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Equity Funds Suffer; Debt on Track

Barring tech funds, all other equity funds' categories reversed their three-week gaining streak in the week ended February 19, 2005

Equity mutual funds reversed their three-week gaining streak to post negative returns in the week ended February 19, 2005. Barring tech funds, all other equity funds' categories disappointed investors. Debt funds, though, ended the week on a positive note.

Equity Funds
Technology funds proved to the only silver lining for equity fund investors. The seven-fund category continued their three-week gaining streak and added 0.96 per cent but underperformed the 1.17 per cent gain of the benchmark BSE IT Index. Kotak Tech (1.71 per cent) and DSPML Technology.com (1.32 per cent), though, beat the benchmark.

Last week's top gainer auto funds slipped in the negative zone this week. The two-fund category lost 2.89 per cent over the week. Petro funds lost heavily--the two-fund category dived 3.16 per cent in the week ended February 19, 2005.

Tax-planning and diversified funds too suffered.

Diversified funds slipped 0.85 per cent to marginally underperform the negative 0.75 per cent return of benchmark BSE Sensex. However, not all of them proved disappointing. Top five gainers of the week, including Alliance Equity (0.96 per cent), Birla Mid cap (0.70 per cent), Alliance Frontline Equity (0.54 per cent), Alliance Basic Industries (0.45 per cent) and Canexpo (0.39 per cent) delivered positive returns.

Last week's top gainer, Taurus Discovery Stock, lost the most this time and shed 3.06 per cent. The top five losers list also include BoB Growth (-2.80 per cent), Magnum Equity (-2.71 per cent), Magnum Multiplier Plus (-2.33 per cent) and Franklin India Opportunities (-2.31 per cent).

Tax-planning funds lost 0.66 per cent over the week but outperformed the benchmark Sensex. Alliance Capital Tax Relief '96 (1.45 per cent), LICMF Tax Plan (0.18 per cent) and Prudential ICICI Tax Plan (017 per cent) were the top three gainers of the week, while Libra Taxshield '96 (-1.87 per cent), Escorts Tax Plan (-1.75 per cent) and Magnum Taxgain (-1.68 per cent) lost the most.

After delivering positive returns for four successive weeks, FMCG funds lost some ground this time. However, the three-fund category did well to guard the losses--they shed an average 0.61 per cent as against the negative 3.96 per cent return of the BSE FMCG Index. Magnum FMCG managed a positive return of 0.44 per cent.

Pharma funds too lost an average 1.27 per cent but outperformed the benchmark BSE Healthcare Index, which ended the week down 2 per cent.

Equity-oriented hybrid funds followed the negative trend and slipped 0.48 per cent.

Bond Funds
Barring MIPs, all bond funds categories managed positive returns for the fourth straight week.

Income funds gained 0.08 per cent, while gilt medium and long-term funds ended flat over the week. Gilt short-term funds (0.11 per cent), floaters (0.10 per cent), cash funds (0.09 per cent) and debt short-term funds (0.10 per cent) also delivered positive returns. MIPs, which maintain a small exposure to equities, lost 0.05 per cent in the week ended February 19, 2005.

How They Fared
Objective  Return
Equity: Tax Planning -0.66
Equity: Diversified -0.85
Equity: Pharma -1.27
Equity: Auto -2.89
Equity: Banking -0.59
Hybrid: Equity-oriented -0.48
Equity: FMCG -0.61
Equity: Technology 0.96
Hybrid: Monthly Income -0.05
Equity: Petroleum -3.16
Debt: Medium-term 0.08
Debt: Short-term 0.10
Debt: Floating Rate 0.10
Debt: Ultra Short-term 0.09
Gilt: Short-term 0.11
Gilt: Medium & Long-term 0.00
BSE Sensex  -0.75
BSE IT Index  1.17
BSE Healthcare Index  -2.00
BSE FMCG Index  -3.96