Diversified funds outperform indices

Mutual funds book profits worth Rs 519.6 crore in February

Diversified mutual funds outperformed benchmark indices in February 2004 through a smart mix of profit booking at higher levels and holding on to growth-oriented stocks.

During the month, mutual funds booked profits worth Rs 519.6 crore. This profit-booking helped the funds beat the indices though all the seven index funds in operation actually underperformed the indices.

Index heavyweights such as Reliance Industries, Wipro, Hindustan Lever, Housing Development Finance Corporation and State Bank of India were market underperformers in the month.

However, ITC, Tata Steel, BHEL and Hindustan Petroleum Corporation bucked the trend. Reliance Energy was a major gainer in February, posting a gain of 38.45 per cent.

Among non-index stocks, Maruti, Oriental Bank of Commerce, i-flex solutions, Cadila Healthcare, and Lupin Laboratories outperformed the indices.

The performance of mutual funds based on their net asset value (NAV) between January 31, 2004, and February 27, 2004, shows that around 64 funds outperformed the indices, while 34 underperformed.

Of the 64 funds, 34 were diversified ones. Only 20 diversified funds underperformed in the overall tally of 92 equity-oriented schemes.

In the same period, the Sensex dipped by 0.49 per cent from 5,695.67 on January 31, 2004, to 5,667.51 on February 27, 2004.

The Nifty, too, slipped 0.52 per cent from 1,809.75 to 1,800.30. The BSE-500 slipped by 0.82 per cent from 2,246.8 to 2,228.41.

Topping the performers' list is the K30 Growth fund, a diversified fund from the Kotak Mahindra stable. Its NAV improved by 5.24 per cent from Rs 23.65 to Rs 24.89 during the period. At the second place was the Tata Equal Opportunities Fund-B which reported a 4.16 per cent gain.

The K30 Growth Fund ruled high on the back of its holding in Maruti which gained 15.74 per cent in February, in BHEL which appreciated 13.29 per cent, and Bharti Tele-Ventures which posted a 5.93 per cent gain.

Other funds in the top 10 gainers' list include Alliance Frontline Equity, Alliance Buy India, ING Growth Portfolio, Sundaram Select Focus - G, Reliance Growth Fund-BO-G, Deutsche Alpha Equity Fund - G and Franklin India Growth.

Speciality fund Canbank Canexpo posted a 4.49 per cent rise in February riding high on two of its holdings in Cadila which posted a gain of 30.73 per cent and Matrix Laboratories, which recorded a 22.26 per cent gain.

Topping the losers' list was the ICICI Tax Plan whose NAV dipped 5.08 per cent from Rs 27.95 to Rs 26.53. This was mainly due to an erosion in the value of its holdings in Eicher (which was down 13.66 per cent), SAIL (down 6.25 per cent) and Trent (down 3.22 per cent).

Other major losers were Alliance New Millennium, an infotech scheme, LICMF Index Fund-Sensex-G, a diversified scheme, UTI Grand Master (diversified), and LICMF Index Fund-Nifty-G (diversified).

Alliance New Millennium's NAV dipped 2.69 per cent from Rs 6.69 to Rs 6.51 and LICMF Index Fund-Sensex-G's NAV slid from Rs 16.86 to Rs 13.62, a 2.58 per cent lose.

UTI Grand Master's NAV slipped from Rs 16.86 to Rs 16.50, a decline of 2.14 per cent. Other schemes from the LICMF stable which witnessed declining NAVs are Index Fund-Nifty (NAV down from Rs 14.11 to Rs 13.81, a loss of 2.13 per cent) and Index Sensex Advantage G (down from Rs 13.81 to Rs 13.54, a loss of 1.96 per cent).

Franklin India Prima also witnessed a 1.84 per cent slide in its NAV during the period.