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Equity Funds Beat Sensex In 2009

Equity diversified funds have powered to a market-beating performance in the year that just ended

The year 2009 saw the markets post surprisingly good results from what was forecasted at the beginning of the year. The first two months justified the pessimistic outlook, but starting March 9, 2009, the markets caught fire and stayed that way almost throughout the year. The equity mutual fund universe not just tracked the market triumph, but actually beat them. 

As of December 31, 2009, diversified equity funds are up by as much as 84.48 per cent, which is better than the gain logged by Sensex at 81.03 per cent – the reason may well be their mid- and small-cap allocations that helped them race past the Sensex. Looking at both, it is clear that whoever wrote off equity for 2009 was wrong. Also, anyone who followed that advise and started loading on debt saw the category struggling.

But the best-performing fund category was  technology, which gained 115.88 per cent in the year.

Among the other indices, BSE Metal and BSE Auto indices were the top performers for 2009 as they posted 233.68 per cent and 204.16 per cent returns.

Equity Diversified

For the whole of 2009 (1-year), this category posted 84.48 per cent returns. Even its December performance was better than Sensex at 4.25 per cent, though this was a dip from its November returns of 6.33 per cent. 

In the category, the best-performing fund (1-year) was Principle Emerging Bluechip, which posted a gain of 147.30 per cent.

The positive terrain was maintained by the category two months in a row, as out of a total of 254 equity diversified funds, none gave negative returns in December, mirroring the performance in November. 

The best-performer for December was Canara Robeco Emerging Equities Fund, which posted a 10.36 per cent gain. The worst-performer was Kotak Lifestyle, which posted minimal return of 0.32 per cent. 

The biggest fund in this category, Reliance Growth, was not able to translate size into a No. 1 performance. It witnessed a dip from its November returns of 7.71 per cent to post 5.44 per cent in December. 

Tax Planning

The second-biggest equity fund category too managed to beat Sensex with a 1-year return of 81.79 per cent, helping investors add to their money substantially, not just as tax-savers, but also as income generators on that sum.

In December, the category posted a return of 4.19 per cent, in comparison to 6.73 per cent in November. 

The best-performing fund in this category as per its one year return was ICICI Prudential Tax Plan, which posted a 112 per cent return. 

Reliance Tax Saver and ICICI Prudential Tax Plan posted highest returns in the month with 7.19 per cent and 7.17 per cent respectively. HSBC Tax Saver Equity posted the lowest returns for the month with 2.84 per cent. 

The biggest fund in this category, Magnum Taxgain posted a 4.05 per cent returns, which was a dip in comparison to 7.20 per cent in November. As far as 1-year returns were concerned, the fund posted 86.4 per cent.


The 1-year return posted by this category was however, a robust 75.84 per cent. But the category posted a meagre 2.77 per cent return in December, which was a dip from its November figures at 6.47 per cent.

The best-performing fund in 2009 in this category was Nifty Junior BeEs, which posted 122.69 per cent return. 

In December, out of a total of 28 funds in this category, four funds – PSU Bank BeEs, Kotak PSU Bank ETF, Reliance Banking ETF and Banking BeEs – posted negative returns at 0.30 per cent, 0.30 per cent, 0.24 per cent and 0.24 per cent respectively. Shariah BeEs posted the maximum returns at 4.73 per cent. 


Equity Technology category’s 1-year return stood at a fine 115.88 per cent. It also was the star of the month yet again, clocking the highest return at 8.31 per cent, which was a gain if one compares it to its November increase of 7.68 per cent. 

Among the five funds in this category, none posted negative returns. Birla Sun Life New Millennium and ICICI Prudential Technology were amongst the best-performers, clocking 9.57 per cent returns and 9.47 per cent returns. 

The second-best performer among sectoral funds is Equity Pharma, which posted a 7.68 per cent return. But, Reliance Pharma posted the maximum returns in December at 12.16 per cent.

Banking category made negative returns at 0.50 per cent for December. 


This category posted a 3.35 per cent return in December, which was a further dip from November when it had posted 5.1 per cent. Its 1-year return stood at 57.06 per cent. 

HDFC Prudence  was the best-performing fund in 2009 as it posted 84.84 per cent returns (1-year). 


In December, the category of arbitrage funds hardly gained anything in the month. In November, the category posted 0.16 per cent returns. Out of a total of 21 funds, six posted negative returns. The best performing fund, ICICI Prudential Blended Plan B, posted 0.35 per cent return.

The 1-year return of this category stood at 4.29 per cent. JP Morgan India Alpha was the best-performing fund in 2009 after it posted 6.5 per cent returns (1-year). 

Kotak Equity Arbitrage's 1-month return is 0.16 per cent and its 1-year return is 5.15 per cent.

A Powerful Performance
     Returns (%)    
Category/Benchmarks    1-Month    2009
Equity: Technology   8.31   115.88
Equity: Pharma   7.68   95.91
Equity: Diversified   4.25   84.48
Equity: Tax Planning   4.19   81.79
Hybrid: Equity-oriented   3.35   57.06
Equity: Index   2.77   75.84
Equity: Speciality   2.76   60.67
Hybrid: Asset Allocation   1.85   46.15
Equity: FMCG   0.81   63.77
Hybrid: Arbitrage   0.00   4.29
Equity: Banking   -0.50   74.48
BSE IT Index    9.02    132.78
BSE Power    7.02    74.30
BSE Metal    6.80    233.68
BSE Auto    5.97    204.16
BSE Bankex    -0.12    83.90
BSE FMCG Index    -2.80    40.46
As on December 31, 2009