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Nilanjan Dey

Kolkata , Feb. 3

BOUNDARIES are being reworked among equity schemes with banking sector funds dropping to the bottom of the pile and FMCG funds maintaining their lead.

As the latest one-year performance figures indicate, funds dedicated to banking stocks provided an average 29.22 per cent, far below the 70.75 per cent delivered by their FMCG counterparts over the same period.

In between are funds representing other categories such as Equity Linked Savings Schemes (57.43 per cent) and index schemes (45.58 per cent).

The recent pedestrian performance recorded by the banking funds has reflected the scenario prevailing among bank stocks investment circles point out, while referring to the ups and downs in stock prices. However, fund managers say that sectoral developments have lately become more compelling, thanks to reforms initiated by the Government and changes brought about by bank managements.

Says Mr Nilesh Shah, President, Kotak MF, "The banking space has become more uneven, with fine distinctions being made between PSU banks and private-sector entities." The market, he adds, expects banks to shore up its performance in the coming days, which should get reflected in their year-end bottomlines as well. Others underline the likely changes in the sector, including consolidation among players and meeting of capital requirements through new means.

Reliance MF's banking sector scheme has provided 27.48 per cent for the one-year period ended February 1, while a similar product managed by UTI MF has delivered 30.97 per cent during the same period, according to data released by Value Research.

The top allocations by both funds include leading bank stocks — SBI, ICICI, PNB and UTI Bank. For the Reliance scheme, IDBI made it to the top-five list (as on December 31), while UTI Banking Sector Fund had IDFC.

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