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September 7, 2000
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Money > Mutual Funds > Performance Review September 7, 2000 |
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Best and worst funds of AugustAfter the July crash, the debt and equity markets posted a joint -- albeit tentative -- recovery in August. After a spate of successive withdrawals, foreign institutional investors (FIIs) and mutual funds swooped on the equity markets for some cherry picking, particularly at the technology counters. FIIs have been net buyers to the tune of Rs 3 billion. Apart from technology, pharma stocks provided some succour to the harried bulls on the bourses. While the markets may still not offer any definite signs of recovery, the Sensex moved up by 197 points to post a net gain of 4.61 per cent over the last month. The broader market index, Nifty Total return gained 4.64 per cent. It is not surprising that most of the equity funds have gained in August. However, most of the equity funds are still way off their respective highs, posted earlier this year. On a year to date basis, the Sensex has registered a net loss of 10.56 per cent, while the Nifty Total return series has shed 4.94 per cent. Equity-Diversified With the markets posting a net gain in August, the Value Research category of diversified equity funds has bounced back, with the category up 6.57 per cent on an average. With technology stocks being the prime market movers, it is no surprise that funds with tech heavy portfolios have led the pack. UTI Equity Tax Savings Plan-2000, tops the group of 62 diversified equity funds with its gain of 18.33 per cent. ING Growth Portfolio, the infotech fund in disguise, comes a close second with its gain of 18.01 per cent. However, this category still has some losers. Two of the diversified equity funds from Reliance AMC, Reliance Growth and Reliance Vision have lost 4.73 per cent and 3.72 per cent respectively. Zurich India Capital Builder, skewed in favour of FMCG stocks, has shed 1.81 per cent.
Sectoral - IT/Technology With the mercurial technology counters flashing green again in August, the 13 funds in the category of Value Research IT/Technology funds have registered an average gain of 12.44 per cent. The sector has no losers. Magnum IT, with a fifth of its corpus apportioned to Infosys Technologies, has topped this category by gaining a whopping 17.9 per cent in August. IL&FS eCOM, while still hovering below par has emerged a close second, with a gain of 16.99 per cent.
Sectoral - FMCG The FMCG stocks continued to face investor apathy in August and the Value Research category of three FMCG funds lost 0.77 per cent. However, the surprise was Magnum FMCG, which bucked the category's falling trend to post a gain of 2.75 per cent. Kothari Pioneer FMCG fund lost 2.77 per cent.
Sectoral - Pharma Leading pharma stocks were also in great demand on the bourses in August and have helped the three fund pharma Value Research category gain an average 4.04 per cent. All the three funds have gained, and thus managed to cross the par value. Kothari Pioneer Pharma has been the biggest gainer with a return of 5.41 per cent in August.
Equity - Speciality The Value Research category of Speciality funds represents those funds, which are not classifiable into any particular sector or category. These funds invest in an amalgam of sectors and hence are not strictly comparable. This non-homogeneous category posted an average gain of 3.06 per cent with tech-heavy portfolios racing ahead. Tata Life Sciences & Technology, with its predominant allocation to technology stocks, topped the category with a gain of 11.54 per cent. DSPML Opportunities, with its dynamic approach to align with the market trend, has parked 47 per cent of its corpus in technology stocks and gained 10.42 per cent. UTI Brand Value, with a high allocation to FMCG lost the maximum at 8.17 per cent in August.
Balanced funds With both equity and debt markets gaining in August, the net asset value (NAV) of all the funds in the Value Research Balanced fund category, moved up and this 27-fund category posted an average gain of 5.36 per cent. Most of the top gainers are those which have been aggressive with their equity exposure with a tilt to technology stocks. Riding on a 100 per cent equity allocation to IT stocks, ING Balanced galloped ahead with a 12.30 per cent gain in August. US-95, the balanced fund from UTI gained 10 per cent last month.
Debt with marginal equity The Value Research category of debt funds with marginal equity gained 1.51 per cent in August. KP Pension Plan, with its 26 per cent allocation to equity gained the maximum at 3.81 per cent. Templeton MIP, with its marginal equity component and deft management has emerged the topper among monthly income plans with a gain of 1.74 per cent. There are no losers in this category.
Debt markets The shaky rupee was the Pied Piper for debt markets in August, as bond prices closely tracked the currency during the month. The interest rate hike in July failed to stem a slide in the rupee, which came under a sustained pressure, on the back of genuine demand. The central bank, in a final attempt, ordered the exporters to convert their dollar holdings to rupee and conducted repos in the money market to suck out excess liquidity. This, coupled with fresh FII investments, provided some respite to the rupee. With the rupee strengthening against the dollar, the sentiment improved in the debt markets towards the end of August with the Reserve Bank of India scaling down the repo rate. Also, with US rates unlikely to be hiked in the near term, the markets seem to have found some respite. However, with the concerns on inflation and the oil pool lingering, it remains to be seen if the recovery in the debt markets is on for sure. Sustainability apart, the recovery in August has reversed the trend of a consecutive three-month slide in the debt markets. After losing a fraction of the gains posted earlier in the year, the debt markets, represented by I-BEX Total Return series, posted a modest gain of 0.11 per cent in the last month. Debt-Medium term After facing erosion in NAV in July, medium-term debt funds seem to have gained ground in August. The Value Research medium-term debt category comprising 35 funds gained 0.46 per cent in August. The new entrant to the category, IDBI Principal Deposit Bond Fund, emerged the topper with a 1.03 per cent gain in August. Four of the top five gainers are from the IDBI fund family. Tata Income (Quarterly) option was the top loser in this category, with a fall of 1.03 per cent. The half-yearly and monthly dividend options of the same plan have, however, gained in August by 0.71 and 0.43 per cent. Dundee Bond Corporate lost 0.28 per cent in August.
Short-term debt funds With short tern interest rates scaling new heights to invert the yield curve, it was a bonanza for short-term debt funds. The Value Research category of 20 short-term debt funds posted an average gain of 0.88 per cent in August. JM High Liquidity-D is the month's topper with a gain of 1.09 per cent in August 2000. ING Treasury Portfolio comes a close second with a gain of 1.08 per cent. Magnum Instacash Dividend is the sole loser in this category with a negative 0.05 per cent return in August!
Long and medium term gilt funds The Value Research category of 25 long-term gilt funds gained by 0.51 per cent in August. Interest rates and bond prices are inversely related and the impact of tightening of interest rates is felt the most on longer dated securities. This group, which by charter, invests in longer-term securities was the worst affected in the recent turbulent markets. Hence, the marginal gain in August has come as a reprieve for this category. Tata Government Securities Fund (GSF) - Dividend emerged the topper in this league with a gain of 1.34 per cent, while the Growth option gained by 0.76 per cent. Both plans of Zurich India Sovereign Gilt - Provident and Investment occupy the losers slot in August.
Short-term gilt funds Like cash funds, this Value Research category of short-term gilt funds has no losers during August. With short-term interest rates on a tight leash, these funds have also made a killing in the money markets by investing in repos. The eight short-term gilt funds have posted an average gain of 0.64 per cent.
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