All the 25 mutual fund houses saw returns on their equity fund schemes drop between 16.87%-29.91%. This was a clear reflection of the prevailing weak trend in the equity markets. The BSE's 30-stock Sensex plummeted 2801.92 points (22.2%) to 9810.46 on June 9, 2006 from the record level of 12612.38 on May 10, 2006.
Equity funds of LIC Mutual Fund lead the pack, registering a fall of 29.91% on return during the period under review. The average NAV (net asset value) of two equity fund schemes decreased from Rs 18.08 to Rs 12.67.
Among the two equity fund schemes, the highest decline in NAV was registered in the case of LIC MF Equity Fund-D. The funds NAV declined from Rs 14.67 to Rs 10.28.
Deutsche Mutual Fund was the second biggest loser, showing a fall of 29.1% in returns as its average NAV decreased from Rs 36.35 to Rs 25.75. Among the two Deutsche MF equity schemes, highest decline in NAV was seen in the case of DWS Alpha Equity Fund-G. The NAV of this fund fell from Rs 53.14 to Rs 37.64 during the review period.
R Swaminathan, Associate VP, IDBI Capital, said, "Over heated market was waiting for an opportunity to cool down. The correction started in a broad-based manner irrespective of large cap, mid cap or small cap scrips. The effect of the market downfall has been experienced in the erosion of the net asset value of mutual fund equity schemes."
"At this juncture when the market is volatile, an investor should take stock of his portfolio for a review. He can add some equity funds, provided his asset allocation plan permits. This is the time one can look at the equity funds again for investment with a medium to long-term perspective," Mr Swaminathan pointed out.
Among the 25 MF houses, lowest fall in average return was registered in the case of Franklin Templeton Mutual Fund (-16.87%). The average NAV of eight equity fund schemes slipped from Rs 69.62 to Rs 57.88.
The top 5 MF houses according to the average NAV of equity fund schemes as on June 9, 2006 are Reliance Capital MF (Rs 81.79), Franklin Templeton MF (Rs 57.88), Birla Sun Life MF (Rs 52.50), HDFC MF (Rs 40.78) and Prudential ICICI MF (Rs 34.09). Among these, highest decline in average NAV of equity funds was seen in the case of Reliance Capital MF (26.82%).