ICICI Prudential Services Industries Fund One Of The Top Diversified Funds

The BSE-Sensex posted returns of 43.4% in the month of July 2007 (as on 16 July 2007). Out of 135 growth Diversified equity funds only 83 schemes outperformed the benchmark index. The average returns at 48.2%, posted by the funds outperformed the BSE-Sensex.
JM Basic Fund topped the Diversified category, posting 89.5% one-year returns as on 16 July 2007. The scheme was incepted in June 1997 and has a corpus of Rs 150.63 crore as on 30 June 2007. It was followed by Stan Chart Premier Equity Fund, which posted 85.0% one-year returns.

However ICICI Prudential Services Industries Fund is gaining investor confidence as it has a low risk and high return profile. The scheme posted 82.1% one-year returns. HDFC Equity Fund with the highest corpus recorded 49.5% one year returns.

The chart give you a snapshot of how the mid cap mutual schemes have performed on the risk return parameters in the past. We have used the bubble analysis method to measure their performances on three parameters as risk, return and fund corpus.

The risk is measured by standard deviation, which measures the average deviation of the returns generated by a scheme from its mean returns. We have tried to explain the same with the help of a diagram, which is divided into four quadrants, with each quadrant containing schemes of a particular risk-return profile. The size of the bubble indicates the size of the fund. The schemes in the high-risk high returns quadrant follow a very aggressive approach and deliver high absolute returns compared to the peers albeit at a higher risk.

The schemes in the low-risk high returns quadrant outperform the peer group on the risk-adjusted returns basis as they deliver higher returns compared to the peers without exposing the portfolio to very high risk. The schemes in the low-risk low returns quadrant are not very aggressive and provide lower absolute returns, taking lower risks.

The schemes in the high-risk low returns quadrant underperform the peers on the risk adjusted returns basis as they adopt a high-risk strategy but the returns fail to compensate the risk taken by the fund.