As many as 14 equity funds outperformed the Sensex on Thursday, as the BSE sensitive index ended with the highest ever single-day gain of 265 points or 5.64 per cent. The IT Fund from SBIMF's sectoral funds emerged as the topper, with the NAV notching up a gain of 6.94 per cent to Rs 19.26. The no-load fund has a minimum investment of Rs 2,000. Had you put Rs 10,000 in Magnum IT on October 6 at a NAV of Rs 18.01, the value of your investment would have vaulted to Rs 10,694 in a single day!

KP Taxplan, the open-end tax planning scheme from Kothari Pioneer was a close second. The fund, which invests at least 50 per cent of its assets in IT stocks, rallied by 6.86 per cent to Rs 14.33. The NAV of Birla Advantage also zoomed by 6.26 per cent to Rs 40.91. This open-ended equity fund from Birla Sun Life AMC also holds around 40 per cent of its assets in IT stocks.

Thus, the top three equity funds clearly show that IT stocks were on the forefront in Thursday's rally. Incidentally, the bull rampage on the bourses occurred on the eve of declaration of Q2 results by IT major Infosys. The trio of IT Magnum, KP Taxplan and Birla Advantage have sizeable exposure to Infosys. Canexpo from Canbank, with a 27 per cent investment in Infosys, also outperformed the Sensex.

``A rally in IT stocks was expected on the eve of Infosys' results. The news of a stable government gave a further fillip to the buying spree at IT counters. With governments increasingly focussing on the IT sector, we expect more sops for the sector,'' said a fund manager. However, the only underperformer (vis-a-vis the Sensex) was the IT fund from Kothari Pioneer. The NAV of the fund rose by 4.96 per cent to Rs 39.36 against the Sensex gain of 5.64 per cent.

On the other hand, FMCG dedicated funds were at the bottom of the heap. While the NAV of KP FMCG rose 4.74 per cent, the FMCG funds from Prudential and SBI rose by 3.74 and 2.74 per cent respectively. These funds grossly underperformed the Sensex since the stocks from this sector did not see any sizeable appreciation. In fact, Cadbury was the only loser among A group stocks on Thursday. Funds with investments in core sector stocks like Templeton, Magnum Contra and Tata Core also failed to record any significant gains.

For those investors who scout for low NAV funds for making investments, Thursday's rally should serve as an eye opener. As many as seven among the 14 funds that outperformed the Sensex have NAVs in excess of Rs 20. For instance, Birla Advantage at Rs 40.91. Or Alliance Tax Relief '96 whose NAV shot up by 5.72 per cent to Rs 55.67. This explodes the myth that a high NAV fund does not have the potential to generate impressive returns.