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Best and worst funds of 1999-2000

Financial year 1999-2000 has been a good year for the mutual fund industry with most funds providing positive returns. This rediff.com-Value Research study of one-year fund performance finds out that diversified equity funds have provided an average return of 78.19 per cent. There are no losers in this category. Except for one scheme in balanced funds, there are no losers in most of the other categories.

Since most of the sectoral, tax planning and gilt funds are less than a year old, we look at three-month performance of these funds to get a bigger sample. In sectoral funds, there are some losers.

The best funds are Alliance Equity in diversified equity, SBI's Magnum Balanced in balanced funds, Sundaram Bond Saver in medium-term debt funds and Dundee Liquidity in short-term debt funds. A closer look.

Equity - Diversified

Equity markets have yielded astronomical returns in the last year, thanks to the bull run on the bourses and there have been no losers in this category. The recent volatility is a part of the inherent risk associated with equity investments.

Diversified equity funds have, on an average, returned 78.19 per cent in the last year. While all the top 10 funds have convincingly outperformed the sector average, Alliance Equity has topped with a whopping return of 212 per cent in the last one year!

Top 10 gainers	1-year returns (%)
Alliance Equity	211.90
Magnum Equity	189.42
Libra Leap	184.72
Birla Advantage	158.54
GIC Growth Plus II	153.44
Magnum Multiplier Plus	138.86
Prudential ICICI Growth Plan	123.95
Magnum Global	110.57
Kothari Pioneer Prima Plus	109.72
Taurus Discovery Stock	109.47
Average	78.19
No loser

Equity - Balanced

With most of the balanced equity funds tilting in favour of the equity markets, they have also posted impressive returns - 59 per cent in the last year. Magnum Balanced ranked first posting a return of 188.33 in the last year. This sector's sole loser, Dhanasahayog, posted a negative return of 4.37 last year.

Top 5 gainers	1-year returns (%)
Magnum Balanced	188.33
Alliance '95	137.09
Unit Scheme '95	103.69
Tata Balanced	66.79
Zurich India Prudence	57.76
Average	58.94
Top loser	1-year returns (%)
Dhanasahayog	-4.37

Debt - Medium-term

With interest rates going down, debt funds invested towards the long-end of the market have posted smart gains. This has been particularly pronounced in the fourth quarter of the last financial year. While on an average, debt funds have returned 13.08 per cent, Sundaram Bond Saver has outperformed its peers posting 15.08 per cent return.

Top 10 gainers	1-year returns (%)
Sundaram Bond Saver	15.04
Templeton India Income	14.65
Tata Income	14.27
Pru ICICI Income Plan	14.02
Escorts Income Plan	13.89
JF India Bond	13.50
Kothari Pioneer Income Builder	13.39
DSPML Bond	13.17
Magnum LIF (G)	13.15
Sun F&C Money Value Bond	13.12
Average	13.08
No loser

Debt - Short-term

Short-term debt funds have on an average, yielded a return of 9.56 per cent. Dundee Liquidity and JM High Liquidity have been the star performers in this category, posting a return of 13.10 and 12.63 per cent, respectively. These exceptional returns are attributed to these funds' strategy to invest a larger part of the corpus in the long-end of the debt market.

Top 5 gainers	1-year returns (%)
Dundee Liquidity	13.10
JM High Liquidity (G)	12.63
Kothari Pioneer TMA	9.71
Templeton India Liquid	9.71
Birla Cash Plus	9.69
Average	9.56
No loser

Equity - Sectoral

Sectoral equity funds have given an average return of 7.89 per cent over the last three months. Two of Unit Trust of India's sector-specific funds belong to the toppers' league, with UTI Service Sector generating the highest return of 82.7 per cent. Three of SBI Mutual Fund's sector funds belong in the top losers' category with Magnum Contra losing as much as 26.79 per cent in the last three months.

Top gainers	3-month returns (%)
UTI Services Sector	82.70
UTI Software	53.04
Magnum IT	25.97
Chola Freedom	25.72
Tata IT	24.48
Average	7.89
Top losers	3-month returns (%)
Magnum Contra	-26.79
Magnum Pharma	-24.02
Kothari Pioneer Pharma	-23.48
Magnum FMCG	-17.13
UTI Pharma & Healthcare	-11.56

Equity - Tax Planning

In the three-month horizon, tax-planning schemes have gained the maximum - yielding 15.58 per cent on an average. However, there has been a wide variance in the performance of this group with Alliance Tax Relief '96 yielding the highest return of 44.51 per cent and BOB ELSS '96 - the only loser in this category - posting a negative return of 4.91 per cent.

Top 5 gainers	3-month returns (%)
Alliance Tax Relief '96	44.51
Magnum Taxgain	28.40
Kothari Pioneer Taxshield	26.05
Sundaram Taxsaver	14.17
Birla Equity Plan	13.84
Average	15.58
Top loser	3-month returns (%)
BoB ELSS '96	-4.91

Gilt Funds

Returns from gilts have been boosted because of a consistent decline in interest rates leading to capital appreciation of the underlying portfolio. The returns have been further boosted with the cut in credit reserve ratio, or CRR, and bank rate on April 1.

Gilt funds, on an average, yielded 3.52 per cent in the last three months which implies a simple annual return of 14.08 per cent. Both the options of Templeton G-Sec Fund are in the topper's list while Tata GSF (A) has outperformed its peers with a return of 6 per cent in the last three months.

Top gainers	3-month returns (%)
Tata GSF	6.00
Birla Gilt Plus (Long term)	5.02
Templeton IGSF (G)	4.88
Templeton IGSF (D)	4.64
JM G-Sec PF	4.50
Average	3.52
No loser

Performance Review

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