Of a total 266 open-ended equity schemes, over 89% of the schemes have given negative returns in the last one year.
Of a total 266 open-ended equity schemes, over 89% of the schemes have given negative returns in the last one year. Of 238 schemes, which have lost money for investors, 108 equity schemes have given negative returns in excess of 10%, with HSBC Infrastructure Fund giving the worst returns at 41.11% in the last one year, show the data from Morningstar.
The worst performance of the schemes came from infrastructure sector, small- cap funds and mid-cap funds. 23 mid-cap schemes and 15 small-cap schemes gave negative returns in the last one year. The returns are as on February 14, 2019.
Several large-cap funds such as Quant Focused Fund, IDBI India Top 100 Equity fund and SBI Bluechip Fund were laggards among the large-cap category, giving negative returns in the range of -5.87 to -10.77%.
Out of the 32 large-cap schemes, 27 schemes have given negative returns against S&P BSE 100 India TRI, which have given returns of 1.47% in last one year.
While in the mid-cap segment, schemes such as UTI Mid cap and Aditya Birla Sun Life Midcap Fund have dipped by 18.74% and 18.51%, respectively, in the last one year. The S&P BSE Midcap TRI index has given returns of -15.62% in last one year and only 12 schemes have done better than the mid-cap index, show the data from Morningstar.
The Sensex is up by 4.4% in the last one year. About 80% of BSE 500 stocks is in the red since the start of 2018.
Categories like technology and fast moving consumer goods (FMCG) are among a few which have given positive returns in the last one year. The data from Morningstar show that S&P BSE IT and S&P BSE FMCG have given returns of 28.03% and 8.01%, respectively, in the last one year.
Fall in the equity markets in the last few months have seen slower average monthly inflows into equity schemes. The data from Association of Mutual Funds in India show that the average monthly inflows into equity schemes in the period of April-January slowed down to Rs 9,557 crore from Rs 14,200 crore in 2017-18. Inflows into equity mutual funds (which include equity, ELSS and arbitrage funds) in January were subdued at `5,082 crore, the second smallest in 2018-19 so far. In December 2018, equity funds had attracted only Rs 4,442 crore, the smallest sum in 27 months.
Market participants also say that investors have started stopping their systematic investment plans (SIPs) in equity funds due to unstable equity markets. A CEO of one of the mid-sized fund houses said: “Despite sharp fall in equity markets in the past few months, investors have continued faith in SIPs. But I fear, in the months to come, we might witness SIPs getting closed as investors start seeing negative returns in their funds.”
High volatility in the equity markets is also one of the reasons investors are stopping their SIPs. The data from Amfi show that the contribution of SIPs stood at over `8,064 crore in January against Rs 8,022 crore in December. In the period between April-January, total SIP contribution is Rs 76,543 crore.
SIPs is an investment plan offered by fund houses wherein investors can invest a fixed amount in a mutual fund scheme periodically at fixed intervals – say once a month instead of making a lump-sum investment. SIPs are similar to a recurring deposit where you deposit a small or fixed amount every month. In the past three-four years, there has been a surge in SIPs as equity markets touched new high.
In the fiscal 2016-17, total SIP contribution in the industry was `43,921 crore. It increased to `67,190 crore in fiscal 2017-18, show the data from Amfi.