FUND FACTS - MUTUAL FACTS

If the past four years were the best for Indian investors, the past six months could turn out to be the worst. Especially badly hit were sector funds launched by mutual funds to ride the euphoria surrounding a hot sector. If it was software in the late 1990s, infrastructure was a top priority in the recent buM run. What has been the performance of these sector-specific funds over the past one year? Here are the findings.

Winners
Reliance Diversified Power 44%
ICICI Prudential Infrastructure 23%
Tata Infrastructure 19%
Canara Robeco Infrastructure
Return Benchmark & Return
India Power - NA
S&P Nifty - 7%
BSESensex-6%
BSE100-9%
There are 58 sector-dedicated funds available in the Indian market. As many as 17 of these were launched less than a year ago. Only six of the 41 funds have managed to outperform their benchmarks over the past one year while 23 of them have failed to match their own benchmarks. The other 12 funds are benchmarked against specific indices the readings for which are not available in the public domain. Three of the top five funds were infrastructure funds.
The best performance was that of the Reliance Diversified Power Fund which was up 44% in the past one year. This is benchmarked against a lesser known India Power Index. ICICI Prudential Infrastructure Fund was next, with 23% returns, benchmarked against the Nifty which was up 7%.
Third on the list of winners was Tata Infrastructure Fund which was up 19%. It is benchmarked

against the BSE Sensex which was up 6% over one year since 9 June 2007. Canara Robeco Infrastructure Fund returned 14% outperforming its benchmark, the BSE100 Index, which was up 9%. A rather surprising winner among the top five was Reliance Banking Fund which returned 12% on a one-year basis.
The five worst performing funds current-year period are all from the technology space. UTI Growth Sector Fund - Software was the worst with a 29% decline followed by Kotak’s Tech Fund

which was also down 29%. Benchmarked against the BSE-TECK Index, the Fund underperformed its

benchmark returns of -11% over the same period. SBI’s Magnum Sector Umbrella - lnfotech Fund and

ICCI Prudential Technology Fund lost 24% and 23%, respectively. The SBI fund is benchmarked against the BSE IT Index.

1-Yr Return Benchmark & Return
BSEIT - (15%)
-23% BSE Teck - (11%)
which was down 15% and the ICICI fund is benchmarked against the BSE-TECK Index. Franklin

Infotech Fund, also benchmarked against the !SE IT Index, slipped 19%. So, the next time you see

a sector fund, think twice. Fund companies launch these concepts usually at the fag end of the cycle •
The Losers
Franklin Infotech
ICICI Prudential Technology
-19%
SBI MSIJ - Infotech Kotak Tech
L’t /0
BSE IT - (15%)
-29% BSE Teck - (11%)
UTI Growth Sector Fund - Software -29% S&P CNX Software - NA

Tags: MUTUAL FUNDS