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Equity Funds Lose Steam

All equity funds' categories lost last week. Most of them underperformed their respective benchmarks. Bond funds, though, delivered positive returns

In the week ended March 25, 2005, the 30-stock BSE Sensex plunged 3.84 per cent, while Nifty skidded 4.44 per cent. Under selling pressure, all the counters ended the week in red. The mayhem in the stock markets hit the equity mutual funds as well with all the categories delivering negative returns and most of them underperforming their respective benchmarks.

The three-member FMCG funds' party ended last week. The category had been delivering positive returns and beating the negative return of benchmark BSE FMCG Index for the previous two successive weeks. However last week, the category slipped 3.25 per cent to underperform the negative 1.07 per cent return of the FMCG Index. Among the funds, Prudential ICICI FMCG lost the most at 4.09 per cent.

Top Loser: Banking funds continued their losing streak. The two-fund category plunged a whopping 5.72 per cent but did well to beat the 7.09 per cent loss of benchmark BSE Bankex.

Both petro and auto funds ran out of gas in the week ended March 25, 2005. They skidded 5.49 per cent each.

Scene on the tech and pharma counters was also bad-while the BSE IT Index shed 3.29 per cent, BSE Healthcare Index followed with a loss of 2.84 per cent. Consequently, tech and pharma funds suffered.

The seven-fund category of tech funds lost 3.53 per cent. DSPML Technology.com lost the least at 2.67 per cent, while Prudential ICICI Technology was the top loser of the week-the fund slipped 4.64 per cent.

Pharma funds lost 4.34 per cent.

Diversified and tax-planning funds: Diversified equity funds lost 4.41 per cent. Tax-planning funds too fell 4.64 per cent. Both underperformed their benchmark Sensex.

Top-5 Diversified Funds: LICMF Sensex Advantage (-0.73 per cent), Tata Infrastructure (-2.34 per cent), UTI Brand Value (-2.58 per cent), Principal Dividend Yield (-3.03 per cent) and Cholamandalam Growth (-3.08 per cent).

Bottom-5 Diversified Funds: Sahara Mid-Cap Fund (-7.06 per cent), Sahara Growth (-6.60 per cent), UTI PSU (-6.58 per cent), Canexpo (-6.19 per cent) and Taurus Discovery Stock (-6.19 per cent).

Top-5 Tax-planning Funds: HDFC Taxsaver (-2.24 per cent), UTI Equity Tax Savings (-3.50 per cent), ING Vysya Tax Savings (-3.68 per cent), Birla Equity Plan (-3.74 per cent) and HDFC Long Term Advantage (-3.77 per cent).

Bottom-5 Tax-planning Funds: Libra Taxshield '96 (-6.30 per cent), Prudential ICICI Tax Plan (-5.90 per cent), Principal Tax Savings (-5.25 per cent), Principal Personal Tax Saver Fund (-5 per cent) and Alliance Capital Tax Relief '96 (-4.98 per cent).

Equity-oriented hybrid funds, which normally maintain a 60:40 equity, debt ratio ended the week down 2.77 per cent.

It was a good week for bond funds. Barring MIPs, all the categories delivered positive returns.

Debt medium-term added 0.11 per cent, while Gilt medium and long-term funds gained 0.14 per cent. Debt short-term and floaters gained 0.10 per cent each. Cash funds and gilt short-term funds ended the week up 0.09 and 0.08 per cent, respectively.

MIPs, which maintain a small exposure to equities, though fell 0.62 per cent last week.

How They Fared
Objective  Return
Equity: Tax Planning -4.46
Equity: Diversified -4.41
Equity: Pharma -4.34
Equity: Auto -5.49
Equity: Banking -5.72
Hybrid: Equity-oriented -2.77
Equity: FMCG -3.25
Equity: Technology -3.53
Hybrid: Monthly Income -0.62
Equity: Petroleum -5.49
Debt: Medium-term 0.11
Debt: Short-term 0.10
Debt: Floating Rate 0.10
Debt: Ultra Short-term 0.09
Gilt: Short-term 0.08
Gilt: Medium & Long-term 0.14
BSE Sensex  -3.84
BSE IT Index  -2.71
BSE Healthcare Index  -3.30
BSE FMCG Index  -1.07