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MFs Hit By Banks & Realty Stocks' Crash

RBI actions caused a major fall in both these sectors' stocks, hitting funds exposed to them

The Reserve Bank of India's credit policy announced on Tuesday caused a widespread sell-off in both the banking and real estate stocks.

Sensex closed at 16,353.40, its worst close in almost 6 weeks, a fall of 387.10 points or 2.31 per cent on Tuesday, while BSE Realty index closed down by 6.24 per cent and BSE Bankex fell 3.82 per cent. DLF fell by as much as 6.58 per cent, Unitech by over 7 per cent, while banking stocks like ICICI Bank fell 6.1 per cent, SBI fell 4.45 per cent and HDFC Bank by 1 per cent.

The fall has also affected the mutual funds that have sizeable exposure to both the banking and realty stocks.

While most fund managers have been voicing concern over realty stocks prices, they had been pretty positive about banking stocks.

Tuesday's sell-off has led to some major losses for the investors as is evident from the effect on the net asset values (NAVs) of various schemes.

What is immediately clear is that funds' exposure to realty is quite limited, while their exposure to banking stocks is high.

Out of a universe of 290 funds, just 153 have exposure to realty stocks, the maximum amount being by JM Large Cap at 10.74 and Bharti Axa Tax Advantage at 10.03 per cent.

As far as banking stocks are concerned, out of 290 equity funds, exposure is by 285 funds, with the largest holdings being, understandably, by banking funds like Reliance Banking ETF, UTI Banking Sector, all in excess of 90 per cent.

The losses as such, were pretty hefty as is seen by the change in NAVs from Monday's prices to Tuesday's closing (check tables).

The worst affected (among the funds with exposure to banking stocks) was Reliance Banking Retail with a loss of 4.16 per cent (see: Costly Bank Exposure).

The worst affected (amongst the funds with the biggest exposure to realty stocks) was Magnum MidCap with a 4.11 per cent loss (see: Costly Real Estate Exposure).


Costly Bank Exposure
Funds    Exposure(%)    Loss (%)
Reliance Banking ETF   99.47   -3.69
UTI Banking Sector Reg   93.67   -3.67
Religare Banking   91.60   -3.31
Reliance Banking Retail   81.85   -4.16
Sahara Banking and Financial Services   80.89   -3.63
ICICI Prudential Banking and Financial Services Ret   78.61   -2.46
Sundaram BNP Paribas Financial Services Opp Ret   71.10   -3.64
JM Financial Services Sector   38.39   -3.89
Principal Services Industries   30.97   -2.60
Kotak Lifestyle   29.55   -2.97
HDFC Infrastructure   29.33   -2.49
Canara Robeco Equity Tax Saver   26.77   -2.53
UTI Services Industries   25.80   -2.40
ICICI Prudential Services Industries   24.27   -1.95
HDFC Index Sensex Plus   22.99   -1.99
Baroda Pioneer Global   22.24   -2.67
HDFC Top 200   22.05   -2.16
IDFC Tax Advantage (ELSS)   21.97   -3.03
UTI India Lifestyle   21.94   -2.40
Franklin India Flexi Cap   21.71   -2.59
Costly Real Estate Exposure
Funds    Exposure(%)    Loss (%)
JM Large Cap   10.74   -2.14
Bharti AXA Tax Advantage Reg   10.03   -3.05
Kotak Lifestyle   9.20   -2.97
Bharti AXA Equity Reg   9.13   -3.34
Magnum Midcap   8.07   -4.11
Sahara Super 20   7.44   -2.28
Morgan Stanley Growth   7.36   -2.32
Kotak Tax Saver   7.19   -3.43
Sahara Star Value   7.17   -3.83
Sundaram BNP Paribas Select Focus Reg   6.57   -3.44
Kotak Contra   6.43   -2.55
Kotak Mid-Cap   6.37   -3.41
IDFC India GDP Growth   6.12   -3.18
Birla Sun Life Infrastructure Plan A   5.58   -2.39
HSBC Tax Saver Equity   5.20   -2.49
Sahara Growth   5.10   -2.57
Birla Sun Life Special Situations   5.09   -3.18
Sahara Infrastructure Fixed Pricing   5.02   -3.73
DBS Chola Contra   4.88   -3.05
Taurus Infrastructure   4.78   -3.93
As on 30/09/2009