performance, uncertainty over the pace of rate cuts has led to a drop in assets
in gilt funds.
funds which invest in government securities have posted over 3.1% over the
quarter ending June 2012, outperforming 22 other categories of funds, shows
CRISIL latest report. This was mainly due to softening of yields on the back of
the Reserve Bank of India (RBI) repo rate cut by 50 basis points to 8 % in its
Annual Monetary Policy for 2012-13 in April 2012.
gilt fund assets under management dropped 5% from Rs 3442 crore in April to Rs
3266 crore in June 2012 mainly due to uncertainty about the pace of rate cuts
by RBI. Investor interest was muted due
to a pause in rate cut by RBI in June even though gilt funds outperformed other
yields and prices move inversely, i.e., when yields fall, prices/ NAVs (of bond
funds) rise and vice versa. On the other hand, equity funds returned 1.39%
during the quarter vis-à-vis 1.93% by the S&P CNX Nifty and 1.12% by the
S&P CNX 500 Equity Index.
took a shine to income funds (especially dynamic bond funds) which was
reflected by a 33% growth in AUM for the June quarter to Rs 10446 crore from Rs
7812 crore. This category returned 2.66% during the period under review.
Mutual Fund continued to lead the tally of top ranked funds for the quarter
ended June 2012 with 12 funds under CRISIL Fund Rank 1 (same as in the previous
quarter). This was followed by UTI Mutual Fund with 9 top ranked funds (5 in
the previous quarter), ICICI Prudential Mutual Fund with 7 funds (3 in the
previous quarter) and SBI Mutual Fund with 6 funds (7 in the previous quarter).