Year to date (YTD) is a term covering the period between the beginning of the year and the present. Like , 31st July will be 4 months from 1st April 2021. So if an investment product has delivered 14% YTD, this means that it has delivered 14% in this Financial year ( which is almost 4 months)
Why YTD is an important indicator for profit booking ? We all create our returns benchmark on the basis of our investment Risk, like- if we invest in a non risky product, then we benchmark the ROI with a bank FD, and if we invest in a risky product, then we benchmark the ROI with NIFTY or Sensex or other equity indices. When the Risk delivers its reward, then smart investors reap those reward and preserve it in less Riskier products like- Debt or Hybrid funds.
In the table given below, you can see that most of the Risky Equity Fund categories have delivered very high reward in their YTD returns; experts suggest to book profit and reduce your purchase cost of such units :
Note : All months mentioned above are for 2021; and all returns shown above are absolute returns earned in that period, as on 20th July 2021 (category wise ROI)
Key points to note in above Return Chart :
The best YTD ( April to July) is delivered by Small Cap Funds i.e 46.53 % and worst YTD ( April to July) is delivered by International Funds i.e 9.94%
Even the worst YTD ( April to July) is better than Bank FDs 1 year return
Out of the above YTD ( April to July), under each category, April month alone was the main contributor
Although we are still left with some trading days in July, but it seems to end up lower than April months returns
----------------------------------------- Conclusion : Most of the experts are still bullish about Equity, specially Small & Midcap categories, but they recommend to sell partial units to book profit and bring down your actual purchase cost. Invest or switch the booked profits in a good Balanced Advantage or Dynamic Asset Allocation Funds.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme.