It was a profitable week for fund investors as the equity markets continued on their seemingly relentless northward journey. Both the BSE Sensex and S&P CNX Nifty touched record highs during the week; the 100-plus point surge on the last day of the week contributed significantly.

The BSE Sensex posted a weekly gain of 2.08% to close at 7,423 points; while the S&P CNX Nifty ended at 2,266 points (up by 2.39%). For the third week in a row, mid cap stocks dominated proceedings. The CNX Midcap posted a sharp weekly gain of 4.26% and closed at 3,440 points.

Funds from SBI [Get Quote] Mutual Fund occupied the top 3 positions in the weekly toppers list; Magnum Emerging Business (5.10%) emerged the top performer followed by Magnum Multiplier Plus (4.18%). Mid cap majors had a good week at the markets � Magnum Global (3.13%), Franklin Prima (2.85%) and Sundaram Select Midcap (2.75%).

Category leaders HDFC Top 200 (3.08%), HSBC Equity (2.85%) and Franklin India Bluechip (2.28%) pitched in a decent performance as well.

Mid cap funds for some time now have emerged as top performers in the diversified equity funds segment. A number of fund houses have taken the lead and launched flexi cap/mid cap funds in the recent times. Few would dispute the utility of holding mid cap funds in one's portfolio from a diversification perspective or their ability to clock impressive performances.

However it is pertinent for investors to be aware of the inherent risks associated with them before making any investment decision.

Debt fund investors had no reason to complain either as bond yields inched southwards. Bond prices and yields share an inverse relation with falling bond yields translating into higher bond prices and net asset value (NAV) for debt fund investors.

The benchmark 10-year 7.38% 2015 GOI yield closed at 7.15% (July 22, 2005), two basis point below the previous weekly close.

Funds from two fund houses i.e. Tata Mutual Fund and Standard Chartered Mutual Fund dominated the debt funds segment. Tata Income Plus (0.47%) surfaced as this week's top performer; Grindlays Dynamic Bond (0.32%) and Tata Dynamic Bond (0.26%) occupied second and third positions, respectively.

We at Personalfn recently came across a proposal being considered by the EPFO (Employees' Provident Fund Organisation). If implemented, it could completely restrict premature withdrawals from EPF before the contributor (read employee) reaches 58 years of age.

We have on numerous occasions expressed concerns over the manner in which the EPF operates; in our view the implementation of such a clause can only further add to investors' woes.

Balanced funds drew from the surge in both the equity and debt markets. Principal Balanced (3.00%) emerged as the top performing balanced fund. Category leader HDFC Prudence (2.86%) also featured in the weekly toppers list.

For some time now (at the risk of sounding rather monotonous) we have been exhorting investors to invest in line with their risk appetites and not get carried away by occurrences in the market; this week we are joined by the finance minister! Leading business dailies have quoted the finance minister urging investors to exercise caution.

At a time when equity markets look like they could do no wrong and making a quick buck seems very easy, there is a vital need to be cautious.

Investors would do well to curb their enthusiasm and not digress from their investment objectives. Stick to the SIP (systematic investment plan) route for making investments and get invested only for the long-term.

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