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
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
31 December 2011
31 January 2012
29 February 2012
30 March 2012
30 April 2012
31 May 2012
29 June 2012
31 July 2012
31 August 2012
TOP 5 FUNDS ON
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
AIG World Gold Fund (G)
Franklin Infotech Fund (G)
ICICI Prudential Technology Fund (G)
Reliance Pharma Fund (G)
SBI Magnum Pharma Fund (G)
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
UTI Banking Sector Fund (G)
Sundaram-Select Thematic Funds-Financial Services Opportunities Fund (G)
Reliance Banking Fund (G)
Reliance Infrastructure Fund (G)
Sahara Banking & Financial Services Fund (G)
The Research Team is part of iFAST Financial India Pvt Ltd
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