Indices expected to increase awareness about the performance of mutual funds
CRISIL and AMFI have jointly launched a group of mutual fund performance indices across five categories —equity funds, ELSS, debt funds, money market funds and hybrid funds. These co-branded indices, the first of their kind in the country, represent the performance of various mutual fund categories and enable comparison of these categories with appropriate benchmarks across time frames and market cycles.
By increasing awareness about the performance of mutual funds, the indices will help in bringing greater transparency and boost investor confidence, says the press release.
Ashu Suyash, Chairperson of AMFI Customer Engagement Committee and Chief Executive,
L&T Mutual Fund said “These indices developed by CRISIL will bring in greater transparency and awareness on the benefits of investing in mutual funds and the role they can play in wealth creation over time. Furthermore, these will provide an appropriate benchmark to the investors and the industry at large.”
These indices will be updated on a quarterly basis and will be available on both AMFI and CRISIL websites.
Some key observations that have emerged from the performance analysis of these indices:
· The CRISIL-AMFI Equity Fund Performance Index has given an annualised return of 22% since April 1, 1997, as compared to annualised returns of 12% and 13% by the benchmarks CNX NIFTY and CNX 500, respectively during the same period.
· The CRISIL-AMFI Equity Fund Performance Index has never given a negative return for any five-year period on a daily rolling basis since April 1, 1997.
· The CRISIL-AMFI Money Market Fund Performance Index has consistently outperformed the savings bank rate in the range of 110 to 550 basis points.
· The CRISIL-AMFI Debt Fund Performance Index outperformed fixed deposits (FD) by a significant margin during declining interest rate cycles.
