As the year 2011 comes to an end, income funds have emerged as major gainers due to declining bond yields while weak equity markets led to a plunge in the returns of equity funds.
Income funds and the ultra-short fund category have registered a return of close to 9 percent while the liquid funds category has gained 8.3 percent. The decline in the benchmark yield of late, following the recent pause in the rate hike by RBI, and easing of inflation have had a significant impact on the performance of income funds. Gilt fund category has generated an average return of 6.82 percent against its benchmark average return which has gained 7.36 percent.
In the equity categories: sector funds, equity oriented FoF and balanced funds failed to outperform their respective benchmark average return. On the other hand, global/overseas and dividend yield funds category contained their losses significantly against their benchmark. Sectors funds, especially infrastructure, power and banking saw their value decline as equities from these sectors saw their margins shrink due to increasing operating cost and interest rate. Besides, global/overseas funds benefited from the depreciating Indian rupee. Equity diversified category contained losses marginally against its respective benchmark as compared to mid- and small-cap funds category which were the most beaten down segment.
|
Category |
YTD (As on 22 December 2011) |
|
|
NAV Average Return (%) |
Benchmark Average Return (%) |
|
|
Income Fund |
8.84 |
7.57 |
|
Ultra-short Fund |
8.81 |
8.10 |
|
Liquid Fund |
8.33 |
6.49 |
|
Gilt Fund |
6.82 |
7.36 |
|
Arbitrage Fund |
5.69 |
3.23 |
|
Asset Allocation Fund |
2.82 |
(8.94) |
|
Capital Protection Fund |
2.09 |
(0.05) |
|
MIP |
1.82 |
2.17 |
|
Overseas FoF |
(5.49) |
|
|
Balanced Fund |
(9.43) |
(7.08) |
|
MNC Fund |
(9.93) |
(12.51) |
|
Equity Oriented FoF |
(13.13) |
(6.06) |
|
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