Midcap and smallcap equity funds have done relatively well this year with 76% of them outperforming the benchmark index. On the other hand, largecap schemes have underperformed with only 62% of them managing to beat Sensex returns in 2010. On an overall basis, 64% equity funds managed to outperform respective benchmark indices. Interestingly, after a rocking performance by equity funds last year (2009) , this year?s performance of equity fund managers has been subdued. In 2009, about 97% of equity diversified funds had outperformed Sensex returns.
?Exposure to financial sector stocks has made a lot of difference in performance, ? said a senior fund manager on condition of anonymity. Financial stocks had taken a beating in the last one month on the back of fake housing loan scams.
In the last one year, while large cap equity fund gave a return of 14.32%, it was 17.78% for mid and small cap funds.
Krishna Sanghavi, Head of Equities at Kotak Mutual fund says, ?when economic growth rates are strong, earnings growth rate of midcap and smallcap companies usually are better than that of largecap companies.? Navneet Munot, CIO SBI Mutual Fund adds, ?Overall strong liquidity conditions has been a positive for the equity market and some of the midcap and smallcap stocks have rallied on the back of positive investor sentiments.?
DSP BlackRock Micro Cap has been the top performer for the year in the midcap and smallcap space giving a return of over 44%. Among the largecap schemes, ICICI Prudential Focused Bluechip Equity was the top performer with return of over 23% in the last one year.
