• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Suresh Parthasarathy

The bellwether indices and stocks that feature in them have notched up significant gains from their low of October 27. But with the rally taking almost everybody by surprise, have equity funds capitalised on the run up in stock prices? Quite a few funds have.

HSBC Emerging Markets Fund, DBS Chola Opportunities Fund, LIC Growth Fund, JM Contra Fund (up 25-27 per cent), are some of the funds, which have seen a substantial improvement in their NAV in this particular rally, though their NAV continues to rule below par. Larger equity funds such as HDFC Equity, Reliance Equity and Reliance Regular Savings Fund have seen a 16 per cent improvement in their NAV in this short span.

Returns on funds such as Sundaram BNP Paribas Entertainment and Escorts Growth were in the single digits, while Reliance Vision, Sundaram BNP Paribas Select Focus and DSP BR Top 100 had moderate gains during the pull back, ranging from 14-15 per cent.

The high cash positions held by some of these funds could have resulted in slightly NAV gains.

While taking cash calls during volatile market conditions helps reduce blips in returns and contains downside, there is a possibility of losing out on opportunities during such a short term rallies.

The steep decline in the equity markets year to date has wiped out significant investor wealth, with NAVs of equity schemes losing between 26 per cent and 77 per cent. Schemes that have a focus on growth stocks, those invested in mid and small-cap stocks and the ones which were fully invested, have suffered the most in comparison to funds that held higher cash position.

The markets touched a three-year low intra-day on October 27.

In the next four trading days, the markets recovered and the benchmark indices BSE Sensex, S&P CNX Nifty and broader index CNX 500 gained 22-24 per cent. But some of the badly beaten down stocks from the realty sector have gained 50-100 per cent in a short span of four trading days.

More Stories on : Mutual Funds | Mutual Funds

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line