The Hindu Business Line : Banking sector funds outclass others in second quarter

Mumbai, Oct. 1 While the financial crisis has felled several international banking giants, closer home, it is the banking sector funds that have outperformed all other categories of funds over the last three months.

Seven of the 10 top performing mutual fund schemes during the July-September quarter were banking schemes, including banking ETFs, says data provided by Value Research.

Average return

The banking sector funds have given an average return of 4.72 per cent for the period, while Gold ETFs have given a 4.26 per cent average return. Equity diversified schemes have recorded negative returns of 5.62 per cent, according to the research firm.

The benchmark index, Sensex, was down by 4.47 per cent, and the S&P CNX Nifty down 2.95 per cent during the July-September quarter.

The banking stocks performed well as they had under-performed badly in the months before the quarter, said Mr Satish Ramanathan, Head of Equities, Sundaram BNP Paribas Mutual Fund.

While the BSE-Bankex was up by 9.51 per cent for the three months ending September 30, it had fallen by more than 23 per cent during the first quarter of the financial year.

While Gold ETFs couldn’t give returns as high as banking funds in the three-month period, they have logged the highest returns of all categories during September, as well as for the six months ended September 30.

Debt funds on top

Taking fund performance for the half year, debt funds have performed better than equity funds, as the returns of debt funds in the medium term category was 2.17 per cent, while equity diversified gave a negative return of 19.52 per cent.

Most sector-based funds delivered negative returns; still, they did not do as badly as equity diversified schemes during the same period.

The category average of pharma-based funds was a positive return of 0.83 per cent, but most of the other sector-based funds, including banking funds, gave negative returns

While banking sector funds outperformed all categories in the second quarter, their performance for the first half of the financial year was in fact lower than most of the other sector funds.

While the BSE-Bankex was down 16.05 per cent for the six months ending September 30, the banking sector funds logged in negative returns of 13.01 per cent on an average for the same period.

More Stories on : Mutual Funds | Performance

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