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Upgrades surpass downgrades in May

While 32 funds were upgraded, 24 were downgraded last month in Value Research Fund Ratings

In May the total number of upgrades surpassed downgrades: altogether 32 schemes got upgraded while 24 funds were downgraded. The ratings of 523 funds remained unchanged.

Below is an update on Value Research Fund Ratings for end-May 2010. Value Research Fund Rating is used as a starting point by Indian investors in their fund selection. This purely quantitative methodology identifies the best funds in the Indian mutual fund universe, giving investors a convenient platform to launch their mutual fund investment voyage, and saving both time and effort.

New Ratings
Whereas only 10 funds had entered the rating regime in April, 17 funds entered the Value Research Ratings family in May. Out of these 17, 16 funds got rated for the first time. A majority of them -- 12 -- belong to the equity diversified category.

ICICI Prudential Sweep Cash, which is a debt ultra short-term fund, was rated 2-star way back in August 2009 after which it got rated next in May 2010.

Canara Robeco Multicap, belonging to the equity diversified category, which got rated for the first time, straightaway jumped into the best category to get a 5-star rating.

Two funds -- UTI Wealth Builder and Sundaram BNP Paribas Select Small Cap ( both equity diversified) -- which were rated for the first time in May secured the elite 4-star rating.

Upgrades
As mentioned earlier altogether 32 schemes got upgraded in May. All these funds got upgraded by 1 point. Among these upgraded funds, six -- ICICI Prudential Discovery, Fortis Dividend Yield, Principal Large Cap, Taurus Infrastructure, Religare Contra and HDFC Balanced which belong to the equity diversified category -- jumped from a 4-star rating in April to a 5-star rating in May.

Around 10 funds migrated to the second best category of ratings (4-star) in May as compared to a 3-star rating in the preceding month. Some of these schemes belong to the debt category such as Reliance Short-term (Debt: Short-term), Kotak Bond Deposit (Debt: Medium-term), Quantum Liquid (Debt: Ultra Short-term).

Upgrades
Funds  May-10  Apr-10  Chg
Tata Floating Rate ST 3 2 1
SBI Short Horizon Debt Ultra ST Ret 3 2 1
Birla Sun Life Short Term Opportunities Ret 2 1 1
HDFC Floating Rate Income ST Wholesale 4 3 1
SBI Short Horizon Debt Ultra ST Inst 3 2 1
DWS Money Plus Inst 2 1 1
Kotak Bond Deposit 4 3 1
Religare Active Income Fund Retail 2 1 1
Reliance Short-term 4 3 1
UTI Short-term Income Regular 3 2 1
Quantum Liquid 4 3 1
Templeton India TMA Inst 3 2 1
ICICI Prudential Discovery 5 4 1
Fortis Dividend Yield 5 4 1
Principal Large Cap 5 4 1
Taurus Infrastructure 5 4 1
Religare Contra 5 4 1
HDFC Capital Builder 4 3 1
Birla Sun Life MNC 4 3 1
L&T Opportunities 4 3 1
Sahara Mid-Cap Fund 4 3 1
Canara Robeco Emerging Equities 3 2 1
IDFC Enterprise Equity Plan A 3 2 1
L&T Hedged Equity 3 2 1
Principal Growth 2 1 1
SBI One India 2 1 1
Kotak Emerging Equity 2 1 1
L&T Tax Saver 2 1 1
Principal GSF Inv 3 2 1
JM Arbitrage Advantage 4 3 1
HDFC Balanced 5 4 1
Birla Sun Life Monthly Income 4 3 1

Downgrades
Altogether 24 schemes got downgraded in May. All these schemes were downgraded by one notch during the month. Six schemes, out of which five belong to the equity diversified category, slipped from the 5-star ratings in April to 4-star ratings in May.

Downgrades
Funds  May-10  Apr-10  Chg
HSBC Ultra Short Term Bond Regular 1 2 -1
Templeton India Ultra Short Bond Inst 3 4 -1
ICICI Prudential Income 3 4 -1
Tata Income 1 2 -1
Religare Short-term Retail 3 4 -1
JM Short-term Reg 2 3 -1
Religare Liquid Inst 2 3 -1
DSPBR Equity 4 5 -1
DSPBR Top 100 Equity Reg 4 5 -1
Sundaram BNP Paribas CAPEX Opp Reg-G 4 5 -1
Sundaram BNP Paribas CAPEX Opp Reg-D 4 5 -1
Sahara Infrastructure Variable Pricing 4 5 -1
Magnum Contra 3 4 -1
DWS Alpha Equity Regular 3 4 -1
Reliance Long Term Equity 3 4 -1
IDFC Classic Equity Plan A 2 3 -1
ICICI Prudential Equity Opportunities Inst 2 3 -1
Principal Pnb Long Term Equity 3Y I 1 2 -1
Kotak Tax Saver 1 2 -1
Magnum Gilt Short-term 3 4 -1
UTI G-Sec Short-term 1 2 -1
ICICI Prudential Eq & Der Inc Optimiser Inst 2 3 -1
DSPBR Balanced 4 5 -1
HSBC MIP Regular 3 4 -1

Fund House Round Up
Altogether 16 funds each of Birla Sun Life and HDFC AMC had 4-5 star rated funds in May. The next in line were ICICI Prudential, Franklin Templeton and Reliance AMC with 13 funds that were rated 4-5 stars.
As for the fund houses with the highest number of rated funds, ICICI Prudential topped the table with 45 rated funds as compared to 42 funds in the preceding month. It was followed by Birla Sun Life with 43 rated funds in May. Franklin Templeton and UTI AMC had 39 and 37 rated funds respectively in May.

How They Stack Up
Fund House 1 2 3 4 5 Total
ICICI Prudential 1 17 14 8 5 45
Birla Sun Life  8 19 12 4 43
Franklin Templeton 2 3 21 10 3 39
UTI Mutual Fund 1 7 17 8 4 37
HDFC  4 15 11 5 35
SBI 3 13 10 5 1 32
Tata 2 7 14 7  30
IDFC 3 5 11 4 1 24
Principal 2 7 9 3 2 23
Kotak Mahindra 3 5 6 8  22
Reliance 1 1 7 8 5 22
DSPBR 4 6 4 5 2 21
Sundaram BNP Paribas  7 7 5 1 20
HSBC 8 4 6 1  19
ING 1 5 8 4 1 19
J M 9 2 3 3 2 19
LIC 6 6 2 3 1 18
Canara Robeco  1 7 5 4 17
Deutsche  4 6 4 1 15
Fortis 4 2  3 5 14
L&T 4 2 5 2 1 14
Religare  3 6 1 2 12
Fidelity 1 3 4 3  11
Sahara   1 5 3 9
AIG Global Inv  1 5 1  7
Benchmark  2  1 2 5
Bharti AXA 1 4    5
JPMorgan 1  1 2 1 5
Taurus 1 1 1 1 1 5
Escorts 1 2   1 4
Baroda Pioneer  1  1  2
Edelweiss  1 1   2
Quantum    1 1 2
Morgan Stanley  1    1