Create Wealth through MF Select Recommendations

The period of FY23 will be remembered for rising inflation, interest rates, collapsing banks and geopolitical tensions. The year has also highlighted mutual fund investors’ preference for the SIPs route in the equity markets. For FY23 it is interesting to note that the contrarian funds as a category have delivered 5 per cent returns on an average. With this kind of superlative performance, contrarian funds have emerged as the best performing MF category. Value funds with an average return of 1.75 per cent and Small-Cap funds with an average return of 0.35 per cent are featured amongst the best category of funds.

Flexi-cap funds and focused funds with -2.79 per cent and -2.24 per cent returns have been the least impressive in FY23. The Nifty index in the meantime is down by 1.7 per cent in FY23. We can say that FY23 has not been a year that will be remembered fondly by MF investors. However, our recommendations in the mutual funds section of the DSIJ have helped investors create wealth. In our MF select section, for 86 per cent of the time we have outperformed indices in the same period even as 24 out of 28 recommendations have outperformed the broader indices.

An equal investment in our recommendation would have generated alpha of around 7 per cent over Nifty 500 since December 2021 while our recommendations have generated positive return since December 2021 compared to the negative return by Nifty 500. In our cover story in this issue we have discussed about investing in the NPS account and generating a pension of over ₹1 lakh per month. To understand how that is possible, go through the details presented in this article. Our special story highlights the issue of tax planning and the steps one should be careful about while engaged in this activity. 

The article breaks down the tax planning mistakes you should avoid in the upcoming financial year. Also don’t plan for taxes at the year end. Start early for better results. In the current environment where volatility is a given factor, it is important to revisit your investment action plan while focusing on achieving your investment goals. Continue with your MF investments for optimal outcome. There is no need for panic-driven actions which you may regret later. It is best to stay aligned to your SIP strategy and wait for the tide to turn in favour of investors.

Yogesh Supekar
Executive Editor