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9 New Funds Get 5-Star Tag

The new additions have raised the total in the elite category to 53 funds

Value Research Fund Ratings (risk-adjusted rating) identifies the best funds in the Indian mutual fund universe, giving investors a superlative platform to launch their mutual fund investment voyage, saving both effort and time.

Value Research Fund Rating is a convenient composite measure of both returns and risk. It is purely quantitative and there is no subjective component to the rating system. Each category must have a minimum of 10 funds for it to be rated. A fund with less than Rs 5 crore of average AUM in the past six months will not be eligible for rating.

New Ratings: In total, three funds, one each from Debt Short-term, Debt Ultra Short-term and Equity Diversified categories entered the Value Research rating family. However, AIG Short-Term Retail was the only fund that has been rated for the first time. Sahara Growth and Escorts Liquid, which were excluded from the rating system due to the non-fulfillment of sufficient assets criteria, have now re-entered the family. AIG Short-Term Retail grabbed a 3-star rating while Sahara Growth and Escorts Liquid gained 4-star and 5-star status respectively.

New Rating
         VR Ratings
Fund    Category    31/10/2009
Escorts Liquid   Debt: Ultra Short-term   5
Sahara Growth   Equity: Diversified   4
AIG Short Term Ret   Debt: Short-term   3
 

Upgrades: Around 33 funds got upgraded in October by either one or two notches.

Newly-Crowned 5-Star Funds
Fund    Category
Sahara Mid-Cap Fund   Equity: Diversified
Quantum Long Term Equity   Equity: Diversified
Principal Large Cap   Equity: Diversified
ING Dividend Yield   Equity: Diversified
HDFC MIP Long-term   Hybrid: Monthly Income
HDFC Multiple Yield Plan 2005   Hybrid: Debt-oriented
Fidelity Tax Advantage   Equity: Tax Planning
Tata Dividend Yield   Equity: Diversified
Escorts Liquid   Debt Ultra Short-term
 

Big Upgrades: Under the equity diversified funds category, Tata Dividend Yield jumped from 3-star rating to the best-of-all 5-star position. Nifty Junior BeES gained a 4-star status from its earlier 2-star rating.

Big Upgrade
         VR Rating    
Fund    Category    31/10/2009    30/09/2009
Tata Dividend Yield   Equity: Diversified   5   3
Nifty Junior BeES   Equity: Index   4   2
 

Downgrades: Altogether, 40 funds lost their earlier rankings and were downgraded by one star rating in October. The maximum downgrades were seen in the Equity Diversified category as16 funds lost 1-star from their ratings.

Fund-House Round Up
The fund house with highest number of rated funds was Birla Sun Life (41). It has the highest number of 4-star rated funds (13), but if we combine both 4- and 5-star rated funds, they account for only 39 per cent of the total rated funds of the fund house. On the other hand, Quantum Mutual Fund, which has only two rated funds - Quantum Long-term Equity and Quantum Liquid - are rated 4- and 5-star respectively.

Another fund house that has the second-highest percentage of funds in the elite rating category of 4- and 5-star is Sahara. Of the total seven rated funds, six funds, that is 86 per cent, hold a 4- and 5-star status.

Reliance Mutual Fund, the biggest fund house has the most 5-star rated funds (6) along with ICICI Prudential Mutual Fund.

 

Fund-House Fortunes
     1-Star    2-Star    3-Star    4-Star    5-Star    Total
Birla Sun Life   2   8   15   13   3   41
Franklin Templeton       8   20   9   2   39
UTI Mutual Fund       9   16   6   5   36
HDFC   1   6   14   9   5   35
ICICI Prudential       8   14   5   6   33
Tata   2   7   14   7   1   31
SBI   6   13   4   7       30
Kotak Mahindra   2   3   10   6       21
Principal   1   8   7   3   2   21
Reliance   1   1   8   4   6   20
ING   2   3   9   4   1   19
Sundaram BNP Paribas       7   6   4   1   18
HSBC   8   3   5   2       18
DSPBR   3   3   5   5   1   17
IDFC   1   4   7   3   1   16
J M   6   3   3   2   2   16
LIC   6   4   4       1   15
Canara Robeco       2   3   6   3   14
DBS Chola   4   2   3   5       14
Deutsche       3   5   4   1   13
Fortis   3   2   3   1   4   13
Fidelity   1   2   3   2   1   9
Sahara           1   2   4   7
Religare   1   3   2   1       7
AIG Global Inv       1   4   1       6
Taurus   1   2   1   1       5
Benchmark       1       2   1   4
Baroda Pioneer           2   1       3
Quantum               1   1   2
Escorts   1               1   2
Morgan Stanley       1               1
As of 31/10/2009