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Banking funds shine in July August 6, 2010
The FEFI Update for July 2010
Author : iFAST Research Team


Untitled Document

FEFI PERFORMANCE UPDATE

FEFI opened July at 1939.67 points and ended the month with a gain of 1.91% or 37 points (on a month-on-month basis). FEFI showed an upward trend throughout this month rising to the monthly high of 1996.74 points on 22 July, before losing 20 points towards the end of the month. The performance of FEFI on a month on month basis is shown in Table 1 below.

The SENSEX and NIFTY registered gains of 0.95% and 1.04% respectively in July. Most of the broad indices like the BSE 100, BSE 200, BSE 500, CNX 100 and CNX 500 gave returns in the narrow range of 1.21% to 1.51% for July. However, the BSE Midcap Index and BSE Small cap Index gave a return of 3.62% and 3.06% respectively in July. Considering the performance of the market indices and FEFI, we think that the equity fund managers have done an average job in managing the equity funds in July.

Chart 1: FEFI Performance for 2010


Table 1: FEFI Index levels

FEFI

Year-to-date (%)

Month-to-date (%)

31 December 2009 1831.56 - -
31 January 2010 1763.09 - -3.7%
28 February 2010 1745.48 -4.7% -1.0%
31 March 2010 1868.57 2.02% 7.05%
30 April 2010 1916.83 2.58% 4.66%
31 May 2010 1850.36 1.03% -3.47%
30 June 2010 1939.67 5.90% 4.83%
31 July 2010 1976.86 7.92% 1.91%

Table 2: Top 5 Equity funds on our platform in July

  Sector

MTD Returns

YTD Returns

BSL COMMODITY EQUITIES FUND GLOBAL AGRI PLAN- GROWTH Overseas 13.3% -7.2%
RELIANCE BANKING FUND- GROWTH Banking 8.6% 25.8%
SBI EMERGING BUSINESS FUND- GROWTH Midcap & Small Cap 8.4% 19.4%
SUNDARAM BNP PARIBAS FINANCIAL SERVICES OPPORTUNIES- GROWTH Banking 8.2% 19.9%
JM FINANCIAL SERVICES SECTOR FUND- GROWTH Banking 7.9% 13.2%

The BSL Commodity Equities fund – Global Agri Plan fund has rebounded in July with returns of 13.3%. This fund appeared in the bottom 5 performing funds list for three months in 2010 and is one of the bottom performers so far in this calendar year. However, due to the rally in the agribusiness stocks in July on account of good quarterly performance of agribusinesses, this fund has performed well. The benchmark index for this fund is S&P Global Agri business index, which has also given a return of 13.31% in July. The Rupee depreciating by 0.06% in July hasn’t made much difference to the performance of overseas funds.

The banking sector funds have taken three slots in the top 5 performing funds. The BSE Bankex and CNX Bank Index have given 7.19% and 7.36%. Banking stocks have rallied on account of strong year n year growth of 22.3% in non food credit off-take as on  which is higher than RBI’s projection of 20% for FY 2010-11 and this is further aided by expectations of continued growth in credit off-take despite rate hikes by RBI.


Table 3: Bottom 5 Equity funds on our platform in July

 

Sector

MTD Returns

YTD Returns

RELIANCE PHARMA FUND- GROWTH Pharmaceuticals -2.5% 18.9%
UTI PHARMA & HEALTHCARE FUND- GROWTH Pharmaceuticals -4.0% 17.3%
SUNDARAM BNP PARIBAS SELECT THEMATIC FUNDS ENTERTAINMENT OPPORTUNITIES- GROWTH Speciality -4.1% -1.0%
SBI MAGNUM SECTOR FUND UMBRELLA-PHARMA- GROWTH Pharmaceuticals -4.3% 12.1%
BSL COMMODITY EQUITIES FUND GLOBAL PRECIOUS METALS PLAN- GROWTH Overseas -7.2% -2.3%

The BSL Commodity Equities Fund – Global Precious Metals fund has underperformed its benchmark, the Dow Jones Precious Metals Index by a huge margin. The Dow Jones Precious Metals Index fell 3.8% in July. This was led by the fall in Gold commodity prices to the tune of 4.93%.

After being one of the best performing sectors in 2010, the Pharma sector stocks witnessed some profit booking in July, with  the BSE Healthcare index falling by 2.64% during the month. This has led to the Pharma funds dominating the bottom performing list in July.

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iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's offer document/scheme additional information/scheme information document. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer in the website.

 


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