After offering negative returns in the one-year time frame, banking sector funds are are offering eye-popping 26% returns in three months on the back of signs of economic recovery and expectations of stronger growth.
Is gold losing steam? Many gold mutual fund investors, both existing and prospective ones, are asking this question after gold funds posted negative returns in the three-month period. Gold funds are offering -3.25% returns in three months, -0.42% in one month and -2.22% in one week.
Conservative investors, who traditionally stick to bank deposits to take care of their income needs, have been complaining about lower deposit rates for a while now. However, these investors, mostly retired folks, have overlooked a relatively safer mutual fund category that has given impressive returns.
The top three performers in the small cap category have offered around 35-50% returns in the last one year. Around nine small cap funds have offered double-digit returns in the last one year. After being in the negative territory from March to September, the small cap category seems to be ready to take off.
MNC Funds or mutual fund schemes that invest mostly in multinational companies are gaining currency these days. MNCs are always bankable, especially in the current bleak economic scenario due to the pandemic.
In very simple terms, the fund should provide a fine balance between risk and return. Lower risk than an equity fund and higher return than a debt fund. That makes balanced funds a great product for slightly conservative investors.
Banking sector funds have surprised investors in the last one month. The category has offered 21.38% returns in one month. It is indeed surprising because the banking sector has suffered a lot in the last one year.
Gold surprised market participants in March by moving in tandem with equities, when it was expected to do the opposite. When there is a sharp fall in asset markets, you can only sell what is liquid, profitable and has low impact cost.