PSU equity funds post losses in FY2013

MUMBAI: Equity mutual fund schemes investing in public sector undertakings ( PSU) have lost money in FY2012-2013. There are four such dedicated schemes that invest in PSU stocks across sectors. Baroda Pioneer PSU Equity (-7.41%), Religare PSU Equity (-1.26%), SBI PSU Equity (-7.36%) and Sundaram PSU Opportunities (-8.20%) are the schemes that come with the mandate of investing in shares of public sector undertakings. Numbers in the bracket connote one year returns.

According to Value Research, a mutual fund tracking entity, all four funds put together have Rs 722 crore in assets under management as on December 31, 2012. While Sundaram PSU Opportunities uses CNX PSE Index (-5.27%) as its benchmark and rest of the schemes use BSE PSU index (-11.35%) as the benchmark.

The numbers in the bracket connote performance of the indices in current financial year. "Most of these funds have done better than the broad PSU space by limiting the downside. If you are an existing investor in these funds and a believer in this theme, you should wait for some time to let the portfolio companies perform," says Hiren Dhakan, associate fund manager, Bonanza Portfolio. Divestment process may keep the share prices low for some time and one cannot expect quick recovery. Fresh investments can only be done in these funds if you are a long term investor, adds Hiren Dhakan.