Equity schemes strike it rich in 2003

Many plans record over 100% rise in NAVs

It has been a dream run for equity-related schemes in calendar 2003. A number of schemes posted an over 100 per cent rise in net assets values (NAV). It has been a rewarding year for investors too, with several fund houses declaring huge payouts.

The rally in the stock markets last year cut across sectors, with fund managers actively churning their portfolios and booking profits at higher levels.

Mid-cap stocks were also in the limelight. This was in contrast with the bull run in 1999-2000, where the activity was primarily confined to technology counters. The current rally saw the banking story unfold, followed by auto and auto ancillaries, pharma, cement, textiles and so on.

This, according to analysts, is a healthy sign because the rally became more broad-based and spread across several sectors, rather than being limited to a few sectors or the index heavyweights.

For 2003, the BSE Sensex gained 2,461.68 points, or 72.88 per cent, making it one of the best-performing markets in the world. The NSE S&P CNX Nifty gained 820.70 points, or 77.49 per cent in the year.

A host of factors contributed to the strong bull run, including a good monsoon coupled with huge foreign funds on hopes of strong economic and corporate growth.

Franklin India Prima Fund (Growth) saw a 177.75 per cent surge in its NAV in the last 12 months to at Rs 80.27 on December 30, 2003, according to data complied by the mutualfundsindia.com.

Sundaram Select Mid-cap (Growth) saw its net asset value appreciating 160.54 per cent to Rs 26.47. Birla Tax Plan '98's net asset value jumped 159.91 per cent to Rs 77.48. Reliance Growth- (Growth) and Reliance Vision (Growth) funds registered more than 153 per cent rise in NAVs.

Other schemes which registered returns between 100 per cent and 140 per cent included Alliance Basic Industries (Growth), Prudential ICICI Tax Plan (Growth), IL&FS Growth & Value Fund (Growth), HDFC India Top 200 (Growth), Tata Select Equity Fund, Prudential ICICI Power (Growth), Tata Life Science and Technology Fund, SBI Magnum Multiplier '93 and Templeton India Growth Fund (Dividend) funds.

This impressive performance brought in hordes of new investors to mutual funds.

A number mutual funds also floated new schemes with various innovations including Monthly Income Plan with higher exposure to equities, dynamic funds, Variable Income Plans and various income funds.

Says a marketing head with a leading fund-house: "A lot of corporates and high networth investors have parked a large part of the profits made in the debt markets in the last two years into equities and equity funds in 2003".

Industry captains add that retail investors will drive the mutual fund industry forward in the days as the participation has started coming from even from smaller cities and towns across the country.