Mutual funds wipe out red ink

The boom fallout: 116 schemes' collective net reserves at Rs 3,673 cr in H1

The mutual fund industry turned around hugely during the first half of the current fiscal, thanks to the widespread rally in stock prices since the end of April 2003.

The 116 equity schemes currently in operation collectively posted net reserves of Rs 3,673 crore during April-September 2003, compared with negative reserves of Rs 402 crore on March 31, 2003.

Funds that were holding a portfolio of relatively staid bank and public sector company stocks at the end of March 2003, found they were sitting on a goldmine as these sectors posted unimaginable returns in the subsequent six months.

The unaudited results of 25 mutual funds for the half year ended September 2003 show that 11 of them turned around, eight reduced losses, while six increased reserves substantially.

Individually, as many as 39 equity schemes turned around, posting net reserves of Rs 491 crore at the end of September 2003, compared with negative reserves of Rs 657 crore at the end of March 2003. Twenty-four schemes reduced their negative reserves from Rs 1,214 crore to Rs 740 crore.

The remaining 53 schemes increased their reserves almost four times, from Rs 1,055 crore at the end of March 2003 to Rs 4,176 crore on September 30, 2003.

The UTI mutual fund, UTI-II, scored over all other fund houses, with its stable of 16 equity schemes posting a rise in net reserves from Rs 111 crore at the end of March 2003 to Rs 1,106 crore at the end of September 2003.

Nine equity schemes of Franklin Templeton improved their collective reserves from Rs 285 crore to Rs 1,009 crore.

Birla Sunlife's seven equity schemes increased their collective reserves by Rs 200 crore to Rs 803 crore.

Alliance Mutual Fund posted a smart turnaround, with its nine equity schemes aggregating net reserves of Rs 138 crore, compared with negative reserves of Rs 151 crore in March 2003.

SBI Mutual Fund posted a modest recovery with 10 schemes reporting net reserves of Rs 76 crore, compared with negative reserves of Rs 143 crore in March 2003.

Prudential ICICI mutual fund almost wiped out its losses, with its five equity schemes recording negative reserves of Rs 1.39 crore at the end of September 2003, compared with negative reserves of Rs 238.94 crore in March 2003.

IL&FS MF, too, did well with the negative reserves of its five equity schemes declining from Rs 120.97 crore to Rs 2.61 crore.