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MFs gave the best investments

Samata Dhawade

Anyone who parked money in a mutual fund at the start of 2001-02 and remained invested throughout the year reaped returns better than those churned out by other avenues such as bank deposits and equity shares.

For mutual fund investors, the returns ranged between 10 and 23 per cent, according to our study. The schemes that have been considered for the study are from equity-oriented, income, balanced and gilt segments.

These have been well ahead in terms of one-year returns, compared with an average 7-8 per cent that one-year bank deposits have to offer.

The returns are calculated on the basis of the movement in net asset values of major growth schemes within the equity, balanced, income and liquid segments.

The selection of the schemes was made on the basis of the aggregate corpus of the schemes which account for at least 80 per cent of the total corpus in each of these categories.

Among the broad categories, gilt or liquid funds were the best performers buoyed by an outstanding rally in government securities. They posted an average return of 23 per cent.

This meant that an investor who put Rs 100 into a gilt scheme at the beginning of the fiscal received Rs 123 at the end of it.

The second best category was income funds with a average return of 12.6 per cent. Comfortable liquidity despite the huge government borrowings programme and low interest rates bode well for the plans.

Balanced funds, the third best with an average return of 12.5 per cent, rode on the twin benefits of better returns from the debt mart and repeated profit booking in equities.

Equity growth funds were the fourth best with an average return of 10.8 per cent, meaning an investor who put Rs 100 into equity schemes at start of the fiscal gained Rs 10.80 at the end of it.

Equity fund managers seem to have been on their toes throughout, churning their portfolios to post positive returns against the backdrop of a 4 per cent fall in major indices during the fiscal.

Triggers in the form of increased outlay for infrastructure, better monsoon, divestments and pharma policy 2002 spawned short term rallies throughout the year.

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