The story of mutual funds in the past 7 months, spanning all equity funds, has been one of supreme growth. After all, all indices in India have almost doubled from their lows reached in March.
The gains have been booked by the mutual funds equity category and happy faces abound, which is in sharp contrast to the global bust-born gloom that had clouded the investment horizon of almost every investor.
But, before sending congratulatory messages to your favourite fund manager, there is one space that has been left uncovered – have they been able to beat the benchmark’s gains against which their fund’s performance could be checked.
Seen from this viewpoint, the answer is no as 184 equity funds failed to beat their benchmarks.
Funds are benchmarked against a stock market index, generally on the Bombay Stock Exchange or the National Stock Exchange. This index is chosen by the asset management company (AMC) to serve as a yardstick against which their performance can be measured. The fund manager of that fund then tries to invest in a manner that would, ideally, give returns that are in excess of what the benchmark is giving. If the index beats him, then the fund is considered to be a laggard. This has happened to the 184 funds that we are talking about.
However, what is noticeable is that most funds have managed to almost keep pace with their index. For instance, even though they have underperformed the index, the top 82 funds have still managed to post gains in excess of 100 per cent, with the top four, Nifty Junior BeES, ING C.U.B., Sundaram BNP Paribas CAPEX Opp Reg-D, and ICICI Prudential Banking & Financial Services Ret. Have posted returns over 140-to-165 per cent – they still got beaten by their respective benchmarks though, CNX Nifty Junior, BSE CG, BSE Bankex! (Check table: Beaten by Benchmarks).
In effect, investors in these funds would have been better off if they had themselves opted to replicate the index during the period.
But while these funds were beaten by their benchmarks, there were others that managed to do much better than their point of reference (benchmark). Some 84 funds did manage to beat the benchmarks, signifying they have done what they set out to do. In fact, the top 12 funds managed gains between 150-to183 per cent, leaving their benchmarks way behind.
Among the top three funds were Taurus Infrastructure, JM Emerging Leaders, and Principal Emerging Bluechip, all of whom managed gains in excess of 173 per cent. (Check table: Beating the Benchmarks).
However, the outperformance by some funds could be due to a higher component of high beta stocks in their portfolio, which are volatile and tend to rise more in rising markets and falling more than the index when markets crash. The index itself would be composed of a high-beta and low-beta stocks, says
Financial Chronicle
.
For investors, the takeaway in this is to track their funds carefully and if found to be underperforming their benchmarks across a sustained period, then they should know the time has come to shift.
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Beaten by Benchmarks
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Scheme Name
|
|
Returns (%)
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|
Index
|
|
Returns (%)
|
|
Nifty Junior BeES
|
|
165.88
|
|
CNX Nifty Junior
|
|
172.02
|
|
ING C.U.B.
|
|
159.51
|
|
CNX Nifty Junior
|
|
172.02
|
|
Sundaram BNP Paribas CAPEX Opp Reg-D
|
|
143.95
|
|
BSE CG
|
|
160.11
|
|
ICICI Prudential Banking and Financial Services Ret
|
|
143.31
|
|
BSE Bankex
|
|
180.52
|
|
Sundaram BNP Paribas CAPEX Opp Reg-G
|
|
138.96
|
|
BSE CG
|
|
160.11
|
|
ICICI Prudential Emerging STAR Inst I
|
|
131.79
|
|
CNX Nifty Junior
|
|
172.02
|
|
UTI Mid Cap
|
|
131.10
|
|
CNX Midcap
|
|
138.22
|
|
JP Morgan India Smaller Companies
|
|
130.65
|
|
CNX Midcap
|
|
138.22
|
|
ICICI Prudential Emerging STAR
|
|
130.11
|
|
CNX Nifty Junior
|
|
172.02
|
|
DSPBR Small and Mid Cap Reg
|
|
129.67
|
|
CNX Midcap
|
|
138.22
|
|
Taurus Discovery
|
|
127.17
|
|
CNX Midcap
|
|
138.22
|
|
ING Midcap
|
|
125.78
|
|
CNX Midcap
|
|
138.22
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|
Tata Midcap
|
|
124.12
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CNX Midcap
|
|
138.22
|
|
HSBC Midcap Equity
|
|
123.83
|
|
BSE Mid Cap
|
|
154.68
|
|
Religare Contra
|
|
122.22
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|
BSE 500
|
|
123.09
|
|
ING Tax Savings
|
|
121.75
|
|
CNX Midcap
|
|
138.22
|
|
Birla Sun Life Basic Industries
|
|
120.91
|
|
BSE 200
|
|
121.09
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|
Templeton India Equity Income
|
|
118.78
|
|
BSE 200
|
|
121.09
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|
Birla Sun Life Equity
|
|
117.68
|
|
BSE 200
|
|
121.09
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|
Reliance Growth Inst
|
|
117.26
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BSE 100
|
|
117.81
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Fortis Future Leaders
|
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117.25
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CNX Midcap
|
|
138.22
|
|
Franklin Infotech
|
|
117.10
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BSE IT Index
|
|
119.35
|
|
Reliance Growth
|
|
117.03
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|
BSE 100
|
|
117.81
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Sahara Tax Gain
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|
116.70
|
|
BSE 200
|
|
121.09
|
|
AIG Infrastructure and Economic Reform Inst
|
|
115.91
|
|
BSE 100
|
|
117.81
|
|
Magnum Equity
|
|
115.76
|
|
BSE 100
|
|
117.81
|
|
AIG Infrastructure and Economic Reform Reg
|
|
115.10
|
|
BSE 100
|
|
117.81
|
|
Principal Personal Tax Saver
|
|
114.97
|
|
BSE 100
|
|
117.81
|
|
Tata Contra
|
|
114.95
|
|
S&P CNX 500
|
|
111.49
|
|
Kotak Mid-Cap
|
|
114.54
|
|
CNX Midcap
|
|
138.22
|
|
IDFC Premier Equity Plan A
|
|
114.42
|
|
BSE 500
|
|
123.09
|
|
UTI Opportunities
|
|
112.96
|
|
BSE 100
|
|
117.81
|
|
Canara Robeco Infrastructure
|
|
112.93
|
|
BSE 100
|
|
117.81
|
|
AIG India Equity Inst
|
|
112.65
|
|
BSE 100
|
|
117.81
|
|
Morgan Stanley Growth
|
|
112.48
|
|
BSE 100
|
|
117.81
|
|
Baroda Pioneer Global
|
|
112.41
|
|
BSE Sensex
|
|
111.16
|
|
Baroda Pioneer ELSS 96
|
|
112.30
|
|
BSE Sensex
|
|
111.16
|
|
AIG India Equity Reg
|
|
111.72
|
|
BSE 100
|
|
117.81
|
|
Baroda Pioneer Growth
|
|
111.51
|
|
BSE Sensex
|
|
111.16
|
|
Taurus Tax Shield
|
|
110.50
|
|
BSE 200
|
|
121.09
|
|
Sundaram BNP Paribas Growth Reg
|
|
110.46
|
|
BSE 200
|
|
121.09
|
|
Birla Sun Life Frontline Equity Plan A
|
|
110.18
|
|
BSE 200
|
|
121.09
|
|
Franklin India Index BSE Sensex
|
|
110.04
|
|
BSE Sensex
|
|
111.16
|
|
UTI Master Index
|
|
110.03
|
|
BSE Sensex
|
|
111.16
|
|
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Returns between 09/03/2009-14/10/2009
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Beating The Benchmarks
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Scheme Name
|
|
Returns (%)
|
|
Index
|
|
Returns (%)
|
|
Taurus Infrastructure
|
|
183.05
|
|
BSE 200
|
|
121.09
|
|
JM Emerging Leaders
|
|
177.13
|
|
BSE 200
|
|
121.09
|
|
Principal Emerging Bluechip
|
|
173.62
|
|
CNX Midcap
|
|
138.22
|
|
Sundaram BNP Paribas S.M.I.L.E. Reg
|
|
165.75
|
|
CNX Midcap
|
|
138.22
|
|
Magnum Emerging Businesses
|
|
161.13
|
|
BSE 500
|
|
123.09
|
|
Sundaram BNP Paribas Select Midcap Reg
|
|
157.13
|
|
BSE Mid Cap
|
|
154.68
|
|
Birla Sun Life Mid Cap Plan A
|
|
155.45
|
|
CNX Midcap
|
|
138.22
|
|
JM Small & Mid-Cap Reg
|
|
153.09
|
|
CNX Midcap
|
|
138.22
|
|
ICICI Prudential Discovery Inst I
|
|
152.57
|
|
S&P CNX Nifty
|
|
98.91
|
|
DBS Chola Midcap
|
|
152.27
|
|
CNX Midcap
|
|
138.22
|
|
Sahara Mid-Cap Fund
|
|
151.70
|
|
CNX Midcap
|
|
138.22
|
|
ICICI Prudential Discovery
|
|
150.65
|
|
S&P CNX Nifty
|
|
98.91
|
|
Canara Robeco Emerging Equities
|
|
149.26
|
|
BSE 200
|
|
121.09
|
|
Tata Service Industries
|
|
147.65
|
|
BSE Sensex
|
|
111.16
|
|
Magnum Global
|
|
145.40
|
|
BSE 100
|
|
117.81
|
|
DBS Chola Opportunities
|
|
143.77
|
|
S&P CNX Nifty
|
|
98.91
|
|
HDFC Equity
|
|
141.47
|
|
S&P CNX 500
|
|
111.49
|
|
Mirae Asset India Opportunities Regular
|
|
137.99
|
|
BSE 200
|
|
121.09
|
|
Magnum IT
|
|
136.60
|
|
BSE IT Index
|
|
119.35
|
|
Birla Sun Life Tax Relief 96
|
|
134.04
|
|
BSE 200
|
|
121.09
|
|
Franklin India High Growth Companies
|
|
133.89
|
|
S&P CNX 500
|
|
111.49
|
|
Reliance Regular Savings Equity
|
|
133.72
|
|
BSE 100
|
|
117.81
|
|
DBS Chola Tax Saver
|
|
133.33
|
|
S&P CNX Nifty
|
|
98.91
|
|
Franklin India Prima
|
|
132.62
|
|
S&P CNX 500
|
|
111.49
|
|
Birla Sun Life India Opportunities
|
|
132.58
|
|
S&P CNX 500
|
|
111.49
|
|
Bharti AXA Tax Advantage Eco
|
|
132.52
|
|
S&P CNX Nifty
|
|
98.91
|
|
ING Contra
|
|
132.38
|
|
BSE 100
|
|
117.81
|
|
Bharti AXA Tax Advantage Reg
|
|
132.19
|
|
S&P CNX Nifty
|
|
98.91
|
|
Tata Life Sciences & Tech
|
|
131.74
|
|
BSE Sensex
|
|
111.16
|
|
HDFC Core & Satellite
|
|
130.92
|
|
BSE 200
|
|
121.09
|
|
Morgan Stanley A.C.E.
|
|
129.16
|
|
BSE 200
|
|
121.09
|
|
Birla Sun Life Infrastructure Plan A
|
|
127.92
|
|
S&P CNX Nifty
|
|
98.91
|
|
Fidelity India Special Situations
|
|
127.34
|
|
BSE 200
|
|
121.09
|
|
Reliance NRI Equity
|
|
126.79
|
|
BSE 200
|
|
121.09
|
|
HDFC Top 200
|
|
126.02
|
|
BSE 200
|
|
121.09
|
|
ICICI Prudential Technology
|
|
125.88
|
|
BSE Teck Index
|
|
84.28
|
|
ICICI Prudential Tax Plan
|
|
125.10
|
|
S&P CNX Nifty
|
|
98.91
|
|
|
|
Returns between 09/03/2009-14/10/2009
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