The current downslide in stock markets has taken a heavy toll on equity funds. Growth fund net asset values (NAVs) find themselves hurtling downwards at an alarming rate.

The Reserve Bank of India's (RBI) move to hike the bank rate by 1%, the cash reserve ratio (CRR) by 0.5% and reduce all refinance limits of banks by 50% (wef July 21, 2000) acted as the trigger for the downslide in equity markets.

Economists believe that the rate hike is temporary in nature as the government has only completed 40% of its borrowing programme, and a high interest rate scenario will add to its interest burden. Moreover the country is quite comfortable on issues like like inflation, currency depreciation, revenue collections, forex reserves aren't really a matter of concern to warrant high interest rate regime.

However that has not stopped equity fund NAVs from crashing as is more than evident from the table below.

Open-ended, Growth Funds	NAV (Rs)	Last week	Last month	Last year	Since inception
JM Equity Fund (Div)	11.4	-6.0%	-7.1%	13.7%	11.4%
UGS 10000	11.4	-6.1%	-8.6%	-16.7%	8.2%
IDBI Equity Fund (Gr)	10.9	-6.3%	-7.8%	-1.7%	2.8%
Magnum Equity Fund	14.6	-6.3%	-10.2%	36.5%	16.0%
GIC Growth Plus II	16.5	-6.3%	-14.3%	48.2%	9.8%
Alliance Equity Fund (Gr)	35.1	-6.3%	-12.4%	81.7%	92.0%
Libra Leap	19.3	-6.3%	-10.6%	58.3%	32.9%
Zurich(I) Equity (Gr)	19.4	-6.4%	-9.7%	25.1%	13.8%
Grandmaster 1993	9.3	-6.8%	-10.5%	-25.2%	-2.0%
Sun F & C Value (Gr)	21.4	-6.8%	-9.3%	16.5%	32.6%
Pru ICICI Growth (Gr)	21.8	-7.0%	-11.0%	31.9%	44.9%
GIC D'MAT	8.2	-7.1%	-6.6%	0.0%	-28.7%
JM Equity Fund (Gr)	10.9	-7.3%	-11.2%	-9.5%	2.2%
Primary Equity Fund	15.4	-7.4%	-10.7%	7.2%	8.5%
Boinanza Exclusive Gr	7.3	-7.5%	-7.2%	-21.0%	-3.1%
K 30	18.5	-7.5%	-9.0%	30.6%	43.6%
DSP ML Opportunities (Gr)	9.0	-8.2%	-10.3%	0.0%	1.6%
DSP ML Equity Fund	18.3	-8.3%	-7.0%	6.9%	29.6%
Mastershare Plus 1991	21.5	-10.1%	-8.3%	-15.0%	4.8%
Tata Pure Equity	13.0	-10.1%	-12.0%	39.1%	49.2%
Canbonus	9.9	-10.7%	-10.5%	-20.5%	2.3%
Mastergain 1992	10.9	-10.8%	-10.9%	-13.2%	2.7%
Canexpo	17.2	-12.0%	-14.3%	25.1%	11.2%
ING Growth (Gr)	16.2	-12.7%	-17.2%	46.2%	51.7%
Mastergrowth 1993	17.7	-13.1%	-14.5%	-1.1%	9.1%

(Only funds that have dropped by over 6% in the last week have been included in the above table)

The fall in NAVs has made investors very nervous. This is where the investment objective of the investor and the fund come into play. If the investor has a long-term investment horizon (of over 12 months) the recent slide should not concern him too much. However there are investors who invest in mutual funds much as they would in stocks, in which case the NAV drop would be very disconcerting.

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