17 January, 2021

Is There Life After Death?

Funds need the right mix of ICE and brick-and-mortar to survive

Is There Life After Death?
outlookindia.com
-0001-11-30T00:00:00+05:53

By any measure, 1999 was the year of the mutual fund. Riding high on tax exemptions granted in Budget 1999, Indian mutual funds raised more money in 1999-2000 than it had ever done before while crossing the Rs 100,000-crore mark in assets under management. As stocks boomed, and ice (infotech-communication-entertainment) shares soared, there was just one of 143 equity fund schemes-the unfortunate PNB Premium Plus-that showed negative growth in its net asset value (NAV) in 1999. Ninety-four of them outperformed the Sensex, and as many as 71-a whisker short of half-gave over a 100 per cent return!

How different has the new millennium turned out to be. The Sensex is tumbling faster than Jack and Jill and mutual fund NAVS are in free-fall. Suddenly, infotech stocks are being hammered down and every scheme seems to be bleeding. The top-performing equity fund for the year ended April 27, 2000-Alliance Tax Relief 96-showed a NAV growth rate of 214.67 per cent for the year and a negative 25.04 per cent for the last month. Even well-performing balanced schemes-funds that invest in...

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