MF schemes hit by meltdown

Written by Markets Bureau | Mumbai | Updated: Jan 2 2009, 04:57am hrs
The US financial tsunami has hit all the equity-linked mutual fund schemes in 2008. They have offered negative returns because the equity market went southward following the sub-prime crisis leading to the global meltdown in 2008.

According to Valueresearch, the technology funds were the worst hit due to the US crisis. The technology funds have given a negative return of 59% as the stocks slide. The BSE IT slide 50%, or 2,243 points, and BSE Technology dipped by 51%, or 2,026 points, during the corresponding period.

A senior fund manager from a domestic fund house said that the investors sentiment weakened as the domestic software companies lost a business of more than 30% from the US and other global markets. The dollar and rupee fluctuation also weakened the investors sentiments towards this sector.

After technology stocks, the economic and financial depression have hit the auto stocks the most. The auto funds were the second highest losers. They have given a negative return of 53% whereas the auto stocks have dipped by 57%, or 3,271 points, in the calendar year 2008.

Similarly, the banking funds have been hit. The banking funds have given a negative return of 52% as against BSE Bankexs similar loss of 52%, or 6,055 points.

However, the Sensex based funds have performed better compared to the benchmark index. The Sensex based schemes offered a negative return of 48% whereas the Sensex shed 52%, or 10,653 points, in the 2008.

The pharma and FMCG funds have comparatively performed better than other funds. Both pharma and FMCG funds have given a negative return of 34%. Contrary to this, BSE Healthcare has shed 32% and BSE FMCG has lost 16% during this period.

A senior analyst from a domestic broking firm said that the global meltdown has impacted the domestic market across the board. Allthe sectoral stocks have lost steam leading to the negative return of these sectoral funds, he said.