Monday, June 23, 2008

Should you invest in Mutual Funds?

I will give you an idea of underperformance of several mutual funds over the last two years compared to their benchmark indices. The NAV of the mutual funds have been taken on 20 June. Sensex was at 14571.29 and BSE500 was at 5747.63 on 20 June.

SchemeLaunch DateMutual Fund ReturnSensex ReturnBSE 500 Return
UTI Contra Fund22 March 2006-0.016%10905.2 33.62%4355.5 31.96%
Reliance Equity Fund RP(G)7 March 200624.7%10735.36 35.73%4286.73 34.08%
UTI Leadership Equity Fund30 Jan 200625.2%9919.89 46.89%3982.17 44.33%
ICICI Pru Fusion Fund27 Feb 200610282.09 41.71%4113.14 39.74%
SBI Blue Chip Fund20 Jan 200612.1%9520.96 53.04%3892.38 47.66%
Franklin India Smaller Companies Fund14 Dec 2005-0.013%9241.76 57.67%3745.57 53.45%
HDFC Long Term Equity Fund27 Jan 200610%9870.79 47.62%4005.33 43.5%

The schemes cover from all the different mutual fund houses, ICICI, HDFC, Franklin, SBI and UTI. Nobody has been able to outperform the indices over the last 2 - 2.5 years. Is it a better idea then to invest in Index funds?
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1 comment:

Rajorshi said...

Question is, can you judge if index funds are better than mutual funds or otherwise based on just 2-2.5 yrs or even 5 yrs performance?

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