The Hindu Business Line : MIPs stage a comeback

Monthly income plans (MIPs), which for long have been quite out of favour in investment circles, are rapidly staging a comeback, with a host of them touching their all-time highs.

The advancing equity market coupled with steady performance on the debt front has resulted in the recent rise in the net asset values of the MIPs, which are predominantly debt-oriented funds with limited exposure to equities.

A look at the latest NAVs shows how a number of MIPs are riding a new high, thanks chiefly to the performance delivered by their equity components, which in many cases account for 10-20 per cent of the assets.

The development, as mutual funds see it, is a comeback of sorts for a category of funds that has not been in the news for some time - a theory that distributors too confirm.

"MIPs and a few other funds carrying a blend of equity and debt in their portfolios are among the several dozen funds that have moved up the performance charts," said Mr Prasunjit Mukherjee of Plexus Management while referring to a table of NAVs pertaining to May 12 and September 17.

The Sensex, it may be mentioned, did a u-turn on May 11 after it moved well past the 12,500 mark.

The list of rising MIPs includes those managed by Birla Sunlife, HDFC, Franklin Templeton, SBI, ING Vysya and HSBC. There are a few others. In some cases, all investment plans within a certain MIP are part of the list. Birla Sunlife MF's `Savings 5' and `Wealth 25', for instance, may be cited here.

DSP Merrill Lynch MF's Savings Plus - in all its plans, conservative, moderate and aggressive - is there as well. The first moved up from Rs 11.55 to Rs 11.64, the second from Rs 14.47 to Rs 14.55 and the third from Rs 13.06 to Rs 13.07. The figures relate to the May and September NAVs respectively.

The list also embraces a few asset allocation products, including those offered by Prudential ICICI, Franklin Templeton and Birla Sunlife.

HDFC Prudence: Rs-100 mark

HDFC Prudence, which carries a hybrid portfolio oriented more towards equity, has recorded two firsts for itself in the context of the advancing indices. One, its NAV has crossed the Rs 100-mark. Two, it stands at an all-time high. As on September 15, it was Rs 101.72. The fund's NAV on May 12 was Rs 98.26.

HDFC Prudence, which migrated into the HDFC MF fold a few years ago from the erstwhile Zurich MF, has provided about 23 per cent since its launch in 1994. Its assets stood at over Rs 1,790 crore as on August 31.

In the equity funds category, schemes such as Franklin Infotech, Birla Sunlife Frontline and Reliance NRI Equity have also moved up between May 12 and September 17.

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