Markets gave a rather tepid response in August this year with the BSE Sensex recording a 0.02 per cent downer. As a consequence, the month also did not witness any drastic changes in the performance of funds, with the Value Research Star Rating system seeing most funds maintain positions.
Nevertheless, there were some movements recorded. Six funds slipped out of the Value Research elite star ratings, namely Magnum Equity (3-star), Kotak Bond Regular (3-star), HDFC Index Sensex Plus (3-star), HSBC Equity (3-star), Kotak Floater LT (3-star) and ING Optimix Active Debt Multi Manager FoFs (3-star).
On the other hand, there were five funds which got into the elite class too. All the five funds got a 4-star rating. These are: Templeton Floating Rate LT Retail, HDFC MIP Long Term, Tata Dividend Yield, ING Dividend Yield and AIG India Treasury Institutional.
Also, at the lower end of the mutual fund universe spectrum, out of the 523 funds rated last time, only 76 funds saw changes in their ratings for the month of August. Two funds, one diversified equity fund and the other, an ultra-short-term debt fund, or liquid fund, were removed from the Value Research Ratings system. They are Principal Junior Cap, rated 3-star and Tata Liquidity Management, rated 1-star in July respectively. While the former got merged with Principal Emerging Bluechip Fund, the latter’s average assets of past 6 months fell below the mandatory minimum of Rs 5 crore.
There were four new additions to the Value Research Rating family. The newcomers were added to these categories: one each in the hybrid equity-oriented, equity diversified, medium-term debt and hybrid equity-oriented. Three out of them managed to secure a 3-star Value Research Rating straight-away – ING Balanced, Reliance Regular Savings Debt Retail and Templeton India Cap Gift plan, while the fourth one, DBS Chola Global Advantage was rated 1-star. All of these funds have been able to garner the qualifying level of assets under management. (At Value Research, we rate only those funds that have their average assets of past 6 months greater than Rs 5 crore).
The only major changes were seen in the liquid plus (institutional) category. While two funds saw a jump of two levels, two others saw a fall in their ratings. While DBS Chola Freedom Income Short Term Institutional (rated 4-star) and Fidelity Ultra Short Term Debt Institutional (rated 3-star) saw upgrades, Templeton India Ultra Short Bond Institutional (rated 2-star) and Templeton India Ultra Short Bond Super Institutional were downgraded. Both the downgrades meant that the funds, sub-options under one fund, have lost their elite status. They got rated in June 2009 for the first time.
All in all, Reliance MF had the maximum, 7 funds that were rated 5-star, followed by UTI MF and ICICI Pru MF, both with 6 funds. However, if both 4- and 5-star funds were combined, Birla Sun Life MF and Franklin Templeton MF with 14 funds each were on the top, followed by UTI MF which had 13 such funds.
Value Research Star Ratings