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Sunny Days Ahead

Market seems to be looking up and so does the performance of most funds. The biggest gainers were FMCG funds and the biggest losers were tech funds. Meanwhile, some reduced the frequency of dividend declaration.

After a rough ride in May, stock markets seem to be turning around, as was evident on Monday with investors returning to the bourses. Naturally, the funds were up too. With war looking like a distant reality, the BSE Sensex gained 93 points over the week while equity-diversified funds on average were up 2.06%. The newsmaker this week was index heavyweight Telco reported a turnaround with a positive earning of Rs 162 crore for the quarter-ended March 31, 2002. While it figures in 24 of the 51 equity-diversified fund portfolios, it's among the top 10 holdings of 8 equity-diversified funds. As for tech funds, they continued their downward journey. However, the surprise of the pack this week was FMCG funds, which were the biggest gainers, registering a 2.18% return. The reason: FMCG major, Hindustan Lever, gained substantially on the hopes that the launch of a new ayurvedic brand would further improve its bottomline. The scrip moved up from Rs 184.85 to close the week at Rs 199.70. While the company figures among the top holdings of the three FMCG funds, as many as 20 equity-diversified funds have HLL in their kitty. Finally, as for debt funds, an average bond fund was up 0.09%, but an average gilt fund was down 0.34%. This was about the movement this week.

In view of the Budget 2002 announcement of taxing dividends from mutual funds in the hands of investors, dividend declaration of Birla Income Plus and all plans of Birla Gilt Plus has been changed from quarterly to half-yearly. IL&FS Mutual Fund too has decided to give dividends on a quarterly basis for the Daily Dividend option and the Monthly Dividend option of its Liquid Account and the Short-Term Plan of IL&FS Bond Fund. Also, the record date for all the foregoing plans/options shall be 15th of each quarter (i.e. quarter-ending September, December, March and June). In the wake of these changes, the Monthly Dividend plan of IL&FS Liquid Account shall be merged with its Daily Dividend Plan, and which shall be referred to as 'Dividend Plan'. Hence, IL&FS Liquid Account from now on will offer two plans: growth and dividend Plan.

Fund Update: During the week, the Sensex gained 93 points while the broad based BSE National Index gained about 34 points. The key gainers among the open-end equity funds were Reliance Vision (5.91%), Escorts Tax Plan (5.30%), Reliance Growth (4.94%) and Bonanza Exclusive (4.00%). The major losers were Magnum IT (-2.14%), Birla IT (-2.10%). Pioneer ITI Infotech (-1.97%) and IL&FS eCOM Fund (-1.64%).