Saturday, July 31, 2010 18:11 Hrs IST

Weekly Scenario: Most of the Equity Fund Categories Witness Loss

Indian equity markets were unable to sustain the previous week bull run rally leading Sensex and Nifty to decline 1.45% and 1.50% respectively over week ended 30 July 2010. Markets plummet as RBI increased interest rates to control inflation. It happened to be the derivatives expiry week and mixed corporate results had lead to the fall of equity markets during the week.

RBI had hikes repo rate by 25 bps to 5.75% and reverse repo rate by 50 bps to 4.50%, on 27 July 2010 to rein in demand pressures and moderate inflation. Moreover it revised the projection of real GDP growth for 2010-11 to 8.5%, up from 8.0% with an upside bias in the April 2010 policy statement taking into account better industry, services growth and reflects progress of monsoon so far. Also it raised the projection for WPI inflation for March 2011 to 6.0% from 5.5% in the April policy statement.

Growth in India's key infrastructure industries decelerated to an 11-month low of 3.4% in June, mainly on account of near flat coal output.

The fall in the market was felt in the equity schemes as well, as most of the equity fund categories ended as losers. In the major equity fund categories Index Funds declined the most by 1.40%, Equity Diversified Funds declined 0.60% and Tax Savings Funds slipped 0.55% during the one week period 30 July 2010.

FMCG Funds gained 1.09% and Banking Funds surged 0.89% in the sector funds. On the other hand Infotech Funds and Pharma Funds fell 0.66% and 1.63% respectively.

Among the sub categories in debt fund, Floating Rate Income Funds – Short Term, Liquid Funds, Ultra Short Term Funds gained 0.10% each, Floating Rate Income Funds – Long Term climbed 0.07%. While Short Term Income Funds declined 0.01%, Income Funds fell 0.09%, Gilt – Short Term slipped 0.24% and Gilt – Medium & Long Term declined 0.28%. In the ETF category, Other ETF's fell 0.56%, while Gold ETF's declined 2.83%.

Equity Diversified Funds

NAV of the Equity Diversified Funds category declined 0.60% in the week ended 30 July 2010. Among the schemes in the equity diversified category, IDFC Premier Equity Fund – Plan A gained the maximum of 1.70%, followed by SBI Magnum SFU – Emerging Business Fund which climbed 1.66%, Taurus Discovery Fund rose 1.45%, DWS Alpha Equity Fund jumped 1.34% among others. JM Basic Fund and Tata Life Science & Technology Fund were the worst performers in this category declining 2.92% and 2.61% respectively.

Tax Savings Funds

Tax savings Funds category declined 0.55% over one week period as on 30 July 2010 which is lower than the previous week gain of 0.70%. Taurus Tax Shield and DWS Tax Savings Fund were the top performers with a return of 1.34% and 1.28% respectively during one week period. Among the other schemes in the category, Axis Tax Saver Fund rose 0.09%, Birla Sun Life Tax Plan climbed 0.08% and JPMorgan India Tax Advantage Fund surged 0.03%. HSBC Tax Saver Equity Fund and JM Tax Gain Fund ended at the bottom of the table losing 1.42% and 1.31% respectively.

Index Funds

The Index Fund category declined 1.40% over one week period ended 30 July 2010. All the schemes in this category ended the week as losers. LICMF Index Fund – Sensex Advantage Plan and Taurus Nifty Index Fund were the biggest losers in this category. Their NAV fell 1.58% and 1.55% respectively over one week time period. ICICI Pru Nifty Junior Index Fund and Benchmark S&P CNX 500 Fund had minimum loss in this category, declining 0.16% and 1.05% respectively.

Sector Funds

Pharma Funds category declined 1.63%, with SBI Magnum SFU – Pharma Fund ending the week as the top loser with a erosion in NAV by 2.47%, it was followed by UTI-Pharma & Healthcare Fund which declined 1.51%.

Banking Funds category gained 0.89%, with Reliance Banking Fund gaining 1.53% and Sundaram BNP Paribas Financial Services Opportunities gaining 1.24%. Sahara Banking & Financial Services Fund ended at the bottom of the category declining 0.49%.

FMCG Funds category gained 1.09% over one week period ended 30 July 2010. All the schemes in this category were able to deliver gains. SBI Magnum SFU – FMCG Fund was the top performer in this category. It's NAV appreciated by 1.60% over one week period.

Infotech Funds category declined 0.66% over one week period ended 30 July 2010. Birla Sun Life New Millennium Fund ended as the biggest loser declining 1.26%.

Hybrid Funds

Among the sub categories in the hybrid funds, Arbitrage Funds surged 0.16%. Monthly Income Plans declined 0.18%, Debt Oriented Balanced Funds slipped 0.33%, Equity Oriented Balanced Fund dropped 0.45% and Asset Allocation Balanced Fund declined 0.83%.

HDFC Prudence Fund and Birla Sun Life '95 Fund were the highest gainer in equity oriented balanced fund category as their NAV appreciated by 0.48% and 0.29% respectively. LICMF Balanced Fund was the worst performer in this category declining by 1.30%.

Escorts Income Bond was the highest gainer in debt oriented balanced fund category as its NAV appreciated by 0.61%. SBI Magnum Children Benefit Plan was the next highest gainer by 0.38%. LICMF Children's Fund was the worst performer in this category declining 1.10% respectively.

Debt Funds

Among the Debt funds, Sundaram BNP Paribas Bond Saver - Appreciation gained 0.64%, Baroda Pioneer Gilt Fund added 0.31%, Baroda Pioneer Income Fund rose 0.28% and ICICI Pru Long Term Floating Rate Plan B, ICICI Pru Long Term Floating Rate Plan C & Birla Sun Life Short Term Opportunities climbed 0.14% each. Escorts Gilt Fund was the worst performer in this category declining 1.07%.