We have seen a lot of mayhem in the IPO market, where the Reliance Power IPO could not live up to the investors expectations, Wockhardt and Emaar MGF IPO were cancelled. Hundreds of other IPOs were either delayed or cancelled. How about the Mutual Fund NFOs? How have the recently launched NFO performed?
As per a new study, almost 72% of the total 28 Mutual Fund NFOs launched last year with a offer price of Rs. 10 are trading or having their NAV well below Rs. 10, in the price range of 6.7 to 9.7 Rs. Out of the remaining, only 18% are able to trade above the levels of Rs. 10.
The effect are so bad that even if a NFO appears to be a good buy in terms of the value it creates (??), then also the investors are not opting for it, given the high level of market volatility. Not only the actively managed funds, even the funds that were advertised as being backed by quantitative methods, where complex algorithms were used - have performed poorly.
The only exceptions to this trend however; have been the funds investing in gold or gold-related equities. The Gold ETFs (exchange traded funds) which came to the market last year are today trading at all time highs. Similarly with physical gold in great demand, the companies mining the precious metal are undoubtedly the major beneficiaries. And the results are getting reflected in the returns generated by the gold fund. Anyways, it’s only the timing that matters. Gold may be outshining stocks now, but silver is way ahead of gold in terms of pricing. Unfortunately, we do not have any silver based ETF.
| It’s only a matter of time. Which instrument will give what returns in what time is not known by anyone. | Table of Contents |
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