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The Annual Report Card

| 4/5/2012 9:00 PM Thursday

FY12 has not been a particularly good year for the markets. Here is a quick bite report of how equity funds have performed in the financial year gone by enlisting together those that have done well as also those that have not done so.

FY2012 has drawn to an end and it wasn’t a really great year for the markets. Though 2012 began on a promising note, clouds of uncertainty are beginning to get darker. Globally the scene isn’t very encouraging and on the domestic front too, an insipid budget coupled with government inaction on the policy initiatives front has pushed the market on a back foot. If playing the market alone is becoming increasingly difficult in such conditions, what should retail investors be doing? As is always said, the best route for retail investors to participate in the equity markets is to take to mutual funds. So, which funds do you put your money into? Here is a primer of how funds have performed over the past financial year and the best and worst of the lot which could be an indicative list of where to look at and what to ignore. However, as they say, past performance is not necessarily an indicator of the future and so one need to exercise great amount of care and caution before making the final decision.

Index

1-Apr-11

30-Mar-12

Change

BSE Sensex

19463

17404

-11%

S&P CNX Nifty

5835

5295

-9%

Average Return of Equity Diversified Growth Funds

-5.30%

 

After a dream run between 2003 and the beginning of 2008, mutual funds have increasingly found it difficult to play the market, especially with dearth of new retail money. A weak sentiment has put tremendous pressure on the performance of funds and that is showing in how they did in FY12 as well. Out of the total 236 equity diversified growth funds on offer to investors, eight have been in existence for less than a year and hence their returns over the financial year are not available. For the remaining 228 funds only 33 (14 per cent) have managed to keep their heads above water. A whopping 83 per cent of the funds or 195 funds to be precise have actually returned a negative performance during FY12. This should not come as a surprise as market conditions during the year have not been very conducive. This is amply visible in the way the two benchmark indices have performed The Annual Report Card FY12 has not been a particularly good year for the markets. Here is a quick bite report of how equity funds have performed in the financial year gone by enlisting together those that have done well as also those that have not done so. Index 01-Apr-11 30-Mar-12 Change BSE Sensex 19463 17404 -11% S&P CNX Nifty 5835 5295 -9% Average Return of Equity Diversified Growth Funds -5.30% SBI Magnum Sector Funds Umbrella – Emerging Buss over the year. The BSE Sensex lost 11 per cent over FY12 while the S&P CNX Nifty was down 9 per cent over the same period. At least equity diversified growth funds as a category have done better than the benchmark indices. Overall the category has yielded a negative return of 5.30 per cent over FY12.

THE PERFORMERS

The Top 5 Performers

1 Yr Return

SBI Magnum Sector Funds Umbrella – Emerging Buss Fund - Growth

12.39

SBI Magnum Global Fund 94 - Growth

9.17

BNP Paribas Mid Cap Fund - Growth

8.08

HDFC Mid-Cap Opportunities Fund - Growth

8.06

Mirae Asset Emerging Bluechip Fund - Growth

6.73

Birla Sun Life India GenNext Fund - Growth

5.42

UTI Wealth Builder Fund - Series II - Growth

5.38

AIG India Equity Fund - Reg - Growth

4.98

Religare Mid N Small Cap Fund - Growth

4.94

Edelweiss Absolute Return Fund - Growth

4.81


Funds from various fund houses have made it to the top during FY12 with not one fund house ruling the winners list. Right on top were two funds from SBIMF. Its Magnum Sector Funds Umbrella – Emerging Buss Fund was right on top having returned 12.39 per cent over the year. Next in line was the SBI Magnum Global Fund 94 which was up 9.17 per cent over the year. Mid caps are normally the worst hit in volatile markets. However the mid cap fund from BNP Paribas has managed to be among the top 10 performers during FY12 having returned 8.08 per cent. Closely following the top three was HDFCs Mid-Cap Opportunities Fund which was up 8.06 per cent over the year. Mirae Asset’s Emerging Bluechip Fund found a place among the top five funds having gone up 6.73 per cent over the financial year and was closely followed by Birla Sun Life’s India GenNext Fund which went up by 5.42 per cent. Funds from UTI, AIG Religare and Edelweiss were the others which managed to find a place among the top 10 performers for FY12. What comes as a surprise is the absence of funds from Reliance among the winners. Credited to being among the best fund house and also among the largest, none of its funds have managed to find a place among the top 10 performers for FY12.

The Laggards

On the losing end were primarily funds from Sundaram, JM and Baroda Pioneer. The JM Core 11 Fund was down 13.86 per cent over the year while its Multi Strategy Fund declined by 14.58 per cent. Sundaram Mutual had three of its fund figuring in the laggards list for FY12. Its CAPEX Opportunities Fund and Media & Entertainment Opportunities Fund were among the worst performers of FY12. Both these funds were down 17.79 per cent and 22.44 per cent respectively. Baroda Pioneer’s Growth Fund and its PSU Equity Fund were the two which figured among the worst performers for FY12. While the Growth Fund was down 13.87 per cent the PSU Equity Fund was even worse; it declined by 18.47 per cent. Among others that have performed badly in FY12 3 were the SBI PSU Fund (down 14.33 per cent), HSBC Small Cap Fund (down 18.34 per cent) and the PRINCIPAL Service Industries Fund which declined by 14.09 per cent over the fortnight.


THE LAGGARDS

The Bottom 5

1 Yr Return

JM Core 11 Fund - Growth

-13.86

Baroda Pioneer Growth Fund - Growth

-13.87

PRINCIPAL Services Industries Fund - Growth

-14.09

SBI PSU Fund - Growth

-14.33

JM Multi Strategy Fund - Growth

-14.58

Sundaram CAPEX Opportunities Fund - Growth

-17.79

HSBC Small Cap Fund - Growth

-18.34

Baroda Pioneer PSU Equity Fund - Growth

-18.47

Sundaram Media & Entert Opp Fund - IP - Growth

-21.61

Sundaram Media & Entert Opp Fund - Ret - Growth

-22.44

 

What has been presented above is just a snapshot of the performance of the funds that did well and those which didn’t do well. It is not just the absolute performance which should determine your ultimate choice of funds to be held in your portfolio. We shall bring to you a more detailed analysis of the reasons why funds have been performing well or otherwise going ahead. Till then it would be better to avoid the above mentioned funds which have not been able to cope up with a volatile market and try to follow those that have done better.

 

Find More Articles on: DSIJ Magazine, MF Special Report, Personal Finance, Mutual Funds

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