Business Daily from THE HINDU group of publications
Saturday, Jun 17, 2006
Markets - Stock Markets
A handful of funds bucked the trend
Some sector funds dropped considerably
Kolkata , June 16
The Sensex in mid-December 2005 may have been precipitously close to that on June 13, the day it dropped close to 9,000 points, but that may not stop investors from laying the blame squarely at the average fund manager's door.
The reason is simple: About 60 per cent of the fund managers have not generated the kind of volatility-adjusted returns that their clients would have wanted during this period.
The 30-share BSE index, considering its December 8 level of 8,969.54 points and with the June 13 figure a shade higher at 9,062.65, has not changed much, a trend that has not gone unnoticed in investment circles.
The latter, however, would have ideally liked equity funds to sustain their position - a big expectation, given the fact that a number of them have gone down too sharply for comfort.
As data collated by distribution firm Plexus Management suggest, a few equity funds have seen their NAVs drop by a huge margin.
These include the likes of ABN AMRO Dividend Yield Fund (over 19 per cent), ING Vysya Dividend Yield Fund (15 per cent), UTI Growth & Value Fund (13 per cent), and Tata Equity PE Fund (10 per cent).
There are others, with the universe of such players comprising some of India's better-known funds.
"When the downturn came, many of the fund houses that are supposed to provide returns on a volatility-adjusted basis did not seem to perform to the complete satisfaction of most investors," said Mr Prasunjit Mukherjee, who heads Plexus. Considering only the funds that have Sensex as their benchmark, the list of relative under-performers (excluding some of the tax-saving schemes) includes Kotak MNC (a negative 12 per cent), LIC MF Equity (13 per cent), UTI Master Share (10 per cent), Tata Growth (10 per cent) and UTI Opportunities (nine per cent).
The Sensex, again considering its scores on December 8 and June 13, went up marginally by 1.05 per cent.
While their numbers are few and far between, a few funds have gone the other way, sprinting ahead of the herd by a few paces.
According to the Plexus review, Tata Infrastructure Fund, for instance, has delivered a positive 5.2 per cent, followed by Kotak 30, which has turned in 3.3 per cent. Both have the Sensex as their benchmark.
Taking some of the other indices into account, the better performers include Sundaram Select Focus (8.1 per cent), Prudential ICICI Dynamic (5.3 per cent), and UTI Infrastructure (5.6 per cent).
While the first two are benchmarked against the 50-share Nifty, the third has BSE 500 as its benchmark index.
Between the two relevant dates, the Nifty dipped by 2.13 per cent, while the BSE 500 declined by 5.1 per cent.
However, some of the sector funds dropped considerably. SBI Magnum FMGG, UTI Banking Sector and DSP Merrill Lynch Technology.com were among the worst hit.
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