Holding steady
The top rankers hold on to their positions, barring one slight change - SBI Multiplier Plus 1993 has improved its rating, while Tata Equity Opportunities has had to settle a notch lower with Gold.
By Muthukumar K, TNN |
The net asset values (NAVs) of diversified equities funds rose by 13.8% during the July-September ’06 quarter. After undergoing a correction in the May ’06 crash, some of the top funds managed 16%-plus returns during the quarter. SBI Contra, SBI Global, Tata Pure Equity, PruICICI Power, DSP Merrill Lynch (ML) Equity and SBI Multiplier Plus 1993 get ET’s Platinum rating for the July-September ’06 quarter.
While there wasn’t much of a change in the top positions, SBI Multiplier Plus 1993 moved up the ratings, Tata Equity Opportunities slipped to Gold as compared to the previous quarter. In all, 66 schemes were rated during the quarter. ET 100 index gave a return of 39.1%.
In the last one year, out of the 66 equity schemes rated by ET only 25 or 38% of the funds managed to outperform ET 100 returns. This is better than the ELSS category where none managed to outperform ET 100 in the last one year. Over a three-year period, 48 funds or 73% managed to outperform ET 100 returns.
Says M Venugopal, fund manager of Tata MF, “Tata Pure Equity is a large-cap oriented fund with 80-95% of its portfolio invested in large caps. Last year, our higher exposure in capital goods and engineering companies paid off. The major driver for equity markets would be corporate earnings growth for FY08, which the market will start factoring in from December ’06.”
In the past one year, Sundaram MF has done well in the equity space. On an average, diversified equity funds gave a return of 33.4%. Among ET-rated funds. Sundaram Select Midcap (60.4%), DWS Alpha Equity (50.1%) and Franklin India Opportunities (47%) gave the highest returns and in that order.
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While Franklin India Opportunities gets a Gold rating, DWS Alpha Equity gets a Silver. In the three-year period, average returns were 215.5% for the category. SBI Contra (419%), SBI Global (433.5%) and Sundaram Select Midcap (364.8%) are the toppers. Both the SBI funds mentioned above have been assigned a Platinum rating while Sundaram Select Midcap gets a Gold rating.For the July-September quarter, the average dividend payout was 13%. Birla Sun Life Frontline Equity (34.2%), UTI Index Select Equity (32.7%), Principal Resurgent India Equity (25.3%) remained the top dividend payers.
Among the ET’s Platinum funds, PruICICI Power (Rs 1,431 crore), SBI Contra (Rs 1,316 crore) have AUMs of Rs 1,000-crore plus.
Going forward, corporate earnings and its growth potential remain key drivers for NAV appreciation of equity funds. At 13000 levels, the market expects action in the mid-cap space. Equity funds managers, who aptly do bottom-up stock picking, could benefit, while factoring in the ‘ifs and buts’ of negative earnings surprises.
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