Its been a bad week for IT stocks. Not even an encouraging earnings scenario (from Infosys and Satyam) could alleviate the pall of gloom in the segment. Not surprisingly then, IT funds are feeling the brunt of this decline and diversified growth funds are looking up.

Funny as it may sound, when Satyam (net profit up 90%) and Infosys (up 109%) declared their results last week, the markets actually reacted adversely and offloaded these stocks. This was because the markets had already discounted these earnings, which were more or less in line with expectations. That's the reason most IT stocks have been heading downhill for some time now.

Open-ended, Growth Funds	NAV (Rs)	Last week	Last month	Last year	Since inception
K P Internet Opport.(Gr)	8.64	-2.50%	-0.50%	0.00%	-9.80%
Chola Freedom Tech (Cum)	17.11	-2.60%	0.60%	15.50%	23.30%
K Tech	8.21	-2.80%	0.30%	0.00%	4.70%
Sun F&C Emerg Tech (Gr)	7.32	-3.00%	-0.40%	0.00%	-14.50%
Pru ICICI Tech. (Gr)	6.31	-3.10%	-2.30%	0.00%	-35.90%
K P Infotech (Gr)	30.82	-3.10%	0.60%	186.30%	169.90%
Tata IT Sector Fund	12.97	-3.60%	-1.70%	91.40%	27.70%
Alliance New Millenn (Gr)	9.09	-3.90%	-2.20%	0.00%	-40.50%
Birla IT Fund (Gr)	21.18	-4.40%	-4.10%	78.10%	16.50%
IL&FS eCOM Fund (Gr)	7.25	-4.50%	-0.70%	0.00%	-46.80%
DSP ML Tech.com (Div)	9.38	-4.50%	-2.00%	0.00%	9.80%

So while this is bad news for IT funds, diversified growth funds are doing way better. And given the surge in FMCG stocks, diversified growth funds with significant exposure to FMCG stocks are seeing higher growth.

Open-ended, Growth Funds	NAV (Rs)	Last week	Last month	Last year	Since inception
Magnum Global Fund	13.22	2.20%	4.90%	34.20%	7.60%
Mastershare Plus 1991	24.85	1.80%	8.80%	-0.80%	6.70%
Zurich(I) Capital Builder	13.94	1.70%	6.70%	8.20%	6.30%
JM Equity Fund (Div)	12.66	1.10%	5.10%	34.10%	13.70%
Canbonus	11.33	1.00%	6.60%	-8.20%	3.90%
K MNC	10.61	0.80%	4.00%	0.00%	13.40%
DSP ML Equity Fund	20.83	0.50%	7.00%	22.70%	35.20%
Birla MNC Fund (Gr)	32.77	0.40%	2.60%	102.40%	23.00%
IDBI Equity Fund	12.33	0.30%	6.20%	12.30%	5.40%
Mastergain 1992	12.66	0.30%	6.90%	-0.50%	4.60%
Reliance Vision Fund	21.13	0.30%	5.40%	31.20%	16.80%
Mastergrowth 1993	21.13	0.20%	7.10%	14.30%	11.90%
K P Prima Fund (Gr)	22.61	0.10%	-2.70%	33.00%	13.20%
GIC D'MAT	9.06	0.10%	5.00%	0.00%	-21.30%

Investors need to look out for truly diversified funds. Funds with a heavy bias towards software need to be shunned, as the mood in IT stocks is largely downbeat with few signs of a turnaround. On the other hand, FMCG stocks are on the upswing on expectations of good results. However, if these results don't materialise, we may see some correction.

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