The month of June has been an average one for mutual fund (MF) investors, but the quarter – April to June – as a whole has more than made up for the lag, with a historically best performance.
This is in no small measure due to the performance posted by stock markets in the second quarter of 2009 – it has been enough to bring about the widest of smiles on the faces of investors across the spectrum.
During this three-month period, the BSE Sensex gained a heartwarming 49.29 per cent, despite negative returns of 0.9 per cent in June.
The Sensex was, however, outscored by the BSE Small Cap Index (76.8 per cent) and BSE Mid Cap Index (71.72 per cent) during the quarter. In June, while the BSE Small Cap Index lost 4.12 per cent, the BSE Mid Cap Index did manage positive returns of 0.39 per cent.
The diversified equity category posted the highest quarterly returns in history, but were beaten by the banking fund category.
The equity diversified category posted returns of 49.26 per cent, the highest in any quarter in history, even going on to beat the 15-year-old record set way back in March 1994.
The same privilege, of setting historically best records, was enjoyed by investors of index funds (46.69 per cent), which broke a more than five-year record, and banking funds (66.03 per cent), which broke a more than four-year record, too.
To put things in perspective, the worst quarterly performance-ever by the diversified equity funds' category was logged in the first quarter of 2008, when equity funds fell by 28.35 per cent.
RECOVERY OF LOSSES
During the quarter, the rally was led by the realty, capital goods, metal, banks and consumer goods stocks. BSE Realty Index gained over 105.48 per cent during the quarter, followed by BSE Capital Goods (97.92 per cent) and BSE Metals (86.90 per cent), while BSE FMCG, at the lower end of the spectrum, gained a modest 11.12 per cent during the same period.
June was, however, a dull month on the street, as BSE Realty lost 16.04 per cent, followed by BSE Oil and Gas (minus 9.88 per cent). Gains, however, accrued to stocks in the IT, FMCG, capital goods, consumer goods and healthcare sectors.
June may well be a pointer to investors' attitude after they booked great returns in the months of April and May and just about average in June. Perhaps, this had to do with profit-booking, as well as waiting for the Budget to give cues.
The watered-down sentiment of investors also drove the FMCG sector to gain somewhat. It is a defensive sector and comes to the forefront when sentiment turns negative and people are looking for stable gains.
| Category | 1 Month | 3 Months |
| Equity: Banking | 0.50 | 66.03 |
| Equity: Diversified | -0.09 | 49.26 |
| Equity: FMCG | 6.92 | 21.76 |
| Equity: Index | -1.94 | 46.69 |
| Equity: Pharma | 2.44 | 32.94 |
| Equity: Speciality | -0.76 | 29.17 |
| Equity: Tax Planning | -0.43 | 46.88 |
| Equity: Technology | 5.64 | 49.18 |
| Gilt: Medium & LT | 0.31 | 2.67 |
| Gilt: ST | 0.11 | 1.05 |
| Gold ETF | -2.08 | -3.99 |
| Hybrid: Arbitrage | 0.74 | 1.31 |
| Hybrid: Ast Allocat | -0.63 | 36.35 |
| Hybrid: Debt-oriented | 0.80 | 10.76 |
| Hybrid: Equity-oriented | 0.23 | 35.00 |
| Hybrid: Mntly Income | 0.42 | 8.11 |
| Debt: Flt Rate LT | 0.54 | 1.51 |
| Debt: Flt Rate LT Inst | 0.62 | 1.91 |
| Debt: Flt Rate ST | 0.40 | 1.27 |
| Debt: Flt Rate ST Inst | 0.36 | 1.15 |
| Debt: Liquid Plus | 0.45 | 1.33 |
| Debt: Liquid Plus Inst | 0.46 | 1.36 |
| Debt: MT | 0.63 | 2.86 |
| Debt: MT Inst | 0.58 | 3.29 |
| Debt: S-T | 0.59 | 2.27 |
| Debt: S-T Ins | 0.61 | 2.21 |
| Debt: Speciality | 0.52 | 1.46 |
| Debt: Ultra S-T | 0.34 | 1.11 |
| Debt: Ultra S-T Inst | 0.37 | 1.22 |
| All returns as on June 30, 2009. Returns over 1 year are annualised. | ||
The Fast moving consumer goods (FMCG) funds with 6.92 per cent, and Technology funds with 5.64 per cent, gained the most during the month.
The markets also propelled the monthly income funds, which gave their historically best quarterly returns of 8.11 per cent, breaking a nine-year record.
JUST NORMAL FOR DEBT
For the pure debt, the quarter was absolutely normal, with funds neither losing nor posting any kind of flashy returns. During the quarter, medium-term debt funds gained 2.86 per cent, while cash funds gained 1.11 per cent.
The gilt funds also remained humble during the quarter, with the longer duration gilt funds gaining 2.67 per cent and the shorter duration gilt funds gaining 1.05 per cent. The 10 year GOI yield during the quarter rose from 6.7 per cent to 7.03 per cent during the month.
Gold ETFs, that invest in physical gold, once again turned losers (minus 2.08 per cent), after small gains posted in May. They lost 3.99 per cent.
The quarterly performance has been a welcome sign of things to come. With the Budget round the corner, this magnificent performance may go on to drive sentiment upwards across the board.
