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Funds Shun Churn

Value Research Star Ratings was impacted only to an extent by the rising markets’ effect on funds

With markets registering a comprehensive and sustained rally over the month of July, funds too performed well, thereby ensuring that there would be no mass-scale churning on Value Research Star Ratings list, in other words few funds managed to change positions.

Four funds, two each in the debt and equity category left the Value Research ratings family in July. These are LIC MF Floating Rate (ST) and Fidelity Multi-Manager Cash in the debt category and Kotak Global India and Kotak MNC, which got merged with Kotak Opportunities Fund.

On the other hand, six new funds managed to get rated, mostly in the equity fund category. The only entrant in the debt funds category was DWS Cash Opportunities Cash 30-day Plan, which got a 5-star rating after completing 18 months since launch, one of the basis conditions for debt fund ratings.

Meanwhile, out of the five equity funds that entered the ratings system, four of them, namely Baroda Pioneer Growth, Canara Robeco Nifty Index (3-star), Tata Index Sensex A (3-star) and Sahara Tax Gain fulfilled the criteria of having sufficient assets for them to be rated. The fifth equity fund, Tata Equity Management, completed three years, the basic condition for equity funds to be rated.

Interestingly, two funds in this category, Baroda Pioneer Growth and Sahara Tax Gain, both equity funds, got rated after a gap four months. Both the funds had been rated 4-star earlier and after maintaining a consistent track record again, came back into the same slot.

Three equity funds slipped from their earlier elite positions (4- or 5-star rating), a similar story was repeated by the same number of funds in the debt category.

Among the most consistent funds, namely HDFC Sensex Index Plus which has been rated 4- or 5-star since November 2008 and HSBC Equity which has a similar history since November 2007, registered a dip in their ratings, with both being rated 3-star this time around.

ING Optimix Active Debt Multi Manager FoF and Kotak Bond Regular, both debt funds, despite being rated at the higher end since January 2009 and December 2008 respectively, failed to keep up their performances and dipped to a 3-star status.

Meanwhile, some funds performed very well to achieve an elite status. Both Reliance Liquid Treasury – Institutional Plan (Debt) and Sundaram BNP Paribas S.M.I.L.E Regular have, for the first time, received a 5-star rating.

To sum up, with six 5-star rated funds, Reliance Mutual Fund scored the maximum in the 5-star rated fund category. It was followed by ICICI Prudential Mutual Fund and UTI Mutual Fund with 5 funds each. However, when 4- and 5-star rated funds were seen in conjunction, Franklin Templeton Mutual Fund came at the top with 15, followed by HDFC Mutual Fund, Reliance Mutual Fund and UTI Mutual Fund, which had 13 funds each in the elite class. Al in all, 523 funds were rated by Value Research for the month of July.

 

How They Stack Up
Mutual Fund    *    * *    * * *    * * * *    * * * * *
AIG Global Inv   --   --   2   2   1
Baroda Pioneer   --   2   1   1   --
Benchmark   --   1   1   1   1
Birla Sun Life   3   5   21   9   3
Canara Robeco   --   3   4   3   4
DBS Chola   4   3   3   4   --
Deutsche   --   3   6   3   1
DSPBR   2   3   6   4   2
Escorts   1   --   --   1   --
Fidelity   1   2   4   2   --
Fortis   4   2   3   --   4
Franklin Templeton   --   8   15   12   3
HDFC   --   8   14   10   3
HSBC   7   4   6   1   --
ICICI Prudential   2   6   14   7   5
IDFC   1   5   6   2   2
ING   2   1   10   3   1
J M   6   4   --   4   2
Kotak Mahindra   2   3   14   2   --
LIC   4   6   3   1   1
Morgan Stanley   --   1   --   --   --
Principal   1   7   9   4   1
Quantum   --   --   --   2   --
Reliance   1   1   4   7   6
Religare   1   1   4   --   --
Sahara   --   --   1   2   3
SBI   5   14   3   6   2
Sundaram BNP Paribas   1   6   4   4   3
Tata   2   9   10   11   --
Taurus   1   2   1   1   --
UTI Mutual Fund   1   8   14   8   5
Fund Ratings as on July 31, 2009
 

Also Read:
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