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Market Correction Hits Funds

Equity funds suffered on back of a correction in the stock markets last week. However, most of the categories lost less than their respective benchmarks

Equity funds suffered on back of a correction in the stock markets last week. However, they did not lose as much. Most of the categories managed to outperform their respective benchmarks. High crude oil prices troubled bond investors last week. Consequently, bond funds saw a dull week.


The Leader:
FMCG funds staged a strong comeback. After a 0.23 per cent loss in the previous week, the three-fund category gained 0.61 per cent to outperform the 0.11 per cent return of the benchmark BSE FMCG Index. Prudential ICICI FMCG added 1.86 per cent, followed by 0.62 per cent return of Franklin FMCG. Magnum FMCG though lost 0.65 per cent over the week.

The Laggards: Banking funds' woes continued last week as well. The two-fund category was down 2.53 per cent, but less than the 2.94 per cent loss of the benchmark BSE Bankex.

Diversified and tax-planning funds: Diversified equity funds lost an average 0.68 per cent, while tax-planning funds slipped 0.74 per cent last week. Both beat the 1.29 per cent slide in the benchmark Sensex.

Top-5 diversified equity funds: Taurus Starshare (1.69 per cent), Taurus Discovery Stock (1.43 per cent), Magnum Multiplier Plus (0.93 per cent), Bonanza Exclusive Growth (0.33 per cent), and Tata Midcap (0.33 per cent).

Bottom-5 diversified equity funds: BoB Growth (-2.19 per cent), Templeton India Growth (-2.15 per cent), Chola Midcap Fund (-2.03 per cent), Birla Dividend Yield Plus (-2.03 per cent), and UTI PSU (-1.87 per cent).

Top-5 tax-planning funds: Canequity-Tax Saver (0.78 per cent), Libra Taxshield '96 (0.00 per cent), Franklin India Taxshield (-0.08 per cent), UTI Equity Tax Savings (-0.22 per cent), and Principal Personal Tax Saver (-0.29 per cent).

Bottom-5 tax-planning funds: HDFC Taxsaver (-1.98 per cent), HDFC Long Term Advantage (-1.74 per cent), BoB ELSS '96 (-1.53 per cent), Magnum Taxgain (-1.33 per cent), and Sundaram Taxsaver (-1.17 per cent).

Among rest of the equity categories, pharma funds skidded 0.68 per cent to beat the 1 per cent loss of the benchmark BSE Healthcare index. Auto funds gained an average 0.01 per cent. Technology funds slipped an average 0.56 per cent.

Equity oriented hybrid funds, which normally maintain 60:40 equity, debt ratio, lost 0.32 per cent last week.


Medium-term debt funds maintained their last week's performance to add 0.08 per cent, while medium and long-term gilt funds managed 0.07 per cent. Debt short-term (0.10 per cent), floaters (0.10 per cent), ultra short-term (0.10 per cent) and short-term gilt (0.07 per cent) funds delivered positive returns. MIPs lost an average 0.03 per cent.

How They Fared
Objective  Return
Equity: Tax Planning -0.74
Equity: Diversified -0.68
Equity: Pharma -0.68
Equity: Auto 0.01
Equity: Banking -2.53
Hybrid: Equity-oriented -0.32
Equity: FMCG 0.61
Equity: Technology -0.56
Hybrid: Monthly Income -0.03
Equity: Petroleum -1.32
Debt: Medium-term 0.08
Debt: Short-term 0.1
Debt: Floating Rate 0.1
Debt: Ultra Short-term 0.1
Gilt: Short-term 0.07
Gilt: Medium & Long-term 0.07
Sensex  -1.29
BSE IT  -0.39
BSE HC  -1
BSE FMCG  0.11