It has been a rather interesting run for the equity markets in calendar year 2005. The year began at a time when markets were in the midst of a bull run and investors excitement levels seemed unbounded. After touching record highs, the markets lost steam and how! The unbridled optimism now seems like a thing of the past and investors have adopted a cautious approach.

At Personalfn we decided to study how schemes from the diversified equity funds category have performed on a Year-to-Date basis and determine who the top gainers and losers are.

Winners take it all... Diversified Equity Funds NAV (Rs) YTD MAGNUM EMERGING BUS. 15.17 16.51% MAGNUM GLOBAL 17.80 11.52% RELIANCE GROWTH 123.02 9.00% GIC GROWTH II 21.99 6.59% CHOLA MID CAP 14.97 6.47% FRANKLIN INDIA PRIMA 118.08 6.22% SUNDARAM SEL. MIDCAP 38.60 5.44% MAGNUM CONTRA 15.70 5.29% TAURUS STARSHARE 18.17 4.42% BIRLA MIDCAP 32.43 4.31% UTI THEMATIC MID CAP 13.24 4.00% RELIANCE VISION 86.10 3.79% UTI - DYNAMIC EQUITY 22.67 3.75% KOTAK OPPORTUNITIES 13.69 3.64% PRUICICI DISCOVERY 13.51 2.89% JM EQUITY 18.45 2.32% BOINANZA EXCL 18.42 1.59% PRUICICI EMER. S.T.A.R 12.18 1.58% CANEQUITY DIVERSIFIED 17.39 0.87% HDFC CAPITAL BLD. 35.93 0.74%

Losers take the fall¦ Diversified Equity Funds NAV (Rs) YTD UTI MASTER VALUE* 18.95 -36.67% SUNDARAM INDIA LEADER. 11.12 -18.22% CANINDEX 10.36 -10.77% LIC EQUITY PLAN 12.19 -10.31% SUNDARAM SELECT FOCUS 25.89 -9.50% HSBC INDIA OPPORTUNITIES 12.4 -9.00% MAGNUM EQUITY 14.25 -8.95% DSP ML TOP 100 25.28 -8.68% UTI MASTERSHARE 19.18 -8.67% DEUTSCHE ALPHA EQUITY 24.14 -8.60% UTI MASTER PLUS 30.65 -8.57% HSBC EQUITY 34.28 -8.44% DEUTSCHE INVESTMENT OPP. 11.42 -8.43% FRANKLIN BLUECHIP 59.61 -8.31% MASTERGROWTH 93 23.59 -8.14% TEMPLETON GROWTH 34.68 -7.87% SAHARA GROWTH 23.83 -7.53% BIRLA DIVIDEND YIELD 27.55 -6.84% ING INVEST PORT 17.74 -6.83% SUNDARAM GROWTH 32.13 -6.32%

(Source: Credence Analytics. NAV data as on Apr 29, 2005)
*(The NAV data related to UTI Master Value in the Losers  table is erroneous since a dividend has been declared during the period under consideration; the same has not been factored into the year-to-date returns. We apologise for the same. - May 5, 2005)

Let's start off with the gainers. Magnum Emerging Business (16.51%) emerges as the leader followed by fund house peer Magnum Global (11.52%). Clearly funds investing pre-dominantly in the mid cap segment (for example Reliance Growth (9.00%), Chola Mid cap (6.47%) among others) have clocked impressive growth figures during the period under consideration. The benchmark indices only further corroborate these observations; while the BSE Sensex (which broadly represents stocks of the large cap variety) has shed 7.85%, the S&P CNX Midcap 200 has gained 4.85% during the January 2005 to April 2005 period.

The impressive performances pitched in by funds of the mid cap variety notwithstanding, investors would do well to appreciate the risks associated with such investing. Not only do mid cap/small cap companies tend to be under researched there is a greater chance that you may miss factoring in some reasons not to buy. And even after investing in such companies, regular information is hard to come by.
 

Now for the interesting part - the losers, i.e. funds which inflicted maximum financial damage on their investors. At the top of the table is UTI Master Value (-36.67%); the fund follows the value style of investing and invests in stocks which are currently under valued vis-à-vis their future earning potential. Unlike the top gainers category where funds investing in the mid cap variety ruled the roost, there is no single perceptible trend in the losers category.

Funds with a large cap bias in their holdings, for example Franklin India Bluechip (-8.31%), DSP ML Top 100 (-8.68%) and Sundaram Growth (-6.32%) feature in the list.

Another category on the receiving end is funds of the opportunities variety i.e. ones who have a flexible investment mandate to move across market segments i.e. HSBC India Opportunities (-9.00%), Deutsche Alpha Equity (-8.60%) and Deutsche Investment Opportunity (-8.43%).

While a 4-month time frame is too short to draw conclusions on an equity-oriented asset class, nevertheless monitoring your investments on a regular basis always helps. It can bring out some relevant trends in the investment scenario to the investors notice. Also monitoring investments regularly can help investors assess how well their investments are performing and take necessary corrective measures.

 

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