Comparison of Stocks Vs MF Performance

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Dear Friends,

I did a comparison of returns of Blue Chip companies (Sensex Stocks) with the Top 20 Mutual Funds in the similar time horizon (Data collated from Value Research Online).

 Stocks Vs MF Performance over 10 years

There is a perception among investors that they get better returns by investing in Blue Chip Companies over MFs and hence this comparison report. While it’s true that blue chips like Sun Pharma, HDFC Bank, Axis Bank, L&T have given 25% returns, you also have big names like Hindalco, NTPC, Tata Steel, Infosys and Wipro that are languishing. Net-Net the chances that an individual investor would have made more money in Blue Chip companies than by investing in MFs is quite low.

It’s not that I have picked only a set of top performing MFs and presented here. 35 of the 52 MFs in the 10 year horizon have given 20% or more which is phenomenal.  

Unfortunately certain National Distributors and Wealth Management wings of Banks have prescribed exotic funds including NFOs and closed ended funds to gullible investors and have spoiled their experience in Mutual Funds.

I have dabbled with direct stocks and can definitely say that I am an above average investor (Else, I can’t claim to be a Wealth Management Professional). However after going through the merits and demerits of direct stock picking (read my blog which I am attaching once again for your reference) I decided  that I will rely on MFs for wealth creation and maybe stocks for the thrill of investing (though I have completely stopped it now as I have had enough in the past). 

Please remember that I am not saying MFs can always outpace direct equity investing as if you have invested all you money in say Axis Bank or Page Industries, it’s impossible for MFs, that needs to maintain a balance and not take concentrated bets, to beat them. The difference is risk reduction through diversification, convenience, professional management and peace of mind.   

Please feel free to write to me or call me if you have any questions.

<Blog # PenguWIN 1022 – Comparison of Stocks Vs MF Performance>

Category: Mutual Funds, Stocks
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