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Technology and Pharma Funds outshine in August
September 7, 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 Team



 Banking Funds outclass in June

FEFI PERFORMANCE UPDATE

Unlike last month, the Sensex and Nifty managed to deliver positive returns in August. But the equity market remained directionless due to lack of any policy initiatives. The Sensex started the month at 17257 and closed at 17430 posting absolute returns of 1.12%. This is the second consecutive month of positive inflows from the foreign institutional investors (FIIs). The inflows from the FIIs during the month amounted to Rs. 10803.90.70. On the other hand, the domestic financial institutions (mutual funds) sold equities worth Rs. 1631 in August. FEFI began the month with 1,902 points and ended almost at the same level, registering a minor gain of 6.77 points, up by just 0.36% on a month-on-month basis.

Although the FEFI has underperformed the Sensex on a monthly basis but it has managed to outperform the Sensex on year-to-date basis.

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

 

MARKET UPDATE

Almost half of equity indices on the Bombay Stock Exchange (BSE) delivered positive returns for the month of August.  The returns ranged from -7.74% to 8.26% for all the indices. The BSE Midcap and Smallcap indices failed to outperform the broader indices, i.e., the Sensex and S&P CNX Nifty. The BSE Midcap and Smallcap indices posted returns of -0.12% and -0.82% respectively, whereas the Sensex and the S&P CNX Nifty returned 1.12% and 0.56% respectively.

The sectors sensitive to interest rates underperformed in August mainly due to the absence of any rate cut by the central bank. The market was expecting a cut of at least 25 basis points. Realty, Metal and Banking were the bottom performing sectors. The companies from Pharma and FMCG sectors surged mainly due to defensive buying.

The BSE IT index outperformed the Sensex, delivering 8.26% on a monthly basis. BSE Realty was the  under-performing sector delivering negative returns of 7.74% in August.

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
29 February 2012 1929.56 17.04 4.99
30 March 2012 1922.68 16.62 -0.36
30 April 2012 1902.88 15.42 -1.03
31 May 2012 1797.31 9.02 -5.55
29 June 2012 1895.57 14.98 5.47
31 July 2012 1894.13 14.89 -0.08
31 August 2012 1900.90 15.30 0.36

 

TOP 5 FUNDS ON FUNDSUPERMART.COM

Funds from the Technology and Pharma space were the top performers in August. Out of the top 5 slots, 4 were occupied by Technology and Pharma Funds while the number one slot was occupied by a global gold mining fund.

The fresh hope of another round of quantitative easing and bond buying program by the European Central Bank has helped the gold prices to increase last month. 

AIG World Gold Fund was the star performer for the month of August returning 10.71% on a monthly basis.

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

 
Category
MTD
YTD
AIG World Gold Fund (G)
Global
10.71%
-1.37%
Franklin Infotech Fund (G)
Technology
7.50%
2.39%
ICICI Prudential Technology Fund (G)
Technology
6.09%
12.83%
Reliance Pharma Fund (G)
Pharma
5.69%
24.47%
SBI Magnum Pharma Fund (G)
Pharma
5.53%
27.18%

 

BOTTOM 5 FUNDS ON FUNDSUPERMART.COM

The bottom five slots were dominated by the Banking Funds from the banking sector. The banking stocks underperformed primarily due to an increased pessimism on no rate cut by RBI in its monetary policy meeting.

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

 
Category
MTD
YTD
UTI Banking Sector Fund (G)
Banking
-4.82%
24.93%
Sundaram-Select Thematic Funds-Financial Services Opportunities Fund (G)
Banking
-4.64%
15.57%
Reliance Banking Fund (G)
Banking
-4.51%
-23.04%
Reliance Infrastructure Fund (G)
Infrastructure
-4.23%
9.18%
Sahara Banking & Financial Services Fund (G)
Banking
-4.16%
23.11%

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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