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MFs deliver blistering performance

Fluent gains logged by stock markets was reflected in the great performance by the diversified equity funds in April.

The month of April has thrown up surprise after surprise on many fronts and this is reflected in the performance of mutual funds as well. The performance drivers that pushed the stock market rally were led by small and mid-cap stocks, with realty, banks and consumer goods companies emerging the top gainers.

The effect on the bourses was electric and at the National Stock Exchange, Nifty gained 15 per cent while at the Bombay Stock Exchange, Sensex gained a much higher 17.46 per cent, its best performance in the last 10 years. At the bottom of the equity spectrum was the BSE FMCG Index, which returned 2.89 per cent.

(Check out: All Categories Returns)

Among the equity fund categories, banking funds became the top performing category with a gain of 19.47 per cent, while the BSE Bankex logged a 26.59 per cent rise.

Diversified equity funds posted positive returns for the second consecutive month and logged a 14.12 per cent gain in April, capturing 80 per cent of the returns of Sensex. Index funds gained 16.36 per cent while the tax planning funds went up by 13.37 per cent.

(Check out: Best Performances of Diversified Equity Funds)

However, out of the 221 diversified equity funds, just 27 managed to beat the BSE Sensex, while 77 funds were able to better the broader based S&P CNX Nifty.

The stock market euphoria was also reflected in the fact that 9 diversified equity funds were able to gain in excess of 20 per cent, most of them being mid- and small-cap funds.

The top gainers here were closely bunched and it almost took a photo-finish to find the winner. JM Basic led with a gain of 24.77 per cent, Principal Junior Cap followed closely with a 24.51 per cent and Canara Robeco Emerging Equities finished with a gain of 24.09 per cent.

While none of the diversified equity funds lost, among the lowest gainers were IDFC India GDP Growth (5.59%) and Religare AGILE (5.84%).

Gold ETFs became the only category to post negative returns to the tune of 4.05 per cent — this was the second consecutive month of setbacks for the category.

On the debt fund side, there was some positive surprise, in the second half of this month, for the gilt funds and medium term debt funds. The windfall stemmed from the Reserve Bank of India reducing the key benchmark rates in its annual policy review. The fall in 10-year GOI yield this month was from 7 per cent on 31st March to 6.23 per cent on 29th April while in between it touched a low of 6.09 per cent on 27th April. This got transformed into some major gains for long-term gilt funds and medium-term debt funds. The two categories went on to gain 3.67 per cent and 2.88 per cent respectively.

In the long-term gilt funds category, ICICI Prudential Gilt Investment PF gained 7.89 per cent and Baroda Pioneer Gilt Fund, with a fall of 0.05 per cent found itself on the bottom of the chart.

Among the medium-term debt funds, ICICI Prudential Income Plan with 6.08 per cent was the top gainer while the worst performer, JM Income Fund actually lost 0.41 per cent.

(Check out: Best Performances of Meditum-Term Debt Funds)

On the whole, medium-term debt funds with their second-best performance over the last 12 years and diversified equity funds with their best performance in last 5 years have given the crisis-hit investing community a reason to rejoice.