Tax saving funds top returns chart

Equity-linked savings scheme category emerged as the top performer among various categories for the week to Friday, notching up the highest average return of 2.13 per cent.

The pharma sector funds posted a significant rise to 2.09 per cent from 0.54 per cent in the previous week.

However, technology funds were the worst-hit and the only category to have registered negative average return.

On the debt side, the rise in bond yields led to a fall in returns of long-term gilt funds. However, short-term debt schemes maintained stable returns.

In tax-saving schemes, Principal Mutual's Personal Tax Saver fund performed the best, delivering 3.93 per cent return, followed by ING Vysya Tax Savings Fund (3.75 per cent) and Kotak Tax Saver Fund (3.48 per cent).

The worst performer was Sahara Tax Gain Fund, with 0.02 per cent return for the week.

Diversified equity schemes registered 2.95 per cent average return. In this category, the top three performers were Taurus Star (7.63 per cent), Taurus Discovery (5.34 per cent) and UTI Infrastructure (5.02 per cent).

Five diversified equity schemes ended in negative territory. They were Kotak Contra (-0.02 per cent), BOB Diversified (-0.26 per cent), ING Vysya Dividend Yield (-0.36 per cent), Principal Dividend Yield (-0.37 per cent), and Kotak MNC (-1.32 per cent).

Index funds posted 1.65 per cent average return, underperforming the Sensex and the Nifty, which ended 1.74 per cent and 1.77 per cent up, respectively.

Nifty Junior BeES, benchmark mutual fund, was the top performer scheme with a 2.22 per cent average return.

Pharmaceutical funds posted average weekly return of 2.09 per cent, beating BSE Healthcare Index, which rose 1.19 per cent on the back of robust September quarter earnings of major pharma companies like Ranbaxy, Sun Pharmaceutical Industries, and Cipla. The top-performing scheme was Reliance Pharma Fund, posting 3.11 per cent return.

The FMCG category underperformed, giving 0.79 per cent average return, compared with 1.51 per cent rise in BSE FMCG Index.

Similarly, banking sector funds category, with 0.58 per cent average return, fared poorly compared with CNX Bankex, which rose 1.22 per cent.

UTI Banking Sector Fund delivered 1.49 per cent average return, while Reliance Banking Fund underperformed, ending with a negative return of 0.33 per cent.

Compared with the 0.22 per cent fall in BSE Auto Index, automobile funds category gave a positive average return of 0.53 per cent.

The worst performance was from technology funds category, after topping the charts for a couple of weeks earlier. Technology funds category, however, was able to beat benchmark indices.

Compared with CNX-IT Index and BSE-IT Index falling 2.16 per cent and 1.66 per cent respectively, this category posted negative average return of 0.27 per cent.

On Friday, the 10-year benchmark, the 7.59 per cent, 2016 bond closed at 7.6415 per cent, compared with 7.6086 per cent in the previous week. The rise in yield levels impacted long-term schemes, which invest at the long end of the yield curve.

Long-term gilt and medium-term income funds registered a fall in returns. Medium- and long-term gilt funds posted 0.11 per cent average return, compared with 0.18 per cent in the previous week.

Medium-term income schemes fetched 0.08 per cent average return, compared with 0.12 per cent in the previous week.

In a rising yield scenario, short-term schemes managed to put up consistent performance as these schemes have low mark-to-market component and do not take a hit on their returns.

LIC Mutual's Liquid Fund, JM Money Manager Super Plus Fund, and Tata Liquidity Management outperformed in the liquid fund category, giving 0.14 per cent return.