Concept Consultants

A compilation of annualised returns by Value Research shows only four equity diversified mutual fund schemes have given positive returns, With Sensex falling by over 8 per cent during this period it is a surprising growth that these four schemes have managed to perform in a positive way. The growth of these four recorded between 1 per cent and 2.57 per cent.

Mutual Fund

Those funds which have invested in non-Nifty, illiquid and high FII-ownership stocks have been affected the most, said Mr Sridhar.

While only four of the 137 equity diversified schemes gave positive returns, about 70 per cent of the equity diversified schemes have fared worse than both the Sensex and even their own benchmark indices.

Debt Mutual Funds, Indian Market News, Mutual Funds, news DSP, ICICI, markets, MF, Mutual Funds, Positive Returns, Sensex

Today the Indian government announced a higher than expected borrowing plan. This caused panic in the market where the participants had taken huge positions following the rate cuts done by RBI last week. The bond yield had touched its all-time low of 4.86 percent intra-day on Monday. The 10-year benchmark bond yield closed at 5.87 percent on Wednesday 7-Jan-2009. Thursday is a holiday for the markets.

The government has said that it would issue 500 billion rupees ($10.3 million) of fresh bonds by March with 150 billion rupees of bonds to be auctioned on Friday. The government has already borrowed 1.77 trillion rupees of bonds this year compared to 1.5 trillion rupees last year.

But this rise in yields seems like a temporary reaction to Fridays auction. With inflation expected to ease further and interest rates to decline, this rise might just be the best opportunity to invest in bonds funds. The bond yields should start their downward journey soon.

Remember that bond yields have an inverse relation with the returns on bond funds.

Debt Mutual Funds bonds, Interest rates, Mutual Funds