Mid caps hit close ended diversified equity schemes
Out of total equity investments, the average investment in mid caps is 45.79% against 37.77% in large caps and 16.44% in small cap. MF Investments | More on MF news
By Saikat Das, ET Online |
MUMBAI: The drastic fall in mid cap stocks has impacted close ended diversified equity funds badly. In the last one month, these funds gave a negative return of 14.71 per cent on an average.
Between Oct 7 and Nov 6, the BSE Sensex has fallen from 11809.12 to 8509.56 points, touching a low of 7697.39 on Oct 27. During the same period, the BSE Mid Cap Index declined from 4257.16 to 2966.23 points, touching a low of 2809.49. The fall in Sensex during the one month period is around 16 per cent as against 14.71 per cent fall in the aforesaid fund category. Among the various closed ended equity schemes, ING Dynamic Asset Allocation Fund - Growth was the least hit, with a negative return of 0.36 per cent while the worst performer was Principal PNB Long Term Equity Fund - 3 Year - Series I - growth with a negative return of 24.43 per cent.
According to Hiren Dhakan, fund analyst at Bonanza Portfolio, the average exposure of closed ended diversified schemes is mostly to mid cap stocks which have been beaten down heavily during the market meltdown. This is why schemes did not perform well.
Out of total equity investments, the average investment in mid caps is 45.79 per cent against 37.77 per cent in large caps and 16.44 per cent in small cap, the latest September figures show.
Ten worst hit closed ended diversified equity funds:
Between Oct 7 and Nov 6, the BSE Sensex has fallen from 11809.12 to 8509.56 points, touching a low of 7697.39 on Oct 27. During the same period, the BSE Mid Cap Index declined from 4257.16 to 2966.23 points, touching a low of 2809.49. The fall in Sensex during the one month period is around 16 per cent as against 14.71 per cent fall in the aforesaid fund category. Among the various closed ended equity schemes, ING Dynamic Asset Allocation Fund - Growth was the least hit, with a negative return of 0.36 per cent while the worst performer was Principal PNB Long Term Equity Fund - 3 Year - Series I - growth with a negative return of 24.43 per cent.
According to Hiren Dhakan, fund analyst at Bonanza Portfolio, the average exposure of closed ended diversified schemes is mostly to mid cap stocks which have been beaten down heavily during the market meltdown. This is why schemes did not perform well.
Out of total equity investments, the average investment in mid caps is 45.79 per cent against 37.77 per cent in large caps and 16.44 per cent in small cap, the latest September figures show.
Ten worst hit closed ended diversified equity funds:
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| ICICI Prudential Fusion Fund - IP -�� Growth | -19.3912 |
| HSBC Unique Opportunities Fund - Growth | -19.4752 |
| ICICI Prudential Fusion Fund - Growth | -19.4896 |
| Principal PNB Long Term Equity Fund - 3 Year - Series II - Growth | -20.3762 |
| Lotus India Mid N Small Cap Fund�� - Growth | -20.6657 |
| Lotus India Mid Cap Fund - Growth | -22.2222 |
| ICICI Prudential Fusion Fund - Series II - IP - Growth | -22.4287 |
| ICICI Prudential Fusion Fund - Series II - Growth | -22.4592 |
| ING C.U.B. Fund - Growth | -23.1768 |
| Principal PNB Long Term Equity Fund - 3 Year - Series I ��� Growth | -24.4295 |
Fund schemes with lesser exposure to mid caps have comparatively done well. ���We were expecting market to perform badly and hence we decided to focus on large caps which are dependable during the bad market conditions,��� said Harsha Upadhyaya, equity fund manger, UTI Mutual Fund. He manages UTI India Lifestyle Fund - Growth that has 68.13 per cent exposure to large caps as against 31.68 per cent in small caps. The fund gave a negative return of 10.85 per cent.
Maju Nair, associate vice president, Sharekhan, said, ���one should not panic on such drastic fall in schemes. There is no compulsion of day to day benchmarking in closed ended diversified equity funds. Normally, the fund mangers take 3-5 years time frame to generate returns and take calls on companies which have future potential to emerge as large caps.���
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