Majority of mutual fund equity schemes slide in past month

A majority of mutual fund (MF) equity schemes' categories have underperformed the key stock indices over the past month. With sharp corrections in the broader markets on the back of global as well as domestic jitters in recent times, the performance of equity schemes got impacted.

Equity schemes in the large-cap category have given an average negative return of 5.91%. Those of multi-cap funds stood at 7.14%. Mid-cap and small-cap funds were the worst hit, as category average returns stood at 8.16% and 8.28%, respectively, in negative territory. During this period, the BSE's Sensex was down 5.23%, while the Nifty 50 saw an erosion of 5.87%.

Nearly 30% of the equity assets or Rs 1.5 lakh crore are concentrated in 20 stocks — the most invested. These include HDFC Bank, ICICI Bank, Infosys, Larsen & Toubro, Maruti Suzuki, IndusInd Bank, Reliance Industries, Axis Bank, Tata Motors, Sun Pharmaceutical, Tata Motors and HDFC. Several of these counters have cracked anywhere between five per cent and 14%. Since these stocks have been allocated the most of equity assets, such sharp corrections on individual stocks have taken a toll on several schemes. Large-cap and multi-cap, in particular.

For instance, Infosys, the third most invested company by fund managers, saw its shares cracking about nine per cent, from Rs 1,022 to Rs 929. Automobile majors Maruti Suzuki and Tata Motors were hit the most, losing 12% and 13.6% of their values in the past one month.

It's interesting to note that shares of Tata Motors were among the most bought stocks by fund managers during October. And, it is the most hit among the top holdings thus far this month. Among the category of schemes which were least hit in the equity segment are international equity funds and banking funds. Banking funds emerge as an exception as heavyweight stocks like HDFC Bank, State Bank of India Bank of Baroda and ICICI Bank showed resilience during the current phase of correction.