Old schemes underperform Sensex

Mumbai, May 17 | Updated: May 18 2006, 05:30am hrs
Many diversified funds with NAVs above Rs 100 have generated lower than average returns and some have even underperformed the Sensex over the last one year. Most of these funds have been in operation for more than a decade.

The average one-year returns of the top ten schemes having NAVs above Rs 100 works out to 76.53%, which is less than the one-year Sensex (benchmark 30 share BSE index) returns at 81.9%.

Amongst the top three schemes that have generated above Sensex returns are HDFC Equity, Franklin India Bluechip and Reliance growth at 85.72%, 85,17% and 85.09%. With the last weeks volatility in the market, where the Sensex fell by 740 points in just four sessions or almost 5.86%, most of the equity and equity diversified funds were major losers.

On an average last week, high NAV schemes lost almost 5.43%, HDFC Equity Fund happens to be the major loser accounting for a 6.22% drop. HDFC Fund has got net asset size of Rs 3117.45 crore and has a low risk and above average returns grade. The fund benchmarks its portfolio to S&P CNX 500 (Diversified NSE Index of 500 companies). Compared to one-year S&P CNX 500 Index return of 70.33%, the fund has outperformed the index with an annual return of 85.72%.

Whereas others like Reliance Growth Fund, which is handling about Rs 2813.19 crore of net asset, have got the low risk and high return grade. The fund benchmarks its portfolio with the BSE 100 Index.

The fund has outperformed with the one-year fund return of 85.09% as compared to 77.14 return of BSE 100 Index. The fund has got the highest exposure to basic engineering sector at around 12.51% followed by chemical sector at 8.11%.

Amongst the top picks, Bharat Earth Movers has been given the highest exposure of 5.11% followed by Kirloskar Brothers. Reliance Growth scheme, has managed to generate the highest returns since inception. Reliance Growth Fund was launched in October 1995 at Rs 10 per unit.

The fund has given an annual return of 35.17% since inception. HDFC Equity Fund, which was launched before Reliance Growth Fund in December 1994, has got an NAV of Rs 129. It has given an annual return of 25.18% since inception. Whereas the Franklin India Prima Fund, which was launched (in November 1993) quite before Reliance Growth and HDFC Equity funds, has a current NAV of Rs 200.48 next to Reliance Growth.