Appraise Your Funds Portfolio Now

The role of mutual fund investments is increasing in the Indian economy. Mutual funds have strengthened the role of DIIs in the Indian equity market and we no longer dance to the tune of the FIIs.As for the retail investors, mutual funds are fast becoming one of the preferred destinations for parking their savings in lucrative investments. The proactive and investor-centric approach of the market regulator Securities & Exchange Board of India (SEBI) remains the prime mover of the widespread acceptance of mutual funds by retail investors. 

Last year, in the month of October, SEBI came out with a circular on ‘Rationalisation and Categorisation of Mutual Fund Schemes'. Mutual fund houses were directed to streamline and rejig their schemes in line with the circular. The aim of this circular was to help investors select and compare schemes in a far more transparent manner. The entire process, however, led to a structural change in the constitution of the schemes, while some of the schemes even ceased to exist. This exercise was tantamount to a resetting of the mutual fund industry in a radical manner. As an investor, what should you be doing now? Our cover story this time talks in detail about these changes, their implications for the returns of the fund and, in the light of these changes, how you should be reviewing your MF portfolio. 

These changes will make the past returns of the scheme no more than a mere number. One of our special reports in the issue talks about how the past performance of a fund may or may not help you to predict about the future returns of the scheme. It also dwells on whether contra-buying or bottomfishing will work for you in mutual funds. 

In another special report, we have tried to clear the mist surrounding value funds and growth funds. The story will help you understand how these funds behave in different market conditions and how these funds can be used to complement your portfolio. 

I believe the stories in this issue will help you to build a strong mutual fund portfolio.

Review Your Portfolio 

I have invested in SBI Blue Chip Fund - Regular Plan and SBI Equity Hybrid Fund with one-year investment horizon. Is it a good fund or risky fund? Should I quit as early as possible?

 - Deepak Solanki 

Editor Responds: 

Both the funds that you have invested in have retained their earlier character. Our cover story of this issue will guide you on how to review your portfolio.