Monday, April 19, 2010

Weekly Scenario: Poor Market Performance Drags down Equity Funds Return

Equity Funds were not able to maintain their positive momentum as poor market sentiments had spoiled the party during the one week period ended 16 April 2010. 

ULIPS controversy and speculation that RBI will further tighten monetary policy also caused worry for the investors. There were fears that a controversy with regard to unit linked insurance plans (Ulips) will adversely impacts inflows into Ulips which are a major source of inflows into equities. On 9 April 2010, Sebi banned 14 private life insurance companies from raising funds through Ulips without its approval. But on the other hand, debt funds remained a safer avenue for investments during the week as it gained more than equity funds. 

The key market indicator Sensex and Nifty fell 1.91% and 1.85% respectively during the one week period ended 16 April 2010. BSE MidCap and BSE Small-Cap were able to limit their loss to 0.87% and 0.52%. Among the sector indices BSE Infotech gained the maximum of 3.21%, BSE Consumer Durable surged 2.27% and BSE Realty climbed 1.46%. Apart from these sector indices others witnessed loss. In the equity funds, Infotech Funds gained a maximum of 2.78%, FMCG Funds was the next biggest gainer with 0.13%. Profit booking in large cap stocks had dragged the key indices.

In the Debt Fund category Floating Rate Income Funds – Long Term climbed the maximum of 0.11%. It was followed by Short Term Income Funds and Floating Rate Income Funds – Short Term with 0.09% each. Gold ETF gained 0.37% and Arbitrage Fund gained 0.19% during the one week period ended 16 April 2010.

Equity Funds

Pharma Funds

Pharma Funds category average return fell 0.47% for one week period ended 16 April 2010. Out of 4 schemes, only 3 outperformed the category average. UTI Pharma & Healthcare Fund emerged as the top-performer on the return front. The fund posted a growth of 0.73% over the one week period SBI Magnum SFU – Pharma Fund was the worst performer in the category with a fall in return of 0.99% for the one week time period.

Banking Funds

Funds from the Banking Funds category witnessed a fall in average return by 3.03% over the one week period ended 16 April 2010. All the 7 schemes witnessed loss during the one week period. Sahara Banking & Financial Services Fund had a minimum loss of 2.12% while JM Financial Services Sector Fund had a maximum loss of 3.80%.

Tax Savings Funds 

Tax savings mutual funds also known as equity linked savings schemes (ELSS) witnessed a fall in category return by 1.14% over week period as on 16 April 2010. Escorts Tax Plan and Quantum Tax Savings Fund were the 2 schemes to witness surge in NAV while the others faced fall in NAV. Escorts Tax Plan surged by 1.22% and Quantum Tax Savings Fund climbed 0.21%. LICMF Tax Plan and Axis Tax Saver Fund were the worst performers with a fall of 2.16% and 1.97% respectively.

Index Funds

The Index Fund category average return fell by 1.83% for the week end. All the schemes in this category witnessed erosion in NAV. Benchmark S&P CNX 500 Fund and ING Nifty Plus were able to limit their losses to 1.51% and 1.66%.

FMCG Funds 

FMCG Funds category average return is 0.13% for the week end period, which has underperformed the BSE FMCG Sector which gained 0.31% during the week. Franklin FMCG Fund jumped 0.38%, ICICI Pru FMCG Fund climbed 0.32% during the week. While SBI Magnum SFU – FMCG Fund saw erosion in NAV by 0.30%.

Infotech Funds 

Funds from the Infotech Fund category posted an average return of 2.78% over the one week period ended 16 April 2010. The performance of this category has bettered the performance of the previous week. Out of 5 funds, 2 bettered the category average. ICICI Pru Technology Fund surfaced as the best performer in this category. In terms of NAV performance, the fund's NAV grew by 3.57% over the one week period. All the schemes in this category registered positive growth. Birla Sun Life New Millennium Fund was the least performer in this category with 2.04% over one week period ended 16 April 2010.

Infrastructure Funds

The average return of equity infrastructure funds declined by 1.59% over the one week period ended 16 April 2010. The NAV of all the schemes had witnessed erosion. Tata Infrastructure Fund slipped the maximum by 2.45% and Taurus Infrastructure Fund had a lower erosion of NAV by 0.07%.

Midcap Funds

Equity midcap fund category was able to limit their fall to 0.64% for the week ended 16 April 2010. SBI Magnum Midcap Fund is the top performer in this category with 5.11%. It was followed by SBI Magnum SFU - Emerging Businesses Fund, IDFC Premier Equity Fund - Plan A, DSP BR Small And Mid Cap Fund were the once with positive returns of 0.68%, 0.15% and 0.08% respectively. Worst performers in this category were Sundaram BNP Paribas Select Midcap and Sundaram BNP Paribas S.M.I.L.E Fund with a fall in return of 1.89% and 1.33% respectively.

Largecap Funds

Equity large fund category witnessed a loss of 1.47% for the week ended 16 April 2010. Escorts Growth Plan is the top performer in this category with 2.09%. It was followed by Quantum Long-Term Equity Fund with 0.21%. Worst performers in this category were Sahara Growth Fund and SBI BlueChip Fund with a loss of 2.32% and 2.29% returns respectively.
  Exchange Traded Fund (ETFs)

Gold ETFs
Gold ETF category generated an average return of 0.37% during the week ended 16 April 2010. Religare Gold Exchange Traded Fund, Kotak GOLD ETF, UTI-Gold Exchange Traded Fund, Gold BeES witnessed the highest appreciation of NAV by 0.38%.

Other ETFs:

The other ETF category lost 1.88% during the week ended 16 April 2010. Liquid BeES being the only debt ETF gained 0.08%. Bank BeES and Reliance Banking Exchange Traded Fund lost 3.14% and 3.13% respectively to be the worst performers in this category.

Hybrid Funds

Balanced Fund: Equity Oriented
Equity oriented balanced fund category average slipped down 0.88% during the week end period. Escorts Balanced Fund and Benchmark Equity & Derivatives Opportunities Fund were top performers during the week end period with 1.03% and 0.09%. LICMF Unit Linked Insurance Scheme and JM Balanced Fund were the worst performers with a fall of 1.82% and 1.60% respectively. 

Balanced Fund: Debt Oriented
Debt oriented balanced fund category average return dipped 0.06% for the one week ended 16 April 2010. Escorts Opportunities Fund emerged as the top-performer on the return front. The fund posted a growth of 1.54% over the one week period. LICMF Children Fund was the worst performer in the category with a fall in return of 1.21% for the one week time period.

Arbitrage Fund
Arbitrage Fund scaled up 0.19% over one week period ended 16 April 2010. All the schemes in this category posted positive return during the week end period. ICICI Pru Equity & Derivative Income Optimizer emerged as the top-performer on the return front. The fund posted a growth of 1.04% over the one week period. SBI Arbitrage Opportunities Fund was the worst performer in the category with a return of 0.07% for the one week time period.

Debt Funds

Gilt Funds 

Gilt Funds – Short Term category fell 0.01% and Gilt Funds – Medium & Long Term category fell 0.09% during the week. ICICI Pru Gilt Fund - Treasury and UTI G-Sec Fund - STP topped the Gilt Funds – Short Term category with 0.10% and 0.06% respectively. All the schemes under Gilt Funds – Medium & Long Term category witnessed loss in NAV for the one week period.

Income Funds 

The income funds category climbed 0.06% during the week ended 16 April 2010. IDFC SSIF - MTP - Plan A rose up 0.21% and Birla Sun Life Medium Term Plan climbed up 0.14%. It was followed by SBI Magnum Income Fund (0.13%) and Birla Sun Life short Term Opportunities (0.11%) among others. HDFC Income Fund and Tata Income Fund had seen erosion of NAV by 0.15% and 0.10% respectively during the week end period 16 April 2010.

Short Term Income Funds

Short Term Income Funds category average has grown by 0.09% during the week ended 16 April 2010. JPMorgan India Short Term Income Fund climbed up 0.19% and IDFC SSIF - STP scaled up 0.16% among others during the week. SBI Magnum NRI Investment Fund - STP and Bharti AXA Short Term Income Fund ended at the bottom of the category with 0.02% and 0.04%.

Floating Rate Income Funds
Floating Rate Income Funds – Short Term and Long Term category climbed up 0.09% and 0.11% respectively over one week period. Escorts Floating Rate Fund and SBI Magnum Floating Rate Plan-STP were the top performers with 0.10% and 0.09% respectively in Floating Rate Income Funds – Short Term. ICICI Pru Long Term Floating Rate Plan C and ICICI Pru Long Term Floating Rate Plan B were the top performers with 0.19% and 0.17% in Floating Rate Income Funds – Long Term.

Ultra Short Term Fund & Liquid Fund

Ultra Short Term Fund & Liquid Fund categories climbed up 0.08% each during the one week period ended 16 April 2010. JM Money Manager Fund - Super Plus Plan and DWS Treasury Fund - Investment Plan scaled up the maximum of 0.12% under Ultra Short Term Fund. Birla Sun Life Floating Rate - Short Term scaled up the maximum of 0.16% under Liquid Funds.