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Funds on Fire

Equity fund investors are having the time of their lives. The markets are touching new heights every other day. Equity funds NAVs are flying too

Equity fund investors are having the time of their lives. The markets are touching new heights every other day. Equity funds NAVs are flying too. Last week, an average diversified equity fund added 3.17 per cent. A rally in the equity markets helped. Overall, all the equity categories delivered positive returns.

On the debt side, though, the problem continues. Bond yields closed flat despite a fall in the international crude oil prices. An unexpected rise in inflation hurt the sentiments.

EQUITY FUNDS
The Leader: Tax-planning funds led the pack of gainers in the week ended September 16, 2005. The category added 3.53 per cent. However, an average ELSS failed to beat the 3.98 per cent gain of their benchmark Sensex. Among the funds, Canequity-Tax Saver returned an exceptional 10.22 per cent, followed by 9.23 per cent gain of Escorts Tax Plan.

The Laggards: Pharma funds gained the least last week. The five-fund category added 1.05 per cent to underperform the 1.59 per cent rise in the benchmark BSE Healthcare index.

Among rest of the equity categories, technology funds surged 2.97 per cent to become the only equity category to beat its benchmark BSE IT index (up 2.13 per cent over the week). Barring Kotak Tech, all other six technology funds outperformed the benchmark returns.

FMCG funds added 2.40 per cent and fell short of the 3.78 per cent return of the BSE FMCG index. Auto and banking funds gained 3.19 and 2.40 per cent, respectively.

Diversified equity funds gained 3.17 per cent. Among the top performers include Canemerging Equities (8.11 per cent), JM Equity (6.48 per cent), Escorts Growth (6 per cent), Prudential ICICI Emerging STAR (5.83 per cent), and HSBC Midcap Equity (5.82 per cent).

Equity oriented hybrid funds, which normally maintain 60:40 equity, debt ratio, rose 2.38 per cent last week.

BOND FUNDS
Medium-term debt funds added 0.14 per cent, while medium and long-term gilt funds managed 0.16 per cent last week. Debt short-term (0.11 per cent), floaters (0.10 per cent), ultra short-term (0.12 per cent) and short-term gilt (0.09 per cent) funds too delivered positive returns. MIPs added an average 0.65 per cent.



How They Fared
Objective  Return
Equity: Tax Planning 3.53
Equity: Diversified 3.17
Equity: Pharma 1.05
Equity: Auto 3.19
Equity: Banking 2.40
Hybrid: Equity-oriented 2.38
Equity: FMCG 2.40
Equity: Technology 2.97
Hybrid: Monthly Income 0.65
Equity: Petroleum 2.77
Debt: Medium-term 0.14
Debt: Short-term 0.11
Debt: Floating Rate 0.10
Debt: Ultra Short-term 0.12
Gilt: Short-term 0.09
Gilt: Medium & Long-term 0.16
Sensex  3.98
BSE IT  2.13
BSE HC  1.59
BSE FMCG  3.78
BSE Bankex  4.19