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Impressive, But Not Favoured

Consumer Durable stocks don't seem attractive to fund managers despite their index doing well for two years

From all the indices available by the Bombay Stock Exchange (BSE), the Consumer Durable one (BSE CD) has been the star performer in 2010. As on May 10, 2010, it delivered a return of 21.50 per cent, while year-to-date (YTD) return of the Sensex is actually negative at -0.77 per cent.

This trend is simply a continuation of 2009 where the BSE CD delivered 98 per cent, ahead of Sensex's 81 per cent. Worth noting here is that none of the stocks that comprise the BSE CD are part of the Sensex or the Nifty.

Despite this performance, Consumer Durables is the least preferred sector amongst equity mutual funds. Though it has not been completely ignored either. The allocation of mutual funds to the sector has almost doubled from April 2009 (1.46%) to April 2010 (2.33%), but is still miniscule. If one looks at the portfolios of the category of Equity Diversified Funds as on April 2010, none had an allocation of more than 6 per cent to this sector. In fact, just two funds had an allocation of around 5 per cent. Birla Sun Life India GenNext (5.23%) and JM Multi Strategy (5.04%). Of the total 193 funds in the equity diversified category, 161 do not have any exposure to this sector. There are only six stocks in this sector which the funds have invested in. Three stocks which are part of BSE CD -Rajesh Export, Gitanjali Gems and VIP Industries - do not even figure in the current portfolios of these funds.

The most favoured stock in terms of assets invested in is Titan Industries. Equity diversified funds have invested around Rs 512 crore in this stock. It has not disappointed. The stock has rallied 160 per cent over the past one year ended May 10, 2010. Currently 14 funds hold the stock in their portfolio.

In terms of number of funds, Bajaj Electricals takes the prime slot with 15 funds being invested in it. Definitely a favourite since only three had bought into it in April 2009. The stock has risen 361 per cent over the past one year. In terms of assets invested, the stock is at the second position with an investment worth Rs 163 crore.

Consumer Durables: Fund Favourites
  Apr-10  Apr-09      
  Amount  Funds  Amount  Funds  1-Yr
Company  Invested  Invested  Invested  Invested  Return (%)
Titan Industries  511.82 14 137.26 13 159.8
Bajaj Electricals  163.17 15 6.96 3 361
Blue Star  90.54 8 17.2 5 119.02
Videocon Industries  50.77 2 10.19 1 89.46
Whirlpool of India  0.26 2   458.35
BS Refrigerators (unlisted) 0 1   
* 1-yr return as on May 10, 2010
All data pertains to the equity diversified category. Data for Fidelity, AIG and Edelweiss Mutual Fund are not included