Pharma and floater funds buck last week's trend

Barring pharmaceutical among equity schemes and liquid and floating rate among debt funds all other category of funds gave negative returns for the week ended 13 August, 2004.

The pharma funds topped the weekly average return chart with a return of 1.90 per cent. In comparison, BSE's Healthcare Index ended up 1.98 per cent on week at 2263.38 on last Friday.

"Last week the market was full of uncertainties in terms of global economy, crude prices, inflation concerns. There might have been a shift towards the defensive sector such as pharmaceuticals. Across the board, the pharma stocks performed well last week. This might have resulted into better returns," Sandip Sabarwal, fund manager at SBI Mutual Fund, said.

Among the other sector funds, petroleum sector-dedicated funds took a big hit, giving a weekly negative return of 2.66 per cent.

Funds investing in fast moving consumer goods sector also gave a negative return of 1.33 per cent. Technology funds gave a one-week negative return of 1.15 per cent.

The index funds, which track the broad indices, had a negative weekly return of 2.05 per cent. In comparison, the Sensex closed at 5102.92, down 1.81 per cent from the previous week's close of 5196.99. The NSE Nifty ended at 1598, down 2.16 per cent.

The category of general diversified equity schemes posted a negative one-week return of 1.02 per cent.

For the week ended Friday, equity-oriented balanced funds generated a negative one-week return of 0.69 per cent, while debt-oriented balanced funds showed a weekly negative return of 0.73 per cent.

The asset allocation funds which have the provision to alter the asset allocation to either equity or debt market also fared poorly, giving a one-week negative return of 1.19 per cent. In debt, liquid funds and floaters gave positive returns of 0.09 per cent and 0.08 per cent respectively for the week ended Friday.

The yield on the 7.37 per cent the benchmark 10-year paper surged by 26 basis points to 6.5357 per cent from the previous week's close of 6.2750 per cent, amid concerns over rising global crude oil prices and domestic inflation.

The wholesale price index inflation for the week ended 31 July rose to 7.61 per cent, from 7.51 per cent in the previous week.

The rising yields continued to impact the performance of debt funds at the medium to longer end of the yield curve. The worst hit were the long- and medium-term debt funds, which gave a negative return of 0.67 per cent.

The short-term gilt funds, which invest in shorter duration government securities, did better to post a negative return of just 0.04 per cent.

Monthly income plans, which invest 20-25 per cent of their assets in equities and rest in debt, gave a negative weekly return of 0.43 per cent.