Best and worst funds of March quarter
Dhirendra Kumar
From bad to worse
If the markets took you through the frying pan in 2000, it's straight
in to the fire in the first quarter of 2001. With the dream budget dramatically culminating
into a nightmare, the markets have gone from bad to worse; the slide
in 2001 has gathered further speed. The domestic woes - the political
quagmire, the bear cartel, payment crisis combined with the global threat
of stumbling US economy and the spate of profit warnings from tech companies all did
enough to see the Sensex close the quarter way below 4000 at 3604, losing
15.13 per cent in March alone. As in the recent past, technology stocks have
been at the centre of the current collapse.
With the broking community broke, day traders out of business and the halt
of inflows in equity funds, FIIs were the only saving grace for the
markets - pouring over Rs 81.21 billion in the first quarter alone. This
is contrary to popular perception, as one would assume that the FIIs
are more sensitive to systemic risk that have plagued the markets in
recent times.
Equity Diversified
On the first anniversary of the tech crash, with most diversified portfolios
still having enough of technology to bother you, the moot question is
where is this sector headed? It is difficult to predict what's in store
in the short-term. While the concerns on the tech spending of the US
companies are genuine, the coming month would unfurl the 'real' impact
on Indian software companies. Even if the worst comes true, it means a
short-term slowdown and certainly not the death knell for this sector.
For technology has changed the way we lead our lives and that's not
going to change. Thus the current crisis should be a short-term disappointment
rather than a pointer to a long-term derailment on the tech outlook.
The performance in this category, with a loss of 16.57% has been the
story of diversification - or rather the lack of it. For ING Growth
Portfolio, a loss of 46.85% in the last quarter - the sharpest in its
category, is a loss, which could have been well avoided. Given its tech
heavy portfolio, ING Growth Portfolio has fallen from its high of Rs
39.93 last year to sub par levels. Libra Leap, Taurus Starshare and
Taurus Discovery Stock - all from the Credit Capital AMC have plunged
in sympathy with their erstwhile top holdings - Himachal Futuristic
to lose by 33.45, 28.83 and 24.91% respectively during the quarter.
Two of LIC Mutual fund's long-term under-performers -- Dhansamriddhi
and Dhanvikas witnessed accelerated fall in the bear market again.
While there were no real gainers among equity funds, the well-diversified
funds were still better off registering marginal losses. Three of the
index funds were among the top ten funds which lost the least -- a pointer
to the fact that many managed funds have strayed off this basic investing
tenet to under-perform the index. While Sun F&C Resurgent India Equity
hedge the loss with a predominant cash position, Templeton India Growth
Fund with its well-diversified investment theme has lost less at 5.58%.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| Sun F&C Res. India Equity |
-4.91
|
|
ING Growth Portfolio |
-46.85
|
| Templeton IGF |
-5.58
|
|
Libra Leap |
-33.45
|
| GIC D'MAT |
-5.93
|
|
Dhansamriddhi |
-31.02
|
| Magnum Contra |
-6.00
|
|
Magnum Multiplier Plus |
-30.64
|
| Index Select Equity |
-7.37
|
|
Taurus Starshare |
-28.83
|
| KP Prima |
-7.59
|
|
Dhanvikas (1) |
-27.57
|
| KP Prima Plus |
-9.20
|
|
Magnum Equity |
-25.77
|
| Franklin India Index |
-9.25
|
|
Taurus Discovery Stock |
-24.91
|
| Nifty Index Fund |
-9.53
|
|
Alliance Equity |
-24.62
|
| Zurich India Top 200 |
-9.54
|
|
Reliance Vision |
-24.28
|
| No. of Funds |
53
|
| Sector Average |
-16.57
|
Tax Planning Scheme
This category of 15 funds grossly under-performed the Sensex at a loss
of 21.48%. With half of their holdings in the volatile TMT sector, LICMF
Taxplan topped the losers' list with a 44.71% fall. Zurich India Tax
Saver, which holds a diversified portfolio, lost the least at 10.27%
in the last quarter.
| Leaders |
Return
3 Month
|
|
Laggards
|
Return
3 Month
|
| Zurich India Taxsaver
|
-10.27
|
|
LICMF Tax Plan |
-44.71
|
| Tata Tax Saving Fund
|
-11.16
|
|
Libra Taxshield '96
|
-38.70
|
| Escorts Tax Plan |
-11.86
|
|
Magnum Taxgain |
-34.58
|
| KP Taxshield |
-12.69
|
|
Canequity-Tax Saver
|
-24.46
|
| Pru ICICI Tax Plan
|
-13.41
|
|
Birla Equity Plan |
-22.40
|
| No. of Funds |
15
|
|
|
|
| Sector Average |
-21.48
|
|
|
|
Equity Technology
With the technology fund being the eye of the current storm, this category
has shed an average 31.64% in the last quarter, thus wiping away the
gains in this sector earlier in the quarter. Tata IT has managed to
buck the trend with a loss of just 13.26%, thanks to a predominant cash
position. On the other hand, Magnum IT despite a cash position at 32%
has lost in line with its fully invested peers at 37.16%.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| Tata IT |
-13.26
|
|
UTI Software |
-38.26
|
| KP Internet Opportunities Fund |
-21.18
|
|
K Tech |
-38.11
|
| Chola Freedom Technology |
-25.15
|
|
DSPML Technology.com |
-37.34
|
| Pru ICICI Technology |
-30.82
|
|
Magnum IT |
-37.16
|
| Alliance New Millenium |
-32.38
|
|
IL&FS eCOM Fund |
-35.58
|
| No. of Funds |
13
|
|
|
|
| Sector Average |
-31.64
|
|
|
|
As always, in the best and worst of times investors tend to be driven
by extreme reactions - greed or fear. If the spate of events in the
last one-year has left you unnerved, and you are pressing the sell button
that's sheer stupidity. Equity investing is by no stretch a short-term
play and so you consider staying put rather than book losses at this
juncture. For investors who have entered the peak last year, one viable
alternative is Systematic Investment Plan. By adding a bit at the lower
levels, you can average out the cost of purchase.
Equity - Pharma
With a widespread meltdown in the bourses, not a single sector was spared.
The VR three-fund category of pharma plunged to sub par levels to post
an average loss of 10.32% in the last quarter.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| UTI Pharma & Healthcare |
-9.37
|
|
Magnum Pharma |
-10.82
|
|
|
|
KP Pharma |
-10.78
|
| No. of Funds |
3
|
|
|
|
| Sector Average |
-10.32
|
|
|
|
Equity: FMCG Funds
The FMCG funds too fell by an average 14.01%, with Magnum FMCG shedding
the maximum of 19.01% despite near 25% in cash. KP FMCG is the only
fund to quote at above par levels.
| Leaders |
Return
3 Month |
|
Laggards
|
Return
3 Month |
| Pru ICICI FMCG |
-11.36
|
|
Magnum FMCG |
-19.01
|
| KP FMCG |
-11.66
|
|
|
|
| No. of Funds |
3
|
|
|
|
| Sector Average |
-14.01
|
|
|
|
Equity Speciality
UTI Petro, with 40% in cash and a diversified bundle of petro stocks,
is the only equity fund to buck the trend with a return of 13.63%. JM
basic on the other hand, with similar investment objective shed 6.54%
with its singular dedication to Reliance Industries. UTI services Sector
and Canexpo with their high technology allocation at 49% and 55% have
shed the maximum at 24.84% and 20.75%, respectively.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| UTI Petro |
13.63
|
|
UGS 10000 |
-13.28
|
| JM Basic |
-6.54
|
|
UTI Brand Value |
-13.06
|
| Tata Life Sciences & Tech |
-10.23
|
|
|
|
| K MNC |
-11.28
|
|
|
|
| Alliance Basic Industries |
-11.63
|
|
|
|
| No. of Funds |
12
|
|
|
|
| Sector Average |
-11.93
|
|
|
|
Balanced Funds
In the VR category of balanced funds, the rally in the debt markets
was outdone by the crash in the equity counterparts. With their average
equity exposure at 57%, this 31-fund category shed 9.12 % in the last
quarter. ING Balanced, while holding a balanced debt equity stance,
has committed its entire equity holdings to technology investments.
With this, the fund has lost 28.41% in the last quarter. Magnum Balanced
with 18% allocated to technology shed a whopping 25.14%.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| Canpremium(RO) |
7.81
|
|
ING Balanced Portfolio |
-28.41
|
| Dhanraksha '89 |
-0.30
|
|
Magnum Balanced |
-25.14
|
| KP Pension Plan |
-0.61
|
|
JM Balanced-D |
-17.30
|
| ULIP |
-1.79
|
|
Alliance '95 |
-16.28
|
| Dhanvidya |
-1.91
|
|
Dundee Balanced Fund |
-16.20
|
| No. of Funds |
31
|
|
|
|
| Sector Average |
-9.12
|
|
|
|
Debt Markets
The debt markets on the other hand have had an exceptional quarter -
a near encore of the first quarter's performance in 2000. With three
rate cuts in quick succession, the rally was on in full swing except
for marginal hiccups. Debt instruments respond to changes in the interest
rates and when interest rates move down, bonds gain value. With the
markets responding to the series of rate cuts, the three-month returns
have been splendid at 3.61% or an annualised 14.44%. But here again
investors would do well to realise that these gains are one time. With
the on set of the lower interest rate regime, the returns would be lower
than what was witnessed in the current calendar. With the rally in the
markets, there are no losers in this category.
Medium Term Funds
In the current declining interest rate season, funds, which have been
at the longer end of the maturity spectrum, have gained more.
Debt Funds
This VR category of 35 funds posted an average return of 3.61% in the
last quarter. PNB Debt and IDBI PRINCIPAL Deposit Bond - G with their
G Sec oriented portfolio gained the most at 4.87 and 4.73% respectively.
Both the plans of K Bond - Whole sale and Deposit were at the top with
a return of 4.64 and 4.44% respectively. Dundee Bond Corporate and Dundee
Bond PSU - the companion funds are at the bottom of the heap with returns
falling short of the category average.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| PNB Debt |
4.87
|
|
Dundee Bond Corporate |
2.66
|
| IDBI PRINCIPAL Deposit Bond-G |
4.73
|
|
Escorts Income Plan |
2.78
|
| K Bond Wholesale |
4.64
|
|
Dundee Bond PSU |
2.85
|
| JM Liquid-G |
4.47
|
|
Reliance Income |
3.30
|
| K Bond Deposit |
4.44
|
|
IDBI PRINCIPAL Dep-EA/EB |
3.33
|
| DSPML Bond |
4.37
|
|
Tata Income-DH |
3.37
|
| Grindlays SSI |
4.30
|
|
Tata Income-G |
3.38
|
| KP Income Builder |
4.29
|
|
ING Income Portfolio |
3.38
|
| JM Liquid-D |
4.24
|
|
Sun F&C Money Value Bond |
3.48
|
| Zurich India High Interest |
4.23
|
|
HDFC Income Fund |
3.54
|
| No. of Funds |
35
|
|
|
|
| Sector Average |
3.61
|
|
|
|
Gilt Funds
27 Gilt funds, which were well positioned to gain from the rally, posted
an average 5.40% in the last quarter or an annualised return of 21.6%!
Dundee Sovereign Trust and JM G- Sec, with their longer dated portfolio
made it to the top with a return of 6.83 and 6.69% respectively.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| Dundee Sovereign Trust-G |
6.83
|
|
LIC Govt Sec |
1.81
|
| JM G-Sec PF |
6.69
|
|
Alliance GSF Long-term |
3.52
|
| Dundee Sovereign Trust-DM |
6.67
|
|
UTI G-Sec Fund |
3.84
|
| Dundee Sovereign Trust-DQ |
6.66
|
|
Chola Gilt 2003 |
4.09
|
| Dundee Sovereign Trust-DH |
6.65
|
|
K Gilt Serial 2003 |
4.25
|
| Dundee Sovereign Trust-DY |
6.65
|
|
Cangilt (PGS) |
4.40
|
| Birla Gilt Plus Long-term |
6.64
|
|
Tata GSF-D |
4.59
|
| DSPML GSF Plan A |
6.59
|
|
Zurich India Sov Gilt Inv |
4.62
|
| Templeton IGSF |
6.44
|
|
Tata GSF-G |
4.86
|
| JM G-Sec Regular |
6.06
|
|
K Gilt Serial 2007 |
4.96
|
| No. of Funds |
27
|
|
|
|
| Sector Average |
5.40
|
|
|
|
Debt with Marginal Equity
These funds seek to augment the returns from their debt portfolio with
a marginal equity exposure. This category of 11 funds posted an average
gain of 2.84% with KP Children Asset Plan Gift Plan topping the group
at 6.20%. The half-yearly dividend and the growth option of Templeton
MIP, with their equity component, were at the bottom of the group.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| KP CAP Gift Plan |
6.20
|
|
Templeton MIP-DH |
1.12
|
| KP Monthly Income Plan |
3.41
|
|
Templeton MIP-G |
1.31
|
| Reliance Monthly Income |
3.20
|
|
Birla MIP |
2.08
|
| No. of Funds |
11
|
|
|
|
| Sector Average |
2.84
|
|
|
|
Short-term Funds
Short-term funds invest in an assortment of short maturity instruments.
While they can not extend their maturity like their medium term counter
parts, these fund make good of the intermittent volatility in the money
markets.
Debt Funds
This category of 35 funds returned an average 2.28% in the last quarter.
Prudential ICICI Fixed Maturity Plan yearly and quarterly plans which
seek in relatively longer dated papers were at the top of the category
with a return of 3% and 2.75% respectively.
| Leaders |
3-Month return (%)
|
|
Laggards
|
3-Month return (%)
|
| Pru ICICI FMP Y1 I |
2.9982
|
|
Tata Liquid-G |
1.7631
|
| Pru ICICI FMP Q1 I |
2.7457
|
|
JM High Liquidity-D |
1.8904
|
| K Bond Serial 2001 B |
2.6944
|
|
ING Treasury Portfolio |
1.9072
|
| Chola Liquid |
2.5755
|
|
IDBI PRINCIPAL Cash Mgmt Call-G |
1.9513
|
| Tata Liquid-D |
2.5432
|
|
IDBI PRINCIPAL Cash Mgmt
Liquid-D |
1.9752
|
| No. of Funds |
36
|
|
|
|
| Sector Average |
2.2800
|
|
|
|
Gilt Funds
9 funds in the short-term gilt category posted an average 2.99% in
the last quarter with Birla Gilt Plus Liquid Plan topping the league.
| Leaders |
Return
3 Month |
|
Laggards
|
Return
3 Month |
| Birla Gilt Plus Liquid
|
3.5439
|
|
Zurich India Sov Gilt Sav
|
2.1111
|
| Pru ICICI Gilt Tre Plan
|
3.4771
|
|
Chola Gilt Savings |
2.4150
|
| DSPML GSF Plan B |
3.2674
|
|
K Gilt Serial 2001 |
2.5616
|
| Alliance GSF Short-term |
3.2519
|
|
K Gilt '98 Saving Plan |
3.0456
|
| JM G-Sec Short Term |
3.2086
|
|
JM G-Sec Short Term |
3.2086
|
| No. of Funds |
9
|
|
|
|
| Sector Average |
2.9900
|
|
|
|
Source: Value Research
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