Money on the markets

A maturing market amid the mayhem

Mutual fund investors rewarded for patience

October 30, 2009

A man speaks on a phone as he looks at a large screen displaying India's benchmark share index on the facade of the Bombay Stock Exchange (BSE) building in Mumbai May 18, 2009. REUTERS/Punit ParanjpeEquity fund investors had a lot to cheer about in the last seven months.

Stock market enthusiasts had almost given up hope after losing an average 52 percent in 2008, when the benchmark Sensex recorded its first annual fall after six years of gains. But a rally since the start of March has bought the smiles back.

By September 30, as many as 10 equity funds more than doubled their net asset values as fund managers bought into the global panic, data from global fund tracker Lipper, a Thomson Reuters company, showed. During the same period 145 Indian equity funds outperformed the 30-share Sensex, which returned 73 percent.

Domestic tax saving funds, which manage nearly 200 billion rupees ($4.3 billion dollars), also rose with the tide. The nation’s largest such fund, SBI Magnum Tax Gain, surged 83 percent.

Tax funds provide investors with an avenue to save up to 33,000 rupees in Income Tax, although the invested amount remains locked in for a period of three years.

Investors watch a display at a local share market in Chandigarh December 18, 2008. REUTERS/Ajay Verma

SBI’s smaller rival, Birla Sun Life Tax Relief 96, was a step ahead. The fund, which manages 10.3 billion rupees, leapt 90 percent in the nine months to September.

The open-ended scheme also gave an annualised 35.3 percent return during Sept 1996 – 2009, making it the world’s best-performing equity fund for that period, according to Lipper global data.

While equity funds may have given stellar returns in the past three quarters, analysts are hopeful that the stock market rally will continue for the rest of the year, helping investors recoup catastrophic losses suffered during 2008.

After seeing funds crash and recover, what is your approach now to investing in stocks via this medium?


Wanted to see actual fund performance after Samir Arora was bumped out.

Posted by heliofan | Report as abusive

I still think MFs are the best way to invest in equity. My regular investments in tax savings, include SBI and Birla funds, has generated great returns.

Am happy with returns, and would continue to invest in them big time!

Indeed.. patience pays!

Posted by Ram | Report as abusive

With few other options available I don’t think I have any other option but to rely on the markets and mutual funds. But with the ‘correction’ taking place in markets I wonder if a slightly bleaker picture is the one on the horizon.

Posted by Garg | Report as abusive

MFs are best, keep investing

Posted by Ranjit | Report as abusive

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