A bull rally on the back of foreign fund flows has helped equity-linked mutual fund schemes, except the pharma and technology funds, offer an attractive average rate of return over a one-month period ended on October 9, 2007.
In line with the rise in benchmark and sectoral indices, the average return of the index funds was the highest at 17.02% among all categories of equity funds between September 9 to October 9. The BSE Sensex gained 3061 points, or 19.63%, during the corresponding period.
On the other hand, the pharma and technology funds have given a negative return of 2.90% and 0.21%, respectively, during the corresponding period. Howver, Healthcare Index went marginally up by 83 points, or 2.25%, and IT went up 478 points, or 10.46%, during the said period.
A fund manger from a domestic fund house said that both pharma and IT funds could not perform well because the choice of the stocks was not in accordance with the market rally. However, the strengthening of the domestic currency against US dollar also confused the funds mangers to take a proper decision.
According to Value Research, after index funds, the banking funds have given the second highest returns at 9.65% and auto funds have given an average return of 5.14% during the said period.
According to the market analysts, the decision of the Federal Reserve on September 18 to cut the interest rate has influenced the FIIs to divert their funds from the emerging markets to India. The domestic bourses has witnessed a rally which has helped the BSE Sensex to gain more than 2,000 points between September 19 to till date at 18,658 points. The FIIs have pumped around Rs 18,658 crore since September 19 that has helped the market to set new record. This bull rally has helped the both the major index and a majority of the sectoral indices, except pharma and technology, to touch new records.
Among the other equity linked funds, FMCG funds have given an average return of 4.83% over the last one month horizon.
