The Hindu Business Line : ICRA online rankings — Tax Saving, Index and Debt Funds

IN the first quarter of FY2005-06, as in the previous quarter, this time too, the FMCG sector stole the show among sector funds. While the FMCG funds posted returns close to 17 per cent, BSE FMCG yielded a return of 25.08 per cent. Among the other sectors, IT funds generated a return of 11.07 per cent and pharma of 11.6 per cent.

As for the other categories, the balanced group posted a return of 6.48 per cent for the quarter under study. These funds had posted a return of 0.77 per cent in the previous quarter. MIPs yielded a return of 9.81 per cent on an annualised basis for the quarter under study, vis-à-vis 3.15 per cent in the previous quarter.

Income funds also showed improvement but the leap was not that large. As in the previous quarter, this quarter too saw many Initial Public Offerings (IPOs), with most of them being in the mid-cap segment.

Tax Saving Funds: In this category, 14 funds were present in the one-year category and like last time, SBI Magnum Tax Gain 93 made it to the top this time too. But this time, it reported a shift in sector allocation from electrical and electronic equipment to engineering and industrial machinery.

This fund had the highest exposure in Zee Telefilms Its corpus doubled over the quarter. In the three-year bracket, of the 15 funds, two made it to the top: SBI Magnum Tax Gain 93 and HDFC TaxSaver Fund. HDFC TaxSaver had the highest exposure in Infosys.

Here also, the engineering and industrial machinery sector followed by the electrical and electronic equipment sector dominated the sector exposures. The fund reported a minor increase in corpus and generated a 17 per cent return for the quarter

Index Funds: Starting this quarter, for the first time, among index funds, those following the Sensex were also taken into consideration along with those following the Nifty. These funds' tracking error was computed against the Sensex. In the one-year bracket, 14 funds were analysed and Franklin India Index Sensex Plan was at the top pushing down UTI Nifty Fund.

The top part was dominated by the Sensex-following funds. The Franklin fund posted a return of 12.91 per cent against the Sensex return of 12.73 per cent. Surprisingly, this fund had a very minor decline in corpus, which shows it actually had a very low tracking error.

In the three-year time horizon, UTI Nifty retained its top among the six funds considered. This fund generated a return of 11.76 per cent against the Nifty return of 11.38 per cent. It too reported a minor decline in corpus.

Technology Funds: Seven funds were considered in the one-year time frame, and nine in the three-year time frame. Pru ICICI Technology Fund moved into the top slot, both in the one-year and three-year brackets. It displaced SBI Magnum Sector Umbrella - Infotech from the top in the one-year bracket, and Birla Opportunities Fund in the three-year bracket. i-flex solutions had the highest exposure for this fund. It reported a minor increase in corpus and a 15.06 per cent return.

Marginal-Equity Funds: In the one-year time frame, 30 funds were analysed, of which three made it to the top category. While HDFC MIP LTP and FT India MIP retained their ranks, Pru ICICI Income Multiplier Fund, which came in this time because of the age factor, made it straight to the top. It replaced Deutsche MIP Fund Plan A.

The HDFC fund had 24.29 per cent exposure to equity and 60.16 per cent to debt. It had an average maturity of 1.45 years over the quarter. Also, it reported a minor decline in corpus. The Franklin fund had 19.71 per cent exposure to equity and 64.7 per cent to debt. It had an average maturity of 2.46 years, and also reported a minor decline in corpus.

The new entrant had the lowest average maturity among the toppers at 1.06 years. Its equity exposure was at 21.14 per cent and debt exposure at 56.52 per cent. This was the only one among the toppers that reported a minor increase in corpus.

In the three-year bracket, only eight funds were present, and FT India MIP, a new entrant to the group this time, made it to the top, replacing Alliance MIP.

Long-Term Debt: In the one-year time frame, there were 26 funds and UTI Bond Fund, Reliance Income Fund Retail GP and Deutsche Premier Bond Fund - Regular Plan made it to the top. Of these, only Reliance Income had retained its position, while the other two replaced Tata Dynamic Bond Fund Option A and Deutsche DBF from last time. The average maturity of UTI Bond Fund fell from 3.92 years to 2.93 years.

Its corpus also shrunk by 4 per cent. The fund reported a simple annualised return of 19.43 per cent for the quarter. The Reliance fund reported a return of 7.22 per cent for the quarter and its corpus fell by a significant 17 per cent. The average maturity of the fund rose from 2.15 years to 2.37 years.

The Deutsche fund reported a huge decline in average maturity from 5.27 years to 3.56 years. It generated an 11.58 per cent return for the quarter. The corpus of this fund shrunk by almost 50 per cent.

In the three-year period, 22 funds were analysed, and Kotak Bond Regular and UTI Bond Fund moved into the top slot to displace LIC Bond Fund and Principal Income Fund.

Kotak Bond Regular generated a 6.07 per cent simple annualised return for the quarter. The fund size of the fund fell marginally from Rs 77.05 crore to Rs 73.09 crore, while its average maturity rose from 2.98 years to 3.02 years.

Short-Term Debt: Tata Short Term Bond Fund, Pru ICICI STP and Principal Income Fund STP made it to the top among the 30 funds considered for the one-year time frame. The new entrant was the Principal fund, which dislodged Sundaram Select Debt STAP from the top.

The three toppers generated 8.21 per cent, 6.64 per cent and 6.57 per cent returns for the quarter, respectively. All the three toppers in this category reported a large increase in their corpus over the quarter. Tata reported the highest growth, followed by Principal and Prudential.

Tata's average maturity rose from 109 days to 150 days, while Prudential's fell from 451 to 423 days, and Principal's rose from 390 to 407 days.

In the three-year time frame, JM Short Term, a new entrant, made it to the top, replacing last time topper Pru ICICI STP. The JM Fund reported a small increase in average maturity from 318 days to 325 days. It witnessed a large increase in corpus from Rs 42.24 crore to Rs 188.53 crore.

Long-Term Gilt: In this category, in the one year bracket there was no change at the top. Reliance G-Sec Fund LTP and Templeton India GSF LTP retained their top positions among the 18 funds analysed. The Reliance fund generated an 8.75 per cent return and Templeton a 9.25 per cent return.

While the Reliance fund reported an 87 per cent growth in corpus, Templeton, in contrast, saw its corpus shrink by 16 per cent.

The average maturity for the Reliance fund fell from 1.81 years to 1.57 years. Templeton did not follow the trend, and its maturity rose from 3.96 years to 8.17 years.

In the three-year time frame, Templeton India GSF LTP and UTI Gilt Advantage Fund LTP remained unaltered at the top. The average maturity of the UTI fund rose from 2.091 years to 2.77 years. It generated an annualised return of 6.37 per cent while its corpus shrunk by almost 6 per cent.

Short-Term Gilt: In the one-year time frame, there were 12 funds, and UTI G-Sec Fund STP reached the pinnacle, swapping positions with Birla GPLP.

The corpus of the UTI fund rose by 19 per cent, and it generated a return of 5.67 per cent. Its average maturity more than halved from 51 to 25 days.

In the three-year time frame, again there were 12 funds, and Birla GPLP moved to the top This fund posted a 4.97 per cent return for the quarter while its corpus shrunk by 15 per cent. The average maturity of the fund went up significantly from 23 days to 90 days.

(This is the second and concluding part of the ICRA Online Rankings for the quarter ending June 30.)

(Source: ICRA Online)

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