FMCG and index funds were least affected, while pharma and tax planning funds fared the worst. |
The meltdown in equity markets last week impacted equity fund returns. All equity fund categories ended the week with negative returns. |
|
FMCG and index funds were the least affected, while pharma and tax planning funds brought up the rear. Even the monthly income plans (MIPs) which were in good stead recently, revealed its downside last week, as MIP category returns slipped into the negative territory. In stark contrast to the performance of equity funds, most debt fund categories, long-term gilt funds, ended the week in positive territory. |
|
The performance of equity funds are in stark contrast to their performance in the pervious week, when all except pharma sector funds managed to stay in positive territory. |
|
FMCG funds (-1.28 per cent) came off the best in comparison with others, followed by the previous week's best performers, index funds (-2.50 per cent). |
|
Petroleum and banking sector funds were the next best performers. The largest equity fund category, diversified funds, managed -4.13 per cent. In comparison, the benchmark Sensex declined only 1.89 per cent whereas the downsides in Nifty amounted to 2.92 per cent. |
|
Tax planning funds, which had given a return of 2.42 per cent the previous week, could manage only -5.31 per cent last week. Pharma funds continued to be in the negative territory with a return of -5.88 per cent. |
|
FMCG funds continued to rule the roost with an 86.92 per cent annual return, followed by banking (73.87 per cent) and tax planning (68.81 per cent) funds. Diversified funds posted 58.79 per cent for the year, while petroleum funds came in last with 21.55 per cent. |
|
According to fund managers, the short-term outlook on equities is cloudy. "We are holding a bit more cash at the moment, keeping in mind the volatility," says a domestic fund manager. |
|
"Nobody can say what will happen in the next 3-6 month period. But long-term outlook on equities remain positive. We expect a 16-17 per cent earnings growth in FY06 and 12-13 per cent in FY07. Investor expectation from equity funds should be around 12-13 per cent going forward," he adds. |
|
In the debt category, MIPs which had ridden piggyback on equities came a cropper last week. The category average amounted to -0.57 per cent for the week, a far cry from the 0.55 per cent returns of the previous week. |
|
Short term and floating rate funds with returns of 0.10 per cent each topped the debt fund category. However, MIPs continued to dominate the long-term returns. |
|
For the past one year, the category returned 10.75 per cent, which was more than double that of the next best returns in the debt category. |
|
Short term fund returns for the year amounted to 5.59 per cent, while income fund returns stood at 3.55 per cent. |
|
Long term gilt funds, the only category other than MIPs to post negative returns for the week, was the worst performer in the debt category over the past year and could manage only 3.11 per cent. |
|