 trillion in January 2012 from December 2011.
MF UPDATE
HDFC revises exit load under HDFC Medium Term Opportunities Fund
HDFC MF has announced to revise the exit load structure under HDFC Medium Term Opportunities Fund, an open ended income scheme. As per revised structure an exit load of 2% will be charged if units are redeemed or switched out within 12 months from the date of allotment and 1% will be charged if units are redeemed or switched out after 12 months but within 18 months from the date of allotment. The revised exit load structure will be effective from 16th February 2012.
HDFC announces dividend under its three schemes
HDFC MF has announced dividend under HDFC Multiple Yield Fund, HDFC Multiple Yield Fund - Plan 2005 and HDFC Core & Satellite Fund. Under HDFC Multiple Yield Fund and HDFC Multiple Yield Fund - Plan 2005, the quantum of dividend for distribution will be Rs. 0.75 per unit for Individuals & HUF and Rs. 0.6428 per unit for others. Moreover, the quantum of dividend will be Rs. 2 per unit for HDFC Core & Satellite Fund. The record date for dividend distribution has been fixed as 16th February 2012.
Reliance appoints new fund manager
Reliance MF has appointed Sanjay Parekh as Senior Fund Manager - Equity Investment of Reliance Capital Asset Management Limited, with effect from 1st February 2012. He has over 17 years of experience in capital market. Earlier he has worked with ICICI Prudential Asset Management Company Limited as Senior Fund Manager.
Fidelity announces change in fund management responsibilities
Fidelity MF has announced to change fund management responsibilities under certain schemes, effective from 15th February 2012. Accordingly, Shriram Ramanathan and Mahesh A. Chhabria will manage Fidelity Cash Fund, Fidelity Ultra Short Term Debt Fund, Fidelity Wealth Builder Fund, Fidelity Fixed Maturity Plan Series V-Plan A, Plan C, Plan E, Plan F and Fidelity Fixed Maturity Plan Series VI-Plan A - Plan F. Furthermore, Shriram Ramanathan and Vikram Chopra will jointly manage Fidelity Short Term Income Fund, Fidelity Flexi Bond Fund, Fidelity Flexi Gilt Fund, Fidelity India Childrens Plan - Education Fund, Marriage Fund and Savings Fund (investments in debt and money market instruments).
Franklin Templeton revises exit load under its scheme
Franklin Templeton MF has announced to revise exit load structure under FT India Feeder-Franklin U.S. Opportunities Fund, effective from 14th February. As per revised structure an exit load of 1% will be charged if units are redeemed or switched out within 1 year from the date of allotment. The investment of objective of the scheme is to provide capital appreciation by investing predominantly in units of Franklin U. S. Opportunities Fund, an overseas Franklin Templeton mutual fund, which primarily invests in securities in the United States of America.