07 May, 2021

Is There Life After Death?

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

Is There Life After Death?

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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