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Banking funds back in the limelight for March
April 19, 2011

We bring you an update on FEFI performance as well as the best and worst performing funds on Fundsupermart.com.


Author : iFAST Research Team



Banking funds back in the limelight for March

FEFI PERFORMANCE UPDATE

The losing trend of January and February was reversed in March with FEFI gaining 7.9%. FEFI began March at 1913 points and closed the month at 2006 gaining 147 points in the month. However, on a Year to Date (YTD) basis FEFI has still shown negative performance and has lost 7.50%. The month’s closing value is the month’s high value. The month’s low value was reached on 18th March.


As seen in chart 1, FEFI has outperformed the BSE SENSEX in the first half of the quarter i.e. between January and March. However, SENSEX has taken the lead after the middle of February. In March, FEFI has given a positive return of 7.90% while SENSEX has given better performance of 9.10% and on YTD basis, FEFI has given a negative return of 7.50% in comparison to -5.19% returns from SENSEX. 

MARKET UPDATE

All the equity indices on Bombay Stock Exchange unlike January and February have given positive performance in March. The BSE Small Cap Index is the index that has gained the least while the BSE Real Estate Index has gained the most at 17.93% on a month on month basis. The SENSEX and NIFTY have gained 9.10% and 9.38% respectively.

Chart 1: Comparative performance of FEFI with SENSEX since 31 December 2010

Source: iFAST Compilations

Even broad based indices like BSE 100, BSE 200, BSE 500, CNX 100 and CNX 500 gave positive returns in the range of 8.57% and 9.16%. The BSE Midcap and Small Cap indices continued their below par performance in comparison to that of SENSEX. The BSE Midcap Index gained by 7.85% and BSE Small cap Index gained by 4.59% in March.

Table 1: FEFI Index levels

FEFI Year-to-date (%) Month-to-date (%)
31 December 2010 2168.51 - -
31 January 2011 1956.11 -9.79 -9.79
28 February 2011 1859.09 -14.27 -4.96
31 March 2011 2005.88 -7.50 7.90

TOP 5 FUNDS ON FUNDSUPERMART.COM

Banking funds are the top performers for the equity segment in the month of March. Banking funds were also the top performers in the month of September and July 2010. The banking stocks rose as the government tabled the banking sector amendment bill in the parliament on 22 March 2011. The key provisions in the bill are:

  • Raise the voting rights of nationalised bank shareholders to 10% from the existing 1%

  • In private sector banks, the voting rights would be on par with investors’ shareholding.

Both these provisions in the bill increase the attractiveness of both public and private sector banking stocks.
The top performing banking funds from September 2010 are also the top performing banking funds for March. However, the ICICI Prudential Banking and Financial Services fund was the best performing fund in September 2010, while Sundaram Financial Services Opportunities fund is the best performing fund in March 2010

. Table 2: Top 5 equity funds on our platform in March 2011

  Category MTD YTD
Sundaram-Select Thematic Funds-Fin Serv Oppor(G) Banking 12.38% -1.15%
ICICI Pru Banking & Fin Serv-Ret(G) Banking 12.31% -1.03%
UTI Transportation & Logistics(G) Speciality 12.25% -8.58%
UTI Banking Sector(G) Banking 11.57% -0.51%
Reliance Banking(G) Banking 10.70% -0.93%

BOTTOM 5 FUNDS ON FUNDSUPERMART.COM

Global funds were the top performing funds in February and have taken a U turn in March. All the five slots in the list have been taken by the global funds. The tsunami in Japan has affected the Japanese market and the global developed markets negatively.
DWS Global Thematic Offshore fund is the bottom performing fund. Close to 38% of the offshore fund (DWS Invest Global Thematic fund) is invested into US and Japan.

Table 3: Bottom 5 Equity funds on our platform in March 2011

  Category MTD YTD
DWS Global Agribusiness Offshore(G) Global -1.30% 4.39%
Fidelity Global Real Assets Fund (G) Global -1.76% 5.07%
Birla SL CEF-Global Multi Commo-Ret(G) Global -2.41% 2.02%
ING Global Real Estate-Reg(G) Global -3.12% 1.89%
DWS Global Thematic Offshore(G) Global -3.43% 0.93%

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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