Change in fortune for petro funds

Funds gave returns of 1.97% last week to top the equity category.

The tables were turned last week as petroleum sector funds made a surge to the top as far as equity fund performances were concerned. Petroleum sector funds were languishing at the bottom of the pile for much of the past couple of months.

However, a surge in leading stocks in the oil & gas sector last week provided a fillip to the petro sector fund returns.

These funds gave a return of 1.97 per cent last week to top the equity category. In comparison, their previous week returns were in the red at - 1.71 per cent. This reversal in fortunes was due to the gains in stocks such as ONGC and Reliance Industries.

While ONGC gained 5.28 per cent last week to close at Rs 1,001.10, Reliance Industries appreciated 0.26 per cent to Rs 705.55.

The two funds in the category, JM Basic Fund and UTI Growth Sector Fund - Petro have a high exposure to these two stocks.

While the former has Reliance Industries as its top holding with 10.89 per cent exposure, the fund has a near seven per cent exposure to ONGC. UTI Growth Sector Fund - Petro also has ONGC (18.83 per cent) and Reliance Industries (14.81 per cent) as its top two holdings.

Following petro funds, pharma sector funds gained the maximum last week.

These funds returned 1.69 per cent for the week. Last week's toppers-FMCG funds ended up at the bottom of the table along with banking sector funds. However, on a 12-month basis, FMCG funds continued to be toppers.

The average fund return in the FMCG category for the past year amounted to 90.05 per cent, the best in the equity funds category.

FMCG funds have been ruling at the top for quite some time now, as the stocks in the sector gathered momentum. "One of the prime reason for the good performance of the FMCG funds has been that the sector itself has been re-rated in the past year or so," says Prashant Kothari, fund manager of Prudential ICICI FMCG fund, the best performing FMCG sector fund.

"With the average income levels going up, people are willing to spend more on FMCG goods among other things. This has resulted in incremental revenues for these companies, thereby improving their bottomlines also. The valuations also reflect this growth," notes Kothari.

Banking sector funds are the second best performer as far as 12-month returns are concerned. Funds in this category managed an 87.39 per cent return on an average during the period. They were followed by tax planning funds (80.83 per cent) and diversified funds (67.37 per cent).

The performance of debt funds continued to be lacklustre. Monthly income plans (MIP) led the way in the category, thanks to their equity exposure. While MIPs returned 11.74 per cent for the past year, they also topped the weekly tables with a return of 0.18 per cent.

In pure debt category, funds with a shorter duration, such as floating rate funds performed better than others.