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FMCG Funds Ignore Market Volatility

FMCG funds were the only silver lining for the equity funds last week. The category delivered positive returns, while all other funds incurred losses over the week

Equity Funds
It was yet another volatile week for equity markets and funds. Fear that the FIIs might slowdown the inflows and profit booking dragged the markets down. At the end of week, the 30-stock BSE Sensex lost 0.61 per cent.

On the fund side, barring FMCG funds, all the equity funds' categories ended last week in the red.

Petro funds continued their downward march and ended the week at the bottom of the return chart. The two-member category plunged an average 4.56 per cent.

After delivering negative returns for two successive weeks, FMCG funds came back strongly to become the only category that delivered positive return in a highly volatile week. However, the three-fund category underperformed their benchmark by a huge margin. FMCG funds could manage a meagre 0.86 per cent against the 5.51 per cent return of the BSE FMCG Index.

Pharma and technology funds, though lost last week, outperformed their respective benchmarks. Pharma funds lost an average 2.71 per cent as against the 4.59 per cent loss of benchmark the BSE Healthcare Index. Technology funds too shed 0.93 per cent but did better than the 1 per cent loss of benchmark BSE IT Index.

Tax-planning and diversified funds underperformed the negative 0.61 per cent return of their benchmark Sensex. The two categories lost 1.35 and 1.62 per cent, respectively.

Volatility in the stock markets had its negative impact on equity oriented hybrid funds as well, as the category funds generally maintain nearly 60 per cent exposure to equities. The category ended the week down 1.21 per cent.

Bond Funds
MIPs, income funds and gilt medium and long-term funds delivered negative returns last week. Monthly income plans, which have a small exposure to equities, lost 0.26 per cent.

Income funds continued their losing streak. The category ended the week down 0.06 per cent. Gilt medium and long-term funds shed 0.32 per cent. Cash funds (0.09 per cent), debt short-term funds (0.07 per cent), floaters (0.10 per cent) and gilt short-term funds (0.05 per cent) delivered positive returns.

How They Fared
Objective  Return
Equity: Tax Planning -1.35
Equity: Diversified -1.62
Equity: Pharma -2.71
Hybrid: Equity-oriented -1.21
Equity: FMCG 0.86
Equity: Technology -0.93
Hybrid: Monthly Income -0.26
Equity: Petroleum -4.56
Debt: Medium-term -0.06
Debt: Short-term 0.07
Debt: Floating Rate 0.10
Debt: Ultra Short-term 0.09
Gilt: Short-term 0.05
Gilt: Medium & Long-term -0.32
BSE Sensex  -0.61
BSE IT Index  -1.00
BSE Healthcare Index  -4.59
BSE FMCG Index  5.51