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One Year Mutual Fund Returns Worse Than Bank Deposit Returns


For the last one year investors have shown immense faith in equity mutual fund schemes. According to news reports SIP Investments per month have jumped to a huge Rs 2,100 crores from barely half the amount in early 2014.


Mutual fund investments are seeing record inflows as investors move away from real estate and gold to equities.

One Year Mutual Fund Returns Worse Than Bank Deposit Returns
The March and July 2015 period shows a staggering amount invested by investors in equity mutual funds of almost Rs 45,217 crores. But, some of the large equity funds have failed to match even interest of bank deposits in the last one year.

top mutual fund gainers

If you had to invest in bank deposits a year ago, you would have got an interest rate of 9 per cent per annum. Check the returns of some of the equity mutual fund scheme returns in the last one year.

Name of scheme Last one year returns
Axis Equity 3.26%
HDFC Equity -1.72%
Birla Sun Life Frontline Equity 6.50%
Reliance Equity 12.42%
Birla Sun Life Top 100 6.45%
Franklin India Flexi Cap Fund 15.21%
UTI Equity Fund 8.25%
ICICI Prudential Focused Blue Chip Fund 3.16%
L&T India Large Cap Fund 8.87%

Now, it is not as if that all mutual fund schemes have given poor returns. In the last one year very few schemes have beaten bank deposit interest rates prevailing a year back.


In addition, if you have an emergency and redeem your units before one year there will be an exit load of one per cent, which further reduces your returns.

Would mutual fund schemes returns be higher than bank deposit returns?

In the long term mutual funds may outperform the returns from bank deposits. To begin with the interest rates on bank deposits have fallen sharply in the last one year. From 9.25 per cent, banks like SBI are offering a maximum interest rate of 8 per cent on term deposits, which is even lower than interest rates on post office saving schemes.

At the present moment the Sensex has fallen from peak levels of 30,000 in March to the current levels of 25,700 points. So , if you are investing now probably you would be investing at a lower net asset value. This would give individuals an opportunity to make money in the next one year.

If you are investing through Systematic Investment Plans there is nothing much that one can do.

Read what is SIP or Systematic Investment PlansRead what is SIP or Systematic Investment Plans

If you are planning to invest a lumpsum amount the current net asset values, which have fallen substantially in the last 15 days make equity mutual fund schemes attractive.

Story first published: Wednesday, September 2, 2015, 8:56 [IST]
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