Funds got a positive spin from stock market gyrations
02-May-2009 •Research Desk
The month of April saw many positive changes on the stock markets and there were some policy changes from RBI too, which prodded many funds to reach new heights, while others fell from their elite status on the VR mutual funds Ratings Radar.
On the stock markets Sensex gave its best monthly performance in a decade and as a result equity funds too gave their best 5-year monthly performance. Debt funds added to the lustre by giving their second-best monthly performance in the past 12 years.
Equity Funds
Among the positively affected funds was Canara Robeco Equity Diversified Fund which was granted the elite status (4-star) for the first time after entering the ratings family in September 2006. DBS Chola Opportunities Fund received a 5-star status after almost 14 months, having been removed from elite status in February, 2008. It gained 20.36% in April, compared to the 14.11% generated by the category and was among the top 10 performers in the category.
Among the tax planning funds, a similar forward movement was recorded by Canara Robeco Equity Tax Saver Fund, which regained its 5-star position for the first time after more than 8 years. It had been rated 4-star for the past 5 months. With a 17.88% returns in April, it was the second-best performer in the category--which managed a cumulative average return of 13.37%.
However, Magnum Taxgain did not fare so well. It had been rated 5-star for 29 months, but now it has fallen to a 4-star position.
Another equity fund that has logged an above par performance has been Reliance Regular Savings Balanced Fund. It was the best performer in its category with a 17.05% gain as against the average category gain of 11.01%. The fund, which was rated 2-star in March, climbed to a 4-star status for the first time after it got rated in June, 2008.
With banks among the top gainers, Banking BeES which is an index fund tracking CNX Banks Index, moved up from bottom of the ratings chart to the prestigious 5-star rating.
Aside from the driven-by-markets equity funds, there were 2 new equity fund entrants in the ratings family — they completed three years of existence and hence their performance was rated for the first time. These are JM HI FI (1-star) and UTI Contra (2-star).
On the other hand, 3 equity funds were not rated in April: Sahara Mid-Cap Fund, DBS Chola Global Advantage and LICMF Children Fund because their asset size, measured as the average of past 6 months’ average size, was less than Rs. 5 crore.
Debt Funds
This category too had its fair share of ups and downs. Birla Sun Life MIP regained its status as a 4-star fund after having lost the same in January, 2008. Tata Floater, which joined the ratings family in March 2007, got rated as a 5-star fund for the first time. Similarly, Quantum Liquid Fund, rated since October 2007, also moved up to the top of the ratings chart.
Among those who were not able to retain their earlier status are Magnum Gilt ST which lost its elite status and ended up as a 3-star fund after 21 months, Tata Liquid lost its 3 star status after 2 years, Canara Robeco Liquid Retail lost its elite status for the first time after it got rated in July 2003 and Birla Sun Life Short-Term Retail which fell down to a 3-star status from the 4-star position – an elite class status that it had been holding onto for the past 28 months.
On the whole, among the fund houses that are ruling at the top are ICICI Prudential Mutual Fund is with 6 of its funds rated 5-star. It is followed by HDFC Mutual Fund with as many as five of its funds being rated 5-star. However, when 4- and 5-star rated funds were combined, then the picture changes completely and Birla Sun Life Mutual Fund emerges as the leader again this month with 18 of its funds in the elite class. Franklin Templeton Mutual Fund and ICICI Prudential Mutual Fund occupy the second position with 16 funds each in the elite class. Overall, with 6 new additions and an equal number of left-outs, the Value Research Ratings Family closed the month of April with 509 members.
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