Shocker! PPF Beats Mutual Funds Over 5 Years, What Should You Do?

Shocker! PPF Beats Mutual Funds Over 5 Years, What Should You Do?

PPF Beats Mutual Funds

Mutual fund schemes do not perform well in the past five years from FY 2014 to FY 2019. The MF schemes gave only single-digit returns, and some have been unperformed in the last five years. PPF Beats Mutual Funds. The interest rates of PPF have been ranged between 7.5 to 9 percent. After calculating the average return rate, it becomes 8 percent. However, most people surprised when mutual funds received lesser returns than PPF.

Mutual Fund Schemes Return Rates (%)

As of 30 August 2019, the five years average returns of large-cap schemes fallen to 7.79 percent. Moreover, Multi-cap funds decrease to 8.57percent, meanwhile, ELSS funds have average returns of 8.53 percent. However, the pre-tax returns of multi-cap and ELSS stand at higher. Moreover, the Equity fund schemes receive a 10 percent tax from investors who gain more than 1 lakh.

According to the reports, mid-cap and small-cap funds have given a small relaxation to mutual funds. Because of those perform well in MF industry compare to Public Provident Funds (PPF). Mid-cap and Small-cap funds gave an average return of 9.51 and 9.39 percent.

As of July 2014 to July 2019, the asset under management of open-ended equity funds increased from Rs 2.5 trillion to Rs 6.84 trillion. The average growth of AUM between 2009 to 2014 was about 1.5 times. However, Equity funds are under the presence of individual investors.

What should you do?

At present, Equity funds maintained poor credit in the market. The recovery can change the picture dramatically. Investors should stick to their current long-term asset allocation. Because may it will receive positive returns in the coming years. Avoid the temptations to leave or jump at a flat rate.

A stock expert said that all mutual fund schemes could not carry the same return rate. It depends on the fund managers released to the schemes. Some schemes will give up to 14 percent of return rate while a few funds have given only 4 to 5 percent. Moreover, some schemes could carry negative returns.

Disclaimer: This post is just about the news only. It does not give any advice or recommendation. Please consult your investment advisor before making the decision.

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