May worst month for MFs so far in 2010
With the debt crisis in Eurozone dragging markets down, equity mutual funds (MFs) have come up with a poor show in May.
By M Allirajan, TNN |
COIMBATORE: With the debt crisis in Eurozone dragging markets down, equity mutual funds (MFs) have come up with a poor show in May. Only two out of the 290-odd diversified equity funds have managed to remain in the green during the month.
This is by far the worst monthly performance in 2010 and comes on the back of a decent showing in March and April when a vast majority of equity funds posted growth. While more than 250 funds made gains in April, all the funds stayed in the positive terrain in March with over 50 funds recording more than 7% growth.
“The uncertainty in Eurozone and the (liquidity) tightening in China contributed to the fall,” says Gopal Agrawal, head, equities , Mirae Asset Global Investments . Except pharma and FMCG, all other equity MF categories remained in the red during May. While technology-focused funds fell the most declining 4%, taxsaver funds and diversified equity MFs dropped 3.6% and 3.5% respectively. Sensex and Nifty declined 3.5% and 3.6% respectively.
Even hybrid schemes with a high exposure to debt posted losses in the month. Riskaversion across the globe due to the deepening Eurozone crisis resulted in foreign institutional investors (FIIs) turning net sellers in May, according to market observers. FIIs net sold stocks worth Rs 12,071 crore during the month, BSE data shows.
In June, the monsoon factor , the most awaited event that directly affects the market sentiment, would come into play, say observers.
The second-worst monthly performance for MFs since the beginning of the market rally came in January 2010 when only five funds managed to record growth.
This is by far the worst monthly performance in 2010 and comes on the back of a decent showing in March and April when a vast majority of equity funds posted growth. While more than 250 funds made gains in April, all the funds stayed in the positive terrain in March with over 50 funds recording more than 7% growth.
“The uncertainty in Eurozone and the (liquidity) tightening in China contributed to the fall,” says Gopal Agrawal, head, equities , Mirae Asset Global Investments . Except pharma and FMCG, all other equity MF categories remained in the red during May. While technology-focused funds fell the most declining 4%, taxsaver funds and diversified equity MFs dropped 3.6% and 3.5% respectively. Sensex and Nifty declined 3.5% and 3.6% respectively.
Even hybrid schemes with a high exposure to debt posted losses in the month. Riskaversion across the globe due to the deepening Eurozone crisis resulted in foreign institutional investors (FIIs) turning net sellers in May, according to market observers. FIIs net sold stocks worth Rs 12,071 crore during the month, BSE data shows.
In June, the monsoon factor , the most awaited event that directly affects the market sentiment, would come into play, say observers.
The second-worst monthly performance for MFs since the beginning of the market rally came in January 2010 when only five funds managed to record growth.
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