Liquid plans made solid gains

CRISIL-CPR (QUARTERLY) RANKINGS OF MUTUAL FUND SCHEMES FOR JUNE '05

Crisil FundServices' Composite Performance Rankings (Crisil-CPR) recognise top performers in various investment categories available to mutual fund investors. The ranking serves as a guide to fund investors in terms of asset allocations and in picking best performing schemes.

Crisil FundServices ranked 169 schemes across nine categories on various Crisil-CPR parameters in the quarter ended June 2005. These schemes accounted for 61 per cent of the mutual fund industry's assets under management.

Crisil FundServices analysed the performance of the equity, Equity-linked savings schemes (ELSS), income, balanced, gilt-long schemes, and monthly income plan (MIP) schemes over two years and of the liquid, floating-rate and income-short schemes over a year. Crisil includes retail options for all schemes ranked.

During the course of the quarter, liquid schemes gained popularity mainly owing to uncertainty over interest rates as a result of the rise in reverse repo rate by RBI. Fixed maturity plans (FMPs) continued to make their presence felt in the realm of mutual fund schemes due to the investors demand for products with pre-set tenures.

The Securities and Exchange Board of India (Sebi) has directed asset management companies (AMCs) to term their new scheme launches as new fund offerings (NFOs) or new scheme offerings (NSOs). Assets under management (AUM) of mutual fund industry increased by 10.13 per cent from Rs 1,49,388.69 crore in March 2005 to Rs 1,64,518.06 crore in June 2005.

Mobilisations of new fund offerings by existing fund houses and entry of international fund houses in Indian fund management business led to this impressive rise in AUMs. Going forward, local fund managers may soon have some foreign competition if the government clears a proposal to allow foreign fund managers to manage domestic mutual fund schemes.

EQUITY-DIVERSIFIED SCHEMES

After the consolidation witnessed during the first quarter of 2005, stock markets moved up sharply in the second quarter. The Sensex touched a high of 7228.21, while the Nifty touched a record high of 2226.15 during the course of the quarter.

Strong buying by domestic institutions (especially mutual fund schemes that were flush with funds from new scheme launches) and the surge in FII flows in June propelled these indices to new highs.

The Sensex and the Nifty posted returns of 10.80 per cent and 9.09 per cent respectively for the quarter. The end of the quarter saw mid-cap stocks lose some steam on profit booking and as a result, gains in the CNX Midcap 200 were relatively lower at 7.54 per cent during the quarter.

For the quarter ended June 2005, 47 schemes were eligible for the ranking. Crisil-CPR 1 indicates "Very Good Performance" among the peer group and constitutes the top 10 per cent of the category. DSP Merrill Lynch Equity Fund, Reliance Growth Fund, SBI Magnum Industry Umbrella - Contra Fund, Sundaram Select Midcap and SBI Magnum Global Fund jointly held the Crisil-CPR 1 rank.

Sundaram Select Midcap and DSP Merrill Lynch Equity Fund moved up the rankings on account of a relatively higher superior return score and improved company concentration scores.

Tata Equity Opportunities Fund and UTI Master Value Fund are new entrants in the ranking universe with each of the schemes having qualified on the basis of completing two years of NAV history. ING Vysya Equity Fund, on the other hand, makes its debut in the ranking universe on account of an increase in its corpus size.

The Crisil Fund-eX, the benchmark for equity diversified schemes, generated point-to-point returns of 5.97 per cent for the quarter ended June 2005. The most popular stocks among fund managers of general equity schemes in June 2005 were State Bank of India, Reliance Industries Ltd, Oil & Natural Gas Corporation Ltd, Infosys Technologies Ltd and Bharat Heavy Electricals Ltd. The most popular sectors were software followed by the banking industry and pharmaceutical sectors. (Click here to see table I)

The next 20 per cent of the schemes in the ranking universe are clustered as CPR-2, which indicates "Good Performance" among the peers. HDFC Capital Builder Fund, SBI Magnum Multiplier Plus Scheme 1993, Tata Pure Equity Fund, Tata Select Equity Fund and HSBC Equity Fund have retained their Crisil-CPR 2 rank.

Alliance Equity Fund, HDFC Top 200 Fund and Franklin India Prima Plus have moved up over their earlier ranks to Crisil-CPR 2 on account of better 'Superior Return Scores'. Tata Equity Opportunities Fund has made its debut at Crisil~CPR 2.

In the Crisil-CPR 3 cluster (which indicates "Average Performance"), a majority of schemes retained their ranks relative to the last quarter.

While Cholamandalam Growth Fund and HDFC Equity Fund have moved up the ranking chart to Crisil-CPR 3 on account of relatively higher 'Superior Return Scores', Sundaram Select Focus and UTI Index Select Equity Fund have moved up on account of improved performance on the 'Industry Concentration' parameter.

ELSS

Nine schemes were eligible for ranking in this category. The Equity-Linked Savings Schemes (ELSS) category has witnessed a change with SBI Magnum Tax Gain Scheme 1993 moving up a notch to occupy the top slot at Crisil~CPR 1 for the quarter ended June 2005 on account of an impressive performance on the 'Superior Return Score' parameter.

HDFC Tax Saver Fund and Prudential ICICI Tax Plan jointly hold the Crisil-CPR 2 slot. Franklin Taxshield Fund has moved up a notch to join Birla Equity Plan and Tata Tax Saving Fund at Crisil-CPR 3 on account of a creditable performance on the 'Superior Return Score' parameter. (Click here to see table II)

INCOME SCHEMES

The steady performance of income schemes witnessed in the previous quarter continued during the course of the quarter ended June 2005. The Crisil Fund-dX, the benchmark for income schemes, generated point-to-point returns of 1.75 per cent for the quarter ending June 2005 as against 1.35 per cent for the quarter ended March 2005.

The bond market discounted and eventually absorbed volatility in global crude prices, a round of domestic auto-fuel price hikes and the hike in the US interest rates. The benchmark 10-year yield ended at 6.89 per cent as in the quarter ended June 2005 up from 6.67 per cent a quarter ago.

Nineteen schemes were eligible for ranking in the income schemes category for the quarter ended June 2005. Principal Income Fund retained its Crisil-CPR 1 rank and was joined by UTI Bond Fund - Growth, which gained on account of improved performance across most of the parameters.

HSBC Income Fund - Investment Plan and Prudential ICICI Income Plan have moved up the ranking charts to end this quarter at Crisil-CPR 2 on account of improved performance on the 'Superior Return Score' and 'Asset Quality' parameters. (Click here to see table III)

INCOME SHORT-TERM SCHEMES

The performance of income short-term schemes over the quarter continued to be steady. The Crisil STBEX, which is a benchmark for short-term schemes, witnessed a marginal dip in point-to-point returns. The benchmark returned 1.26 per cent for the quarter as against 1.35 per cent for the previous quarter.

In the income short-term category, 14 schemes were eligible for ranking. Reliance Short Term Fund has moved up a notch to top the charts at Crisil-CPR 1 on account of improved performance on the 'Asset Size', 'Industry Concentration' and 'Company Concentration' parameters.

Prudential ICICI Short Term Plan and UTI Liquid Short Term Plan have retained their Crisil-CPR 2 ranks.

DEBT SHORT

In the Crisil-CPR 3 cluster, Birla Bond Plus - Retail and HSBC Income Fund - Short Term Plan have retained their ranks. JM Short Term Fund, Kotak Bond Short Term Plan and Tata Short Term Bond Fund having qualified for ranking on the basis of increase in their corpus size have made their debuts at Crisil-CPR 3.

Templeton India Short Term Income Plan has moved up two notches to end the quarter at Crisil-CPR 3 on account of relatively higher scores on 'Company Concentration', 'Asset Quality' and 'Downside Risk Probability' (DRP) parameters (DRP is the measure of the probability of the number of times returns fall below risk free rate over the period of analysis).

FLOATING RATE SCHEMES

In the floating rate category, 16 schemes were eligible for the ranking. HDFC Floating Rate Income Fund - Short Term Plan retained its Crisil-CPR 1 rank and was joined by JM Floater Fund - Short Term Plan, which moved up one notch over its previous ranking on account of its improved performance on the 'Asset Quality' and DRP parameters.

Prudential ICICI Floating Rate Plan and Grindlays Floating Rate Fund have maintained their position at Crisil-CPR 2.

FLOATERS

In the Crisil-CPR 3 cluster, Kotak Floater - Short Term, Tata Floating Rate Fund - Short Term, Templeton Floating Rate Income Fund - Short Term Plan, and UTI Floating Rate Fund - STP have retained their ranks. While HDFC Floating Rate Income Fund - Long Term Plan has moved up by a notch, JM Floater Fund - Long Term Plan has moved up by two notches to end the quarter in the Crisil~CPR 3 cluster. The impressive performance of both the schemes can be attributed to their relatively higher scores on the DRP parameter.

MONTHLY INCOME PLANS

The Crisil MIPEX, the benchmark for monthly income plans (MIP), generated a point-to-point return of 2.62 per cent for the quarter ended June 2005 as against 0.95 per cent for the earlier quarter, signifying an improvement in performance.

In the MIP category, 11 schemes were eligible for the ranking with LICMF Monthly Income Plan making its debut in this quarter having completed two years of NAV history. Templeton Monthly Income Plan has moved up a notch to end this quarter at Crisil-CPR 2, on account of its improved performance on the 'Superior Return Score', 'Industry Concentration' and 'Debt Liquidity' parameters.

Birla Monthly Income Plan C, Tata Monthly Income Fund and SBI Magnum Monthly Income Plan retained their Crisil-CPR 3 rank. Alliance Monthly Income moved up a notch to Crisil-CPR 3 having performed well on the 'Company Concentration', 'Asset Quality' and 'Average Maturity' parameters.

LIQUID SCHEMES

The Crisil-LX, the benchmark for liquid schemes, generated a point-to-point return of 1.29 per cent for the quarter ended June 2005 as against 1.22 per cent for the previous quarter. Sahara Liquid Fund is a new entrant in the ranking universe with the scheme having qualified for ranking on the basis of increase in its corpus size.

Twenty-three schemes were ranked on Crisil-CPR parameters in the liquid scheme category for the quarter ended June 2005. HDFC Cash Management Fund - Savings Plan and UTI Liquid Cash Plan retained their Crisil-CPR 1 ranks.

In the Crisil-CPR 2 cluster, Birla Cash Plus - Retail, Grindlays Cash Fund and HDFC Liquid Fund retained their ranks. They were joined by HSBC Cash Fund and Tata Liquid Fund - RIP which moved up one notch over their previous ranking on account of good performance on the 'Asset Quality' parameter.

LIQUID

Alliance Cash Manager, JM High Liquidity Fund, ING Vysya Liquid Fund, Prudential ICICI Liquid Plan, Kotak Liquid, Principal CMF - Liquid and Templeton India Treasury Management Account retained their Crisil-CPR 3 ranks. Chola Liquid Fund - Regular moved up a notch to Crisil-CPR 3 having performed creditably on the 'Superior Return Score' and 'Asset Quality' parameters.

GILT-LONG SCHEMES

The gilt-long category remained relatively stable, with the Crisil MF-Gilt Index generating point-to-point returns of 1.10 per cent for the quarter ending June 2005 as against 1.03 per cent for the previous quarter.

Fourteen gilt schemes were eligible for the CPR ranking for the quarter ended June 2005. Templeton India G-Sec Fund - Long Term Plan retained its Crisil-CPR 1 rank.Prudential ICICI Gilt - Investment and UTI Gilt Advantage Fund - Long Term Plan remained steady at Crisil-CPR 2. Templeton India G-Sec Fund - Composite Plan moved up the chart to Crisil-CPR 2 on account of it performing admirably on the 'Superior Return Score' parameter.

In the Crisil-CPR 3 cluster, Kotak Gilt - Investment - Regular, Sahara Gilt Fund and Birla Gilt Plus - Regular Plan retained their ranking. While HDFC Gilt Fund - Long Term Plan moved up one notch on the back of an impressive performance on the 'Average Maturity' and 'Gilt Liquidity' parameters, Birla Gilt Plus - PF Plan moved up the ranking chart by two notches to Crisil-CPR 3 on account of a relatively higher 'Superior Return Score'.

BALANCED SCHMES

The performance of Balanced scheme category reflects the out-performance of the equity markets. The Crisil Fund~bX generated point-to-point returns of 6.41 percent during the quarter as against 0.78 percent for the preceding quarter. CanBalance is a new entrant in the ranking universe with the scheme having qualified for ranking on the basis of increase in its corpus size.

Fifteen schemes were eligible for ranking on Crisil-CPR parameters for the quarter ended June 2005. Tata Balanced Fund has moved up a notch to join SBI Magnum Balanced Fund at Crisil-CPR 1 rank on account of an improved performance on the 'Company Concentration' parameter.

HDFC Prudence Fund - Growth and Kotak Balance have retained their Crisil-CPR 2 ranks. DSP Merrill Lynch Balanced Fund has moved up one notch each to Crisil-CPR 2 on the back of better scores across most parameters as compared to its peers.

Note: An entity wishing to use the Crisil-CPR rankings in its prospectus/ offer document/ advertisement/ promotion/ sales literature, or wishing to re-disseminate these rankings, may do so only after obtaining the written permission of the ranking entity, Crisil FundServices, Crisil Ltd. For the methodology log on to www.crisil.com