The stock markets have bounced back to new historic heights after the crash, however the mutual funds Net Asset Values (NAVs)are still lagging behind their top levels. The situation is more or less same with almost all mutual funds.
The NAV is the value of a share of mutual fund and is calculated daily based on the total value of the fund divided by the number of shares purchased by investors. The NAV for Prudential ICICI Dynamic Plan (Growth )which was 60.97 in May 06 was at 57.74 in October 06. Likewise, the SBI bluechip fund whose NAV was 11.58 on May 10, is still hovering around 11.11.
The mutual fund managers have defied the golden rule of ‘buying low and selling high’ Mutual fund bought heavily in May and September this year when the Sensex was above the 12000 level mark and remained net sellers in June and July when the sensex was around the 9000 level.
The mutual fund managers have to be more proactive in analysing the market trends so that they are able to deliver what they are supposed to- maximum returns on investors’money. Dear Fund Managers, The early bird gets the worm. Wake up and act fast.
Blanced funds: Good investment option
Balanced funds are a good investment option as they provide the benefits of both the equity and the debt markets, but enjoy the treatment of equity funds. A balanced fund is better than a combination of debt and equity funds separately due to tax benefits. HDFC Prudence, Magnum Balanced, Kotak balance and DSPML Balanced Fund are good choices in this category.
Look at the whole picture
Hi Nihal, I guess you are taking a very narrow view of the huge MF industry. One cannot generalise the entire industry basis the performance of a couple of funds. Look at the macro level.
The Indian mutual fund industry is set to climb new highs, with launch of several new funds, including Exchange Traded Funds (ETFs),Capital Protected Funds, international funds, gold ETF`s and real estate funds.
Just for your information MFs are emerging as a large investment pool that is now even eclipsing the investments done by FIIs.
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