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Q1 of '05: Equity Funds Falter

Though most equity funds' categories managed positive returns, they missed their 2004 last quarter returns by a huge margin. Debt funds fared well

After a strong bull run in the last two quarters of 2004, equity markets seem to have lost their way this year. The first quarter of 2005 saw the 30-stock BSE Sensex down 1.66 per cent or 110 points, while Nifty slipped 2.15 per cent or 44 points. Though most equity funds' categories managed to hold on to their grounds and delivered positive returns, they missed their 2004 last quarter returns by a huge margin.

Equity Funds
Top Gainer:
The three-member FMCG funds category gained the most--up an average 5.65 per cent in the first quarter. Among the category funds, Franklin FMCG and Pru ICICI FMCG clocked gains of 8.27 and 8.01 per cent, respectively. Magnum FMCG though could gain 0.67 per cent but beat the benchmark BSE FMCG Index that slipped 0.53 per cent in the first quarter.

Top Loser: Pharma funds seem to have caught a cold. The category ended the first quarter down 10.99 per cent. Within the category, Franklin Pharma lost a whopping 14.47 per cent.

Petro and auto funds were also among the prominent losers--the categories lost an average 7.70 and 3.18 per cent, respectively.

Tax-planning and diversified equity funds also posted positive returns of 1.29 per cent and 0.88 per cent, respectively.

Top-5 Diversified Equity Funds
Funds  Q1 Return
GIC Growth Plus II 13.55
Magnum Emerging Businesses-G 11.73
Magnum Contra 9.60
Magnum Global 9.26
Taurus Starshare 9.08
Bottom-5 Diversified Equity Funds
UTI PSU -5.55
LICMF Equity-G -4.75
Templeton India Growth-G -4.09
UTI Mastershare -3.78
Franklin India Opp-G -3.59
Top-5 ELSS
Magnum Taxgain 15.51
Pru ICICI Tax Plan-G 8.92
HDFC Taxsaver-G 8.13
Tata Tax Saving Fund 3.76
Escorts Tax Plan-G 3.69
Bottom-5 ELSS
Alliance Tax Relief '96 -9.52
Libra Taxshield '96 -5.21
BoB ELSS '96 -3.49
Sahara Tax Gain-G -2.90
Franklin India Index Tax Fund -2.33

Other equity categories posted marginally positive returns. While technology funds gained 2.77 per cent, banking funds ended the quarter up 2.33 per cent. DSPML Technology.com performed well to gain 5.12 per cent.

Debt Funds
Despite a 10 basis points rise in the benchmark 7.38 per cent 2015 bond yield in the first quarter, debt funds did well. Income funds gained 1.23 per cent, while debt short-term funds ended the quarter up 1.29 per cent. Gilt medium and long-term funds gained 1.21 per cent, while gilt short-term funds added 1.29 per cent. Floaters and cash funds generated a return of 1.25 and 1.18 per cent, respectively, while MIPs added 0.75 per cent in the first quarter of 2005.

Fund Categories  Q1 Return
Debt: Floating Rate 1.25
Debt: Medium-term 1.23
Debt: Medium-term Institutional 1.37
Debt: Short-term 1.29
Debt: Short-term Institutional 1.63
Debt: Speciality 1.10
Debt: Ultra Short-term 1.18
Debt: Ultra Short-term Institutional 1.27
Equity: Auto -3.18
Equity: Banking 2.34
Equity: Diversified 0.89
Equity: FMCG 5.65
Equity: Index -1.55
Equity: Other Speciality 2.42
Equity: Petroleum -7.70
Equity: Pharma -10.99
Equity: Tax Planning 1.30
Equity: Technology 2.77
Gilt: Medium & Long-term 1.22
Gilt: Short-term 1.13
Hybrid: Asset Allocation 2.25
Hybrid: Debt-oriented 0.47
Hybrid: Equity-oriented 1.15
Hybrid: Monthly Income 0.75
BSE Sensex  -1.66