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Equity Funds on Backfoot

The stock markets saw sharp correction last week, resulting into heavy losses for funds. Mid- and small-cap tilted portfolios suffered much more than large-cap funds

Equity fund investors had a tough time last week. The stock markets saw sharp correction, resulting into heavy losses for funds. Mid- and small-cap tilted portfolios suffered much more than large-cap funds. Over the week, all the equity funds categories lost and also underperformed their respective benchmarks.

Debt funds investors had a similar experience. Bonds suffered on back of rise in inflation and high international crude oil prices.

The Leader: Though all equity categories lost, FMCG funds lost the least. The three-member category shed 1.28 per cent to underperform the 2.99 per cent gain of benchmark BSE FMCG Index. Not all FMCG funds lost. Franklin FMCG delivered 0.65 per cent. Prudential ICICI FMCG and Magnum FMCG dipped 1.49 and 3 per cent, respectively.

The Laggards: Pharma funds lost the most last week. The five-fund category skidded 5.88 per cent, more than the 4.33 per cent loss of benchmark BSE Healthcare Index.

Diversified equity and ELSS funds too lost substantially. The two categories shed 4.13 and 5.31 per cent, respectively, to fall way behind the 1.89 per cent loss of benchmark Sensex.

Top-5 diversified equity funds: Reliance Regular Savings Equity (0.02 per cent), GIC Growth Plus II (-0.10 per cent), GIC D'Mat (-0.97 per cent), UTI Index Select Equity (-1.59 per cent), and Sahara Growth (-1.63 per cent).

Bottom-5 diversified equity funds: Taurus Discovery Stock (-9.90 per cent), JM Equity (-8.34 per cent), Escorts Growth (-7.83 per cent), Tata Growth (-7.81 per cent), and Canemerging Equities (-7.35 per cent).

Top-5 tax-planning funds: Sahara Tax Gain (-2.67 per cent), UTI Equity Tax Savings (-2.70 per cent), Franklin India Index Tax (-2.90 per cent), Alliance Capital Tax Relief '96 (-3.73 per cent), and HDFC Taxsaver (-3.85 per cent).

Bottom-5 tax-planning funds: Libra Taxshield '96 (-10 per cent), Canequity-Tax Saver (-9.56 per cent), Tata Tax Saving (-6.97 per cent), BoB ELSS '96 (-6.38 per cent), and Principal Personal Tax Saver (-6.15 per cent).

Among rest of the equity categories, technology funds shed 5.03 per cent to fall short of the 3.18 per cent loss of benchmark BSE IT Index. Auto and banking funds lost an average 4.55 and 3.31 per cent, respectively.

Equity oriented hybrid funds, which normally maintain 60:40 equity, debt ratio, skidded 2.88 per cent last week.

Medium-term debt funds added a marginal 0.04 per cent, while medium and long-term gilt funds lost an average 0.04 per cent. Debt short-term (0.09 per cent), floaters (0.10 per cent), ultra short-term (0.10 per cent) and short-term gilt (0.05 per cent) funds delivered positive returns. MIPs shed an average 0.57 per cent.

How They Fared
Objective  Return
Equity: Tax Planning -5.31
Equity: Diversified -4.13
Equity: Pharma -5.88
Equity: Auto -4.55
Equity: Banking -3.31
Hybrid: Equity-oriented -2.88
Equity: FMCG -1.28
Equity: Technology -5.03
Hybrid: Monthly Income -0.57
Equity: Petroleum -2.54
Debt: Medium-term 0.04
Debt: Short-term 0.09
Debt: Floating Rate 0.10
Debt: Ultra Short-term 0.10
Gilt: Short-term 0.05
Gilt: Medium & Long-term -0.04
Sensex  -1.89
BSE IT  -3.18
BSE HC  -4.33
BSE FMCG  2.99
BSE Bankex  -0.14