Short term bonds deliver average of 4.1 per cent while
large-cap and small-/mid-cap funds category lose 7.9 per cent
According to a Morningstar report, ultra-short,
floating rate ultra-short and short-term bonds category have outperformed the large-cap
and small-/mid-cap funds category during the first half of 2011. The
ultra-short category managed a return of 4.1 percent year-to-date (YTD) followed
by floating rate ultra-short and short-term bond category with four percent
return each thanks to the volatility in fixed income market, led by host of
rate hikes by RBI. However, gilt fund categories which are more susceptible to
bond yield rise landed at the bottom in the fixed income space with 2.3 percent
YTD return.
According to Morningstar, the prime reason for
the outperformance of the bond funds was the reduction in their average
maturity since December 2010 to safeguard themselves from the volatility in
interest rates. Gilt funds category in particular, among all the bond funds,
has tilted its portfolio towards the shorter end of the yield curve at the end
of May 2011.
On the other hand, the large-cap and small-/mid-cap funds category have declined 7.9 percent each over the same period. Among the equity fund categories, large-cap funds were the worst performers as 38% of the funds in the category underperformed the category benchmark index (BSE 100) in first half 2011 whereas over a one year period (ended June 2011) the percentage of underperformers within this category increased to 44 percent.
|
Performance of Fund Categories (in
% as of June 2011) |
||||||
|
Fund |
YTD |
3-mth |
1-yr |
3-yrs |
5-yrs |
|
|
Equity |
||||||
|
FMCG |
10.10 |
13.30 |
21.20 |
25.10 |
17.50 |
|
|
Arbitrage |
3.60 |
2.00 |
7.70 |
6.00 |
6.90 |
|
|
Health |
(0.30) |
6.90 |
10.40 |
26.90 |
19.50 |
|
|
Global Large Cap |
(2.10) |
(2.30) |
19.00 |
4.60 |
6.90 |
|
|
Banking & Financial Serv. |
(5.60) |
(4.40) |
15.30 |
30.60 |
29.40 |
|
|
ELSS (Tax Savings) |
(7.40) |
(0.50) |
4.10 |
13.40 |
12.20 |
|
|
Large Cap |
(7.90) |
(1.50) |
3.60 |
12.80 |
12.70 |
|
|
Small/Mid Cap |
(7.90) |
2.00 |
2.00 |
14.10 |
12.20 |
|
|
Technology |
(10.60) |
(3.90) |
8.40 |
11.90 |
11.90 |
|
|
Power |
(11.20) |
(2.00) |
(6.30) |
8.20 |
23.10 |
|
|
Asset Allocation |
||||||
|
Conservative Allocation |
1.40 |
1.40 |
5.50 |
8.8
| ||
