As has been the case for the past many months, the Value Research Rating Radar witnessed some amount of volatility in January 2009 as well. With the Indian capital markets going through turbulent times thanks to the Satyam fiasco, the fate of the mutual funds was predictably similar.
The performance of the equity diversified category in January was nothing worth writing home about and a majority of the funds in this category didn't fare too well in the Value Research Star Ratings either. The funds with the saddest stories to tell were Sundaram BNP Paribas CAPEX Opportunities Reg's Growth and Dividend plans. These two funds were amongst the month's worst three performers in the equity diversified category. And their poor showing rubbed off on their ratings as well, with both going two steps down the ladder to the 2-star category.
Similar was the case of Banking BeES. The only banking sector fund to be rated put in a miserable performance in January. The fund's returns were down by a whopping (-)11.76 per cent as against its category average of (-)3.78 per cent. In the ratings, the fund went down three steps to the 2-star rating.
Another poor performer was Canara Robeco Nifty Index. The fund was down by 4 per cent as against its benchmark S&P CNX Nifty's loss of 2.85 per cent. This pushed the fund down to 1-star from its 4-stars position in December.
On the flip side, the ratings gainers in the equity category were Morgan Stanley Growth Fund and JM G-Sec Fund Regular. The former got rated for the first time - 3-stars - since being converted into an open-end scheme and the latter got rated - 4-stars - after a gap of six months.
Coming on the debt funds, one of the worst performers was JM Liquid Plus Regular, which came down two steps to the 1-star category. The fund had failed to keep up with its category in January, delivering 0.48 per cent as against the category average of 0.53 per cent.
Tata Short-term Bond Fund also put in a dismal performance. From being the second best in its category in December with returns of 7.49 per cent, the fund fell down to delivering negative returns of 2.59 per cent in January, at a time when its category had gained 0.13 per cent. The fund ended January as a 1-star fund.
The notable gainer amongst the debt funds was LICMF Liquid Plus Fund, which delivered above average returns of 0.71 per cent and moved up three slots to gain the prestigious 5-star rating for the first time.
Amongst the fund houses, ICICI Prudential Mutual Fund came out on top with seven 5-star funds, followed by Birla Sun Life Mutual Fund with five 5-starers. However, when 4-star and 5-star funds were combined, ICICI Prudential Mutual Fund won with sixteen, followed by UTI Mutual Fund with fifteen funds.