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Banking Funds outclass in January
February 24, 2012

We bring you an update on the Fundsupermart Equity Fund Index (FEFI) performance as well as the best and the worst performing funds on Fundsupermart.com.


Author : iFAST Research


 Banking Funds outclass in January

FEFI PERFORMANCE UPDATE

January was one of the better months for Indian equity markets. The Index, Sensex, gained all the way to 17,193 from 15,455 at the end of 2011. The improvement in risk appetite for Financial Institutions globally resulted in the return to emerging market economies. The FIIs had pumped in US$2037 million only in January compared to the outflow of US$ 357 million in 2011. FEFI began the month with 1,647 points and closed the month at 1,838 points gaining 189 points, or up by 11.48% on a month-on-month basis.

As seen in chart 1, FEFI has managed to outperform Sensex on a month-on-month basis. In January, FEFI delivered returns of 11.48% while SENSEX ended the month at 11.25%.

MARKET UPDATE

All the equity indices on Bombay Stock Exchange gave positive returns in January and the returns were in the range of 0.45% to 24.44%. The BSE Midcap and Smallcap indices outperformed the broader indices like Sensex and S&P CNX Nifty; the BSE Midcap and Smallcap indices gave a return of 14.35% and 16.45% respectively, whereas Sensex and S&P CNX Nifty gave returns of 11.25% and 12.43% respectively.

Chart 1: Comparative performance of FEFI with SENSEX since 31 December 2011

Mutual Fund Index

BSE Bank Index has delivered the best returns of 24.44%; except BSE IT, BSE Healthcare, BSE FMCG and BSE Technology Index, all other BSE Sectoral Indices returned more than 10% in January. Interest rate sensitive sector indices like Banking, Real State have done well in January. Metals and Capital Goods were the other sectors which had returned more than 20% in January. Other broad based indices like BSE 100, BSE 200, BSE 500, CNX 100 and CNX 500 also closed in green.

Table 1: FEFI Index levels

  FEFI Year-to-date (%) Month-to-date(%)
31 December 2011 1648.62 - -
31 January 2012 1837.89 11.48 11.48

 

TOP 5 FUNDS ON FUNDSUPERMART.COM

Banking and Infrastructure funds have been among the top performers in the month of January; in fact, after a gap of 5 months, India equity-oriented funds have taken all the top 5 slots. The sectors which were severely beaten down in last one and half year have outperformed in January. The cooling in Inflation since November and CRR (Cash Reserve Ratio) cut by RBI in December have given a sign of relief to interest rate sensitive sectors. The uptrend cycle of interest rate is consequently over after 13 continuous rate hikes.  The positive sentiment about the probable reversal of interest rate cycle has helped sectors like Banking, Real State and Metals. Amongst the top 5 funds, JM Core 11 Fund belongs to flexi-cap category but it has exposure of close to 36% in financial companies and 10% in Metal companies which was amongst top performing sectors in January.

UTI Banking Sector Fund was the top performer in the month of January with 26.20% returns.

Table 2: Top 5 Equity Funds on Fundsupermart.com in January 2012

 
Category
MTD
YTD
UTI Banking Sector Fund (G)
Banking
26.20%
26.20%
JM Core 11 Fund (G)
Multi-cap
24.49%
24.49%
ICICI Prudential Banking & Financial Services Fund (G)
Banking
23.11%
23.11%
Reliance Banking Fund (G)
Banking
22.85%
22.85%
Reliance Infrastructure Fund (G)
Infrastructure
22.61%
22.61%

BOTTOM 5 FUNDS ON FUNDSUPERMART.COM

The bottom five slots were taken by Global Funds; in fact, Global Funds were the top performing funds since October 2011. Indian equity markets outperformed its developed as well as many emerging market counterparts by a good margin in January which was the reason for underperformance of Global Funds having exposure to these economies.  Apart from that, the appreciation of rupee against dollar also hit the performance of Global Funds.

Birla Sun Life International Equity Fund - Plan A was the bottom performer in the month of January delivering negative returns close to 3.11% on a month-on-month basis.

Table 3: Bottom 5 Equity Funds on Fundsupermart.com in January 2012

 
Category
MTD
YTD
Birla Sun Life International Equity Fund - Plan A (G)
Global
-3.11%
-3.11%
DSP BlackRock World Energy Fund (G)
Global
-1.78%
-1.78%
DWS Global Agribusiness Offshore Fund (G)
Global
-1.61%
-1.61%
DWS Global Agribusiness Offshore Fund
Global
-0.93%
-0.93%
ING Global Real Estate Fund (G)
Global
0.45%
0.45%

The Research Team is part of iFAST Financial India Pvt Ltd

Disclaimer: 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 scheme information document including statement of additional information. 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 on the website.Please read our disclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. The name of the Scheme does not in any manner indicate the quality of the Scheme, its future prospects or returns. Please read the Statement of Additional Information and Scheme Information Document carefully before investing.

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