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Equity Funds Bounce Back

Equity mutual funds gained on back of a surge in the equity markets. All debt funds' categories too delivered positive returns

In the week ended April 1, 2005, the 30-stock BSE Sensex bounced back 2.52 per cent, while Nifty rose 2.59 per cent. Equity mutual funds responded positively to the surge, with all of them delivering positive returns and majority beating their respective benchmarks. All debt funds' categories also ended the week on a positive note.

The Leader:
Technology funds surged last week. The seven-fund category added 4.84 per cent to marginally beat the 4.69 per cent gain of the benchmark BSE IT Index. Magnum IT and Prudential ICICI Technology delivered more than 5 per cent return. Alliance New Millennium gained the least at 3.63 per cent.

The Laggard: Banking funds were the only category that underperformed the benchmark. The two-fund category added 2.93 per cent as against the 3.39 per cent return of the BSE Bankex.

Diversified and tax-planning funds: Diversified equity funds gained 3.60 per cent, while tax-planning funds ended the week up 3.68 per cent. Both beat the 2.52 per cent return of their benchmark Sensex.

Top-5 Diversified Funds: Magnum Emerging Businesses (9.57 per cent), Magnum Contra (7 per cent), Magnum Global (6.67 per cent), Reliance Growth (6.11 per cent), and LICMF Sensex Advantage (6.02 per cent).

Bottom-5 Diversified Funds: BOB Diversified (0.67 per cent), FT India Life Stage FoF 20s (0.93 per cent), BoB Growth (1.19 per cent), UTI PEF Unit Scheme (1.30 per cent) and GIC D'Mat (1.63 per cent).

Top-5 Tax-planning Funds: Magnum Taxgain (7.90 per cent), Prudential ICICI Tax Plan (5.67 per cent), Libra Taxshield '96 (4.83 per cent), Principal Personal Tax Saver Fund (4.73 per cent), and Principal Tax Savings (4.67 per cent).

Bottom-5 Tax-planning Funds: Canequity-Tax Saver (0.67 per cent), BoB ELSS '96 (1.41 per cent), LICMF Tax Plan (2.46 per cent), Franklin India Index Tax (2.55 per cent), and HDFC Long Term Advantage (2.81 per cent).

Pharma and FMCG funds too beat their benchmarks. After delivering negative returns in the previous two weeks, petro funds gained 3.31 per cent last week.

Equity-oriented hybrid funds, which normally maintain a 60:40 equity, debt ratio ended the week up 2.30 per cent.

It was a good week for bond funds with all the categories delivering positive returns.

Debt medium-term and floaters added 0.11 per cent, while gilt medium and long-term funds gained 0.07 per cent. Debt short-term returned 0.13 per cent, while cash funds and gilt short-term funds ended the week up 0.10 and 0.08 per cent, respectively.

MIPs, which maintain a small exposure to equities, gained 0.54 per cent last week.

How They Fared
Objective  Return
Equity: Tax Planning 3.68
Equity: Diversified 3.60
Equity: Pharma 2.50
Equity: Auto 4.28
Equity: Banking 2.93
Hybrid: Equity-oriented 2.30
Equity: FMCG 2.02
Equity: Technology 4.84
Hybrid: Monthly Income 0.54
Equity: Petroleum 3.31
Debt: Medium-term 0.11
Debt: Short-term 0.13
Debt: Floating Rate 0.11
Debt: Ultra Short-term 0.10
Gilt: Short-term 0.08
Gilt: Medium & Long-term 0.07
BSE Sensex  2.52
BSE IT Index  4.69
BSE Healthcare Index  0.01
BSE FMCG Index  1.21