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The ‘fill it, shut it, forget it' advice — made famous in an advertising campaign by erstwhile Hero Honda to emphasise the fuel efficiency of its bike — doesn't seem to work for the mutual fund investors any longer.
Prolonged bearishness and the frequent volatility in the capital market appear to have made long-term investment planning using mutual funds difficult as no investment theme appears to be delivering consistently.
An analysis of the data of top-five mutual funds — provided by the fundsupermart.co.in web site — over one, three, five and ten years is revealing in that no specific theme or fund has consistently figured on the top-five list as on October 30, 2011.
In the one-year category, ICICI Prudential FMCG fund with an annualised return of 17.72 per cent comes on top, followed by Canara Robeco Indigo (16.35 per cent). The others are DSP BlackRock's World Energy, World Gold Funds and AIG World Gold with returns ranging from 15.71 per cent to 12.88 per cent.
In the three-year category, Reliance's Pharma Fund comes on top with a 49.55 per cent return. AIG World Gold is second with 47.83 per cent. DSP BlackRock World Gold Fund, ICICI Prudential Discovery and Mirae Asset India Opportunities Fund make the rest with returns ranging from 47.06 per cent to 41.17 per cent.
Of these, AIG World Gold and DSP BlackRock World Gold funds figure in one-year and three-year lists, because of the sustained rally the yellow metal has witnessed.
IDFC Premier Equity Fund is on top of the five-year toppers list with a return of 23.04 per cent. Reliance has Pharma and Banking funds (growth and bonus options) while UTI has Dividend Yield Fund.
The 10-year performance chart shows how much the mutual fund space has changed in recent years. The five toppers over 10 years are Reliance Growth (37.54 per cent return) and Vision (33.99 per cent) funds, Franklin India Prima Fund (31.7 per cent), HDFC Equity Fund (31.59 per cent) and HDFC Top 200 Fund (31.58 per cent). But none of them are on the top-five list over five-, three- or one-year periods.
This could be bewildering for a lay investor because funds' performances vary depending on market cycles; and not all investors have the expertise to constantly churn their portfolios.
Reliance Vision and Reliance Growth have given -4.9 per cent and -9.12 per cent return over one year as on July 29, 2011, on SIP investments, according to latest data available with the fund's Web site..
Performances of HDFC Mutual Fund's two top equity schemes — Top 200 and Equity — are equally revealing. While Equity Fund's one-year SIP has given an annualised return of -23.54 per cent, the return over three years is 16.36 per cent and over five years is 12.47 per cent. The Top 200 Fund SIP's return over one year is -21.60 per cent, over three years 13.07 per cent and five years is 11.41 per cent.
The fact the MF industry has lost nearly 6 lakh equity folios in the first six months of the current financial year is a reflection of the investors' predicament.
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