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Banking funds steal the show in September
October 14, 2010

The FEFI Update for September 2010


Author : iFAST Research Team



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FII RUSH IN

In September, the BSE SENSEX and NIFTY had gains of 11.67% and 11.62% respectively. The performance of the large caps as seen from the performance of SENSEX and NIFTY was the best in the past 2 years. Most of the broad indices like the BSE 100, BSE 200, BSE 500, CNX 100 and CNX 500 have given returns in the range of 8.55% to 10.77% for September. However, unlike in July and August, the BSE Midcap Index and BSE Small cap Index have given lower returns in September than the broad based indices. The BSE Midcap Index and BSE Small cap Index have given a return of 6.41% and 7.39% respectively.

This sharp run up in the indices was primarily due to FIIs investing aggressively into India. In September alone, the FIIs have pumped in US$5.43 billion which is close to 30% of US$18.37 billion that the FIIs have invested into Indian equity markets between 1 January 2010 and 30 September 2010.

FEFI PERFORMANCE UPDATE

FEFI opened September with 2056.6 points and closed the month at 2181.22 points gaining about 155 points, or up by 7.64% on a month-on-month basis. FEFI has shown an upward trend in September (as seen in Chart 1) as the equity funds on the Fundsupermart.com platform have clearly outperformed the BSE SENSEX in recent months. FEFI rose to the month high of 2193.84 points on 27 September before losing close to 13 points to close the month at 2181.22 points.

Chart 1: Comparative performance of FEFI with SENSEX 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%
31 August 2010 2026.32 10.63% 2.51%
30 September 2010 2181.22 19.09% 7.64%

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

  Sector Month-To-Date Returns

Year-To-Date Returns

ICICI PRUDENTIAL BANKING & FINANCIAL SERVICES FUND- GROWTH Banking 13.73% 39.16%
UTI BANKING SECTOR FUND- GROWTH Banking 13.45% 43.56%
SUNDARAM BNP PARIBAS FINANCIAL SERVICES OPPORTUNITIES- GROWTH Banking 13.25% 44.09%
RELIANCE BANKING FUND- GROWTH Banking 13.16% 49.34%
RELIANCE QUANT PLUS FUND- GROWTH Speciality 13.05% 21.80%

Banking funds have topped the list for the equity segment in the month of September. The top performing fund from the equity segment was ICICI Prudential Banking and Financial Services Fund. The fund delivered a handsome 13.73% return during the month of September; however, none of the top performing banking funds were able to beat the performance of banking indices, the BSE BANKEX and CNX Bank Index gave 15.05% and 15.07% returns respectively in September.

Reliance Banking Fund is our Recommended Banking sector fund and on Year-To-Date (YTD) basis, this fund has given 49.34%, the highest return for any equity fund in India.


Table 3: Bottom 5 Equity funds on our platform in September
  Sector MTD Returns

Year To Date

Returns
JM BASIC FUND- GROWTH Infrastructure 3.40% -6.84%
AIG INFRASTRUCTURE AND ECONOMIC REFORM FUND- GROWTH Infrastructure 3.08% 12.54%
EDELWEISS ABSOLUTE RETURN EQUITY FUND- GROWTH Speciality 2.97% 13.03%
JM MID CAP FUND- GROWTH Midcap & Small Cap 2.47% 6.80%
JM SMALL & MIDCAP FUND- GROWTH Midcap & Small Cap 1.95% 6.77%

The bottom performing funds from the equity segment in the month of September comprised primarily of Infrastructure followed by mid-cap and small-cap funds. However, on the positive side, none of the bottom performing funds has given negative performance in September.

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FEFI Closes FY 2009-2010 with a Bang!
Small and Mid-cap funds underperform FEFI in February 2010
FEFI falls 3.7% in January 2010
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FEFI rises again after a blip in October
FEFI Update - October
FEFI index methodology.

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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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