Mutual Funds outperform Sensex

Marketmen may be jubilant about the Sensex touching the 15,000-point milestone, but mutual fund investors are laughing all the way to the bank, thanks to many funds outperforming the key index in the last 12 months.

While the 30-share Sensex has grown about 40% since July 2006, when it was quoting around 10,600 points, 106 funds have given higher returns than the bellwether.
Among the best performing equity funds are Standard Chartered Equity with 79% returns over a year, JM Basic (76%), ICICI Prudential Services (75%), ICICI Infrastructure (63%) and DBS Chola (61%), according to data complied by ValueResearchOnline.

The assets under management of the 32 fund houses in the country have grown 25% to over Rs4 trillion in the first 6 months of the year, the latest data of Association of Mutual Funds in India (Amfi) shows.

“The new levels of the benchmark index show more demand for equities and is a sign of recognition for the strength and potential of Indian economy,” Amfi head A.P. Kurien said.

While a bullish market does not affect the mutual fund industry directly, Kurien said the funds “are pleased that it implies a strong growth potential for the markets.” The Sensex on Friday crossed the historic 15,000 mark to touch an intra-day high of 15,007.22. It, however, ended the day at 14,964.12—which is still a new closing high.

“Investors are happy with the milestone... Some of the funds have performed better than the Sensex of late as growth in the mid-cap has led the rise in blue chips,” ValueResearch CEO Dhirendra Kumar said. Dismissing concerns of a correction after every milestone, Kumar said a slight correction should not bother MF investors as long as the funds remain in the black.