5 funds survive crash

The meltdown in equity market on the back of lower industrial growth and the hike in banks' cash reserve ratio, impacted returns of all equity funds, barring five close-ended equity schemes that managed to end the week in positive terrain.

BOB ELSS '97, a close-ended tax-saver fund, registered 2.91 per cent return for the week to Tuesday.

The four close-ended diversified equity schemes, which escaped the market fall, were Standard Chartered Enterprise Equity Fund with 2.5 per cent return, Tata Capital Builder Fund (1.17 per cent), Birla Long Term Advantage Fund (1.01 per cent) and Tata Equity Management (0.83 per cent).

These schemes had relatively high exposure to technology shares, which did not fall much compared with other sectors.

The StanChart fund had 23.82 per cent of its corpus in technology shares while Tata Capital Builder, Birla Advantage and Tata Equity funds invested 13.15 per cent, 11.63 per cent and 18.56 per cent, respectively, in these shares.

After falling by over 3 per cent on Monday on account of the CRR hike, indices again tumbled 3 per cent on Tuesday owing to lower growth data.

The data released by the Central Statistical Organisation on Tuesday showed that the country's industrial production slowed down to 6.2 per cent in October compared with 9.8 per cent a year ago and 11.4 per cent in September, on the back of lower growth in the manufacturing sector.

The Reserve Bank of India's CRR hike is estimated to drain out Rs 13,500 crore from the banking system and also likely to slow down credit growth and impact the overall business and the earnings growth of banks.

In the week to Tuesday, the Sensex and the Nifty declined 6.76 per cent and 7.44 per cent, respectively, pulling down returns of equity funds.

Diversified equity and tax-saving funds registered negative average returns of 7.27 per cent and 7.25 per cent, respectively.

The worst hit open-ended diversified schemes were ABN Amro Equity Fund (-10.34 per cent), LICMF Equity Fund (-9.86 per cent), and JM HI FI Fund (-9.76 per cent). The schemes that fared comparatively better were DSPML Small and Mid Cap Fund (-4.11 per cent), Kotak Contra (-4.12 per cent) and Birla India Opportunities Fund (-4.31 per cent).

In open-ended tax-saving plans, the worst performer was LICMF Tax Plan with negative 9.24 per cent return. Birla Tax Relief '96 performed even better with 3.18 per cent negative return.

Banking funds were worst affected with 9.68 per cent negative return, but lower than the 11.21 per cent fall in the CNX Bank index.

Banking BeES, an exchange-traded fund from Benchmark Mutual, was the worst hit scheme across all equity fund categories with 11.09 per cent negative return.

The scheme invests in bank shares in the same proportion as that of the CNX Bank index.

Technology funds, though in negative terrain, were not so badly hit and recorded 4.67 per cent negative average return. In comparison, the BSE IT index and the CNX IT index fell 3.81 per cent and 4.66 per cent, respectively.