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Nilanjan Dey

Kolkata , Nov. 2

DIVERSIFIED equity funds, hit by the general decline in the market, have lost an average 8 per cent-plus in the past one month, costing their investors part of the gains they had recorded in the recent past.

The schemes, which had moved up in August and September, have also seen some redemption, with a section of investors deciding to book profits in what was characteristically a lean month after a not-so-short spell of bullishness.

The NAVs of diversified funds rode the general negative sentiment prevailing in the market during October, say fund circles, while referring to the loss recorded by the broad indices. The S&P CNX Nifty fell to 2370.95 as on October 31, considerably down from the 2630.05 mark seen on October 3.

Faced with such a decline, some fund houses have been warning investors not to expect too abrupt an upturn, at least not immediately.

According to Mr Nilesh Shah, CIO of Prudential ICICI MF, the equity markets are faced with increasing interest rates, depreciating rupee and sales by foreign institutions. In this context, investors will do well not to expect an overly sharp recovery, he notes, while referring to the possibility that the market may move sideways temporarily.

The decline, point out a section of intermediaries, should actually be seen as an opportunity to buy, especially if the investor concerned is not well entrenched in high-quality equities. "Buying time is coming soon... it will be a great wealth creation opportunity for the long term - whether you invest all at one go or take the SIP/STP route," states SKP Securities, a distributor.

It may be mentioned here that the one-month statistics have actually turned three-month figures on their head. On a three-month basis (as on October 31), diversified equity funds scored over 4 per cent. The lead then was taken by technology funds, which ended the quarter with a shade over 8 per cent. FMCG funds followed with a similar performance.

The one-month scenario, however, has debt funds scoring over their equity counterparts. The former (debt funds of various hues) have given positive returns during this period, albeit marginally.

The list of best one-year performers is led by SBI MF's Magnum Emerging Businesses Fund (with 95.63 per cent, according to Value Research), Magnum Global (89.32 per cent) and Birla Sun Life Buy India (88.95 per cent).

The list of worst performers includes LIC Equity (23.52 per cent), Principal Dividend Yield (30.36 per cent) and ING Vysya Nifty Plus (30.53 per cent).

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