We have seen FMCG funds achieve something rather elusive this month, i.e. growth. And what is even more amazing is that FMCG funds have outperformed even some growth funds in the process.

Open-ended, FMCG Schemes	NAV (Rs)	Last week	Last month	Last year	*CAGR Since inception
Pru ICICI FMCG (Gr)	10.3	0.7%	2.1%	-20.1%	0.0%
K P FMCG (Gr)	12.3	0.6%	1.5%	-18.5%	14.1%
Magnum Sector Funds-FMCG	8.6	1.1%	0.0%	-39.3%	-8.9%

*Compounded Annual Growth Rate

Fast moving consumer goods (FMCG) stocks have rarely had it so good. Frontline FMCG stocks like Hindustan Lever, Nestle, Procter & Gamble have appreciated significantly over the month. One reason behind the buying in FMCG stocks is of course the general wariness and caution that has been associated with software stocks of late. This has given a fillip to old economy and FMCG stocks. As a result, FMCG funds have recorded some (much-needed) gain.

What has come as a pleasant surprise to most investors is the fact that FMCG funds have even outperformed quite a few growth funds. The reason being that very few growth funds have exposure to FMCG and old economy stocks and most are still counting on software to boost their returns.

Open-ended, Growth Schemes	NAV (Rs)	Last week	Last month	Last year	*CAGR Since inception
Magnum Equity Fund	12.8	5.8%	-3.1%	-42.0%	13.9%
Pru ICICI Growth (Gr)	21.4	5.0%	-3.3%	-32.8%	34.5%
Taurus Starshare	8.4	1.4%	-4.0%	-29.9%	-3.5%
JM Equity Fund (Gr)	9.8	5.0%	-4.5%	-39.0%	0.6%
Canexpo	16.3	6.5%	-4.6%	-27.7%	10.0%
Magnum Global Fund	9.9	5.3%	-5.2%	-49.0%	2.0%
Magnum Multiplier Plus 1993	14.9	4.0%	-6.5%	-55.9%	6.8%
Birla Advantage Fund	31.9	3.9%	-6.6%	-45.6%	27.5%
ING Growth (Gr)	14.0	9.1%	-8.3%	-33.0%	26.9%

*Compounded Annual Growth Rate

However, the fact that FMCG stocks have witnessed buying in the last month is no guarantee that we will see a repeat performance in this month. Currently software stocks are really cheap and fund managers are already taking of re-entering software at lower levels. In this case, the FMCG story maybe short-lived after all.

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