Some of my MF investments – An analysis

I am currently in Kuwait and have some more time in my hands than usual. Today being a holiday here, I decided to take stock of some of my MF investments. Am sharing my analysis in the post as I feel it will illustrate some of the points that I have spoken about, regarding investments in MF schemes, over a period of time in my earlier posts.

Let me start by two funds that I have for a very long time. In 2001 I purchased some units of ICICI Technology fund. The level of purchase was at NAV of 3 Rs or so, as the fund was doing very poorly then due to the IT recession of 2000. Some things to note about this investment are as follows:

  • Current NAV of the fund is 33.16. XIRR for the past 14 years has been 24.77 %
  • The XIRR is linked to the low level I bought the fund.
  • People who bought it in the NFO stage at 10 Rs NAV, would have XIRR at only about 10 %
  • This clearly shows the impact of the purchase price on your returns.

Another fund I invested in was ICICI Exports and Other Services in 2005 when it had the NFO. Note below:

  • Purchase NAV was 10 Rs and current value is 48.61.
  • XIRR of the fund over last 10 years has been 17 %.
  • Both the above examples show that over a longish period the growth has been reasonable.

Note also that the sector fund has really done worse than the more general purpose fund. It only appears the sector fund has done better as I had bought it at an NAV of 3 Rs. Such things will really not occur today as the fund managers will be sure to take care that the NAV does not drop to such a low value.

Let us now come to my more recent investments. I had started SIP of 5000 Rs each in 7 funds on October 2013 for 2 years. Most of these are coming to an end now and I wanted to check how they have done.

  • ICICI Focused Bluechip equity fund has given an XIRR of 14.69 % over the last 2 years.
  • Over the last 2 years Nifty has grown by about 34 %.
  • If you had the money, it would obviously have made sense to put it in a few well timed installments rather than doing SIP. When markets fluctuate randomly but with an overall positive bias, SIP tends to lose out more often than not.
  • In the same period ICICI Value Discovery fund has given an XIRR of 30.42 %. This supports my view that well managed multi-cap funds looking for value investments are likely to give superior returns as compared to funds which are essentially investing in large cap stocks.
  • DSP BR Micro cap fund has given an XIRR of greater than 35 %. This again goes on to show that you must embrace small cap funds as part of your portfolio, not shy away from them thinking that they will be volatile. Yes, volatility is a fact of life but then so is growth.

Finally let me write about a close ended fund that I had invested in 2014. My idea of doing so was mainly for dividend from it to form a part of my passive income, that I needed to take care of my expenses when I would not be in a regular job.

  • ICICI Prudential Value Fund – Series 3 has given an XIRR of 40.2 % over the last 18 months. This is in addition to the dividends of 45000 Rs that it has paid out. The investment made was 2,00,000 Rs.
  • I think this illustrates the point that not all close ended schemes are bad, it really depends on the context in which you are using it. From my viewpoint this has been a pretty good investment.
  • The relative insulation from the vagaries of redemption and the ability to pick the right stocks for the fund managers seem to have worked well for these stocks.

I have had some lessons from this analysis and most of them are a corroboration of what I thought would happen. From the next month, I will change my investment plan in mutual funds quite a bit.


6 thoughts on “Some of my MF investments – An analysis

  1. Dear Sir, Thanks for your time, but what is the take away for readers from this article. Its generally accepted by every one that the Equity is for long term, which includes Equity MF too, and you have done 2year SIP on Equity SIP and then going to stop it.. Not sure if this is what you suggest other people to follow.. Also what I think is your advise mostly fit it into one specific age group, ideally what I think is whatever approach you suggest in the article should be applicable to all age group, or at-least mention this article is for ABC age category and XYZ can do like this….

    Sorry if you find it too much of criticism.


    • No problem on the criticism Renga but you have not understood it correctly.
      I am not going to stop investing in MF, as you can see my first investment was in 2001. It is just that I will invest in a different way as Standard SIP is not really good in a market with positive bias.
      Second takeaway is that close ended funds can actually be good in the context of some investors.
      Third takeaway is that you need to invest in mid cap and small cap funds for greater returns.


      • Ok, thank you Sir.

        I want to ask you, what to you think of the Indian economy in the near future? I am asking this as I have seen news saying many foreign investors are pulling out their investments from India as they are not seeing much difference, improvement after Modi ji time in the office, and also people started writing things like Modi is loosing his popularity etc… I know you can’t judge but whats your gut feeling..


  2. Next two years should provide opportunities to nibble at direct equity or equity based products for the long term as growth would be hard to come by for sensex/nifty companies. Keep cash handy and wait for significant dips before making any investments


    • Did not get your point. If you think I have any interest in recommending ICICI then you are wrong and should stop making malicious comments without adequate knowledge.
      For your information I invest only in 4 fund houses ICICI, HDFC, Franklin and DSP BR. Any of my examples will only have these names.
      And yes, out of my 7 funds for SIP 4 were from ICICI. Do you have any problems with that?


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