Business Today-Value Research Best Mutual Fund Study 2012 celebrates these successes. As you will read in the following pages, the managers who topped this year have been conservative and believe in value investing.
Overall, the mutual fund industry's assets grew by a respectable 19 per cent in 2012/13. How did that happen? It is because investors are moving their money into safer schemes that invest mostly in fixed-income instruments such as corporate bonds and government securities. What's in store in the year ahead? For the fund managers who want to lure investors into equity schemes, the road is full of obstacles.
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They can't take comfort from history either - not a single equity fund in the past 10 years has beaten the Sensex or the National Stock Exchange's Nifty index on a month-on-month basis.
However, Dhirendra Kumar, CEO of mutual fund tracker Value Research, Business Today's partner in the survey, is optimistic. "Despite all the gloom and doom, there are many underlying positives in the Indian economy and businesses," he says. The Securities and Exchange Board of India has also come out with rules that will benefit the industry. Last October, the capital-markets regulator ordered fund houses to discontinue multiple plans for a single scheme to avoid confusion among investors. It has also asked fund houses to introduce schemes that investors can buy without going to a distributor or broker.
Last year, Business Today and Value Research reworked their methodology of arriving at the Best Mutual Funds rankings to capture better the performance of funds in this changing environment and keep pace with rising investor awareness. Our ranking classifies funds based on investors' appetite for risk, rather than by mere AUM. This takes into account two key points.
One, returns matter more than the amount of money funds handle. And two, since the categories are tailored to risk appetite, there is a better chance of identifying a fund that matches with one's investment philosophy. Sounds interesting? To learn more about the best funds and how they came out on top.