Tax-saving equity funds top weekly returns chart

Equity-linked savings schemes recorded the best average return of 7.33 per cent in week to Friday across all categories. On the debt side, barring gilt and medium-term income schemes, others registered positive average returns.

In tax-saving schemes, the top three performers were Libra Taxshield '96 with 13.03 per cent returns followed by Pru-ICICI Tax Plan and Principal Tax Plan that gave 10.28 per cent and 10.23 per cent returns respectively.

Diversified equity schemes posted 6.05% average return. Among diversified equity funds, the best performers were Taurus Discovery Stock (13.59 per cent), Magnum Midcap (10.54 per cent), and Franklin India Opportunities (9.87 per cent).

Index funds gave 4.87 per cent average return. In comparison, the Sensex and Nifty were up 5.23 per cent and 5.27 per cent, respectively.

Within index schemes, Nifty Junior BeES gave the highest return of 5.77 per cent followed by Pru-ICICI Index and UTI Sunder that gave 5.5 per cent and 5.36 per cent returns respectively.

All sector funds beat their benchmark indices last week.

Technology funds with 6.83 per cent average return outperformed the BSE IT Index and the CNX IT Index that gained 5.49 per cent and 4.82 per cent respectively. Technology sector schemes were the second best performing category after tax-saving schemes. Magnum IT with 8.44 per cent returns stood first in the category.

Fast-moving consumer good funds gave 5.18 per cent average returns compared with 4.15 per cent rise in the BSE FMCG Index.

Pharmaceutical sector funds notched 5.03 per cent average returns, while the BSE Healthcare Index ended 4.21 per cent higher.

Automobile funds notched up average return of 4.82 per cent, outperforming the BSE Auto Index that increased 3.92 per cent.

Banking funds with 3.37 per cent average return also fared better than the CNX Bankex Index that rose 0.85 per cent.

The bond yields hardened over the week due to rise in size of government's second borrowing for the month, higher than expected cut-off at the auctions, inflation worries, and fears of interest rate hikes.

The government raised this month's borrowing to Rs 9000 crore from Rs 5000 crore.

It set Rs 96.84 or 7.9171% cut-off yield for the 7.37%, 2014 bond, higher compared with expectations of 7.89 per cent.

For the 7.94 per cent, 2021 bond, RBI set a cut-off of Rs 95.65 or 8.4573 per cent compared with the estimated 8.40 per cent.

The hike in domestic fuel prices pushed the wholesale price index inflation for week to June 10 to a 50-week high of 5.24 per cent from 4.72 per cent, a week ago.

US Federal Reserve is widely expected to hike rates on Thursday to curb inflation. This is expected to prompt the Reserve Bank of India to hike interest rates in its quarterly review of monetary policy in July.

Over the week, the yield on the benchmark 10-year government bond, the 7.59 per cent, 2016 rose to 8.0963 per cent compared with 7.7995 per cent last week.