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Mutual Funds
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Investors invest in mutual funds to earn a decent return compared their normal savings bank account. The simplest investment available is the mutual funds. There are several schemes being operated by the mutual fund asset managers. One among them is the Equity linked savings scheme (ELSS). People invariably invest in this scheme as the amount invested up to Rs 1, 50, 000. – is exempted from the tax net under Section 80C. However, the lock-in period is only 3 years, compared to several other investment avenues available, where the lock-in extends up to 15 years.Hence ELSS is the most attractive fund available with the shortest lock-in period. Regretfully, this ELSS have been recent past been performing badly compared to the other schemes that are available in the mutual fund basket.

Normally an investor compares the returns for a one-year period, but this time period is too short for actually evaluate the performance of a fund.

These funds have been mostly putting in the money in large-cap stocks. While the mid cap and small cap stocks have been faring much better.Some schemes underperform like the sectoral funds to be more specific pharma stocks have given a very poor return compared to the other sectoral funds.It had been prudent had the fund managers focusing on sectoral funds diverted the funds to Metal or PSUs which have done better amongst the sectoral funds.

Sometimes the high expense ratio may also pull down the fund performance.The other reason could be the changes in the fund managers.

The underperformers are as follows

  • SBI Pharma fund 36%- The last dividend declared was on Jan 30, 2015 -Rs 10 per unit
  • Tata India Pharma & Health Care Fund—14.78%- Two fund managers changed one in  Dec 2015 and another in Apr 2016
  • Kotak World Gold Fund- -14.50%–Dividend on Dec 20, 2012- Rs0.88 per unit
  • Reliance Pharma Fund- -12.70% – Dividend on Mar 06, 2017-Rs  50 per unit
  • UTI Pharma & Healthcare Fund- -12.58%- Dividend on  Oct 28, 2010 – Rs 1.70 per unit
  • DSP Blackrock World Gold Fund- -9.19%- Dividend on Nov 19, 2010- Rs 0.88 per unit
  • Aditya Birla Sun Life Global Real Estate Fund- -7.96 %- no data available
  • DSP BlackRock World Energy Fund- -5.995%- no data available.
  • SBI IT Fund- -3.74 % -Dividend  on Jun 26, 2015-Rs 6. 00 per unit
  • Tata digital India Fund – -0.43%  Fund managers changed in Dec 2015 and again in Apr 2016

(Source- Value

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