Those gentlemen who are managing the funds are just being plain lazy. The corpus is too low for them to spend time researching stocks - so they put 25% in ITC & 9% in HUL. That should more or less mirror the returns of BSE FMCG index.

Pharma funds I'm not so sure. Most Indian pharma companies have a large export earnings percentage, and any surprises on that front will hit the bottomline. But if you could find a pharma MF that invests mostly in MNC pharma companies (100% of their revenues would be from the Indian market), then its worth a dekho.

Article on valueresearchonline.com worth a read here

Originally posted by values Article on valueresearchonline.com worth a read here

Thank you for sharing this, values. Very good read.

Originally posted by manish962 Debt funds - especially G-sec or Income funds would be ideal to invest during peaking out of the interest rates. For this you need to track the G-sec movements which is very complex in nature. Unless you have good study of it, there is high risk of ending up with very paltry returns.   I would suggest to wait for atleast 2-3 months before entering into debt funds. You need to have a horizon of 1 to 1.5 years to make any significant returns(7.5 to 9%). I would suggest to invest in FMP of 1year horizon which will give you decent returns of 9 to 9.5% at current high interest rate scenario.

If you feel that interest rates are near their peaks, then the best strategy is to buy bonds or mutual funds holding bonds/G-secs with long maturity periods. You will get a excellent capital appreciation on the bonds when interest rates fall.

Please note that I am not advocating a buy into long maturity bonds, but just enunciatiing the principles behind bond investments. It is really tough to time the interest rate movements. If instead of going down, the intyerest rates move up, then you will have a capital loss instead of capital appreciation.