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Funds Mirror Market Euphoria

Equity funds delivered some of the best returns

The pleasant surprise brought in by the election results led to a euphoric rally in the stocks markets that brought in good gains for the mutual fund investors as well. All equity funds category ended the week in green territory for the week ending May 22, 2009.

The banking sector fund maintained their top position this week as well. The rising hopes of reforms in the sector with the formation of stable government drove BSE Bankex 22.77 per cent higher during the week. As a result, equity- banking category delivered highest gains of 21.67 per cent among all equity funds categories. The best banking fund for the week-Sundaram BNP Paribas Financial Services Opportunities delivered a huge 31.18 per cent.

The second position among the equity funds categories was taken up by auto funds. The equity-auto fund category of only two funds delivered a gain of 18.78 per cent during the week. JM Auto returned 23.54 per cent outperforming BSE Auto by 6.55 per cent while UTI Transport and Logistics lagged behind with 14.02 per cent.

Though equity diversified fund’s category delivered its best ever-weekly gain it was on the third position. Sensex turned in a 14.08 per cent in the week ending May 22, 2009 while outperforming Sensex, an average equity diversified fund returned 17.23 per cent. The top performer in the category during the week- Taurus Infrastructure delivered huge gains 34.73 per cent while 68 per cent fund in the equity-diversified category outperformed Sensex.

Also, the tax planning funds outperformed Sensex with returns of 16.79 per cent, just below the equity diversified funds.

Sector based funds too outperformed their sectoral indices. Equity funds under pharma, technology and FMCG category delivered returns of 9.09 per cent, 5.98 per cent and 4.14 per cent respectively. Where as BSE Healthcare gave returns of 6.84 per cent, BSE IT minus 0.73 per cent and BSE FMCG 1.24 per cent during the one week ending May 22, 2009.

The big gains in the equity markets resulted into the balanced funds category deliver a return of 12.07 per cent.

While on the debt side, the funds that invest in medium and long-term fixed income securities were in the negative zone. Gilt medium &long-term funds that invest in long-term government securities delivered negative return of 0.10 per cent while the funds that invest in all kinds of medium and long-term debt papers classified under debt medium-term category were down by 0.15 per cent. The government went on a borrowing stint last week.  This resulted in yield of benchmark GOI increased from 6.26 per cent on May 18 to 6.47 per cent on May 22, 2009.

The worst performing category for the week was of Gold ETF which gave negative return of 1.98 per cent.

(Check out the Fund Ranking)