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Despite All The Mutual Fund Hype Investors Are Still Making Losses


The last two years, has not been particularly good for mutual fund investors. Returns have been nominal, with several top Mutual Funds showing negative returns in the last 1 year.


In fact, most schemes are showing losses of near 10 per cent on 1 year returns. What this means is that the Sensex must rally significantly to recover those losses and than match-up to another 8 per cent returns that you would have got from bank deposits. At the moment that looks an herculean effort.

Despite All The Mutual Fund Hype Investors Are Still Making Losses
In the last 1 year, mutual fund schemes have seen money pour into their schemes like never before, through Systematic Investment Plans and lumpsum money. In fact, mutual funds have seen record inflows. Check mutual fund recent dividends here

Most mutual funds have shown negative returns in the last 1 year. Now, let's go by the top ranked mutual fund schemes by Crisil in the Large Cap space and their 1 year returns.

Name of fund1 year returns
BNP Paribas Equity Fund (G)-12.1%
Franklin India Opportunities-13.2%
Kotak Select Focus Fund - Regular (G)-9.1%
SBI Blue Chip-6.7

Now, for these funds to generate positive returns they need to wipe out these losses and than generate at least bank rate of returns, which means they should jump by at least 16-18 per cent from here on.



Take a look at some of the top ranked schemes in the Equity Linked Saving Schemes (ELSS) category. Again the below are ranked number 1 by Crisil in their respective categories.

Name of fund1 year returns
Axis Long Term equity-10.9%
Tata India Tax Savings Fund-21%

Diversified Equity

These are funds that are generally diversified. Their performance too has not been exceptional.

Name of fund1 year returns
ICICI Pru Value Discovery Fund (G)-10.6%
Principal Emerging Bluechip(G)-10.6%
UTI MNC Fund (G)-8.7%


The day's of churning out easy returns are over. Probably, investors who placed money about three years back, that is a year before the Narendra Modi government took charge at the centre are a happy lot. Those who invested a year and year and half back, are clearly disgruntled. The markets are unlikely to soar, so it is best to expect more moderate returns from equities this year.

In any case with interest rates falling the choices are very limited this year. However, what we are saying is that one should not expect phenomenal returns as seen in the past.

Stay invested through small and periodic investment. Avoid putting lumpum and do also remember that it pays to diversify your portfolio. The markets at best may move in a tight range this year and so returns from mutual funds are at best going to be nominal.

Read more about: bnp paribas elss
Story first published: Thursday, March 17, 2016, 10:21 [IST]
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