Expected Returns

Expected Returns

Your MF data bank is a very useful one. It carries a column 'expected 1 year return'. I noticed that in every issue the value of expected return for almost all ranked funds changes. To take a case, for ABSL Small Cap Fund, the expected return stated in issues 21 to 24, the expected returns are mentioned as 36.14, 35.77, 33.74 and 37.71, respectively. Similarly, for ICICI Prudential Blue Chip Fund, the values are 22.82, 20.84, 17.07 and 14.06, respectively.

Now my question is how can it vary to this extent every fortnight? How are these calculated?

- Alokmay Jana.

Editor Responds :

Thank you for writing to us. The expected one-year return is calculated based on the next one-year expected returns of companies that form a part of mutual fund schemes. Every fortnight the share prices of companies change and some times the percentage change is high. This along with their weightage in the MF schemes determines the final expected returns. Add to it the change in the weightage of stocks every month in the portfolio, which further leads to fluctuation in the expected one-year returns. For further details, you can visit https:// www.dsij.in/mutual-fund.