Year 2005 was a year of bounty for the equity fund investors. And this year is proving to be even better. Equity markets have surged in the first few months, taking the reward for fund investors even higher.

An average diversified equity fund gained 21.04% in the first quarter of 2006 (January to March). The Sensex gained less at 20.03% during this time period. Of the 145 funds, 84 have managed to beat the Sensex.

Tax planning funds managed a 19.12% return, lower than the Sensex gain of 20.03%. 

Here we list the best and worst funds this year.

- The data is as on March 31, 2006.
- The returns are stated in percentage terms.
- We rank mutual funds according to stars (one being the lowest and five being the highest). This rating takes into account risk and returns. New funds are not rated.

Diversified equity funds

These are funds that invest in stocks of various companies in various sectors.

Average return of the first quarter: 21.04%
Average one-year return: 75.84%

	Q1 return	1-year return	Rating
The best
Sundaram CAPEX Opportunities-D	34.34	-	Not rated
Tata Infrastructure	33.84	89.17	Not rated
Tata Select Equity	33.81	91.37	3 stars
The worst
ABN AMRO Dividend Yield	6.59	-	Not rated
Chola Opportunities	6.28	41.97	Not rated
UTI India Advantage Equity	5.29	41.46	Not rated

• Funds that gave a 100% return

Tax planning equity funds

These are diversified equity mutual funds that offer a tax benefit under Section 80C. They are known as Equity Linked Saving Schemes.

Average return of the first quarter: 19.12%
Average one-year return: 75.76%

	Q1 return	1-year return	Rating
The best
Principal Tax Savings	28.61	85.43	3 stars
Principal Personal Tax Saver	25.51	63.76	3 stars
Birla Sun Life Tax Relief '96	24.70	82.36	3 stars
The worst
UTI Equity Tax Savings	14.13	66.52	3 stars
BoB ELSS '96	11.09	53.73	2 stars
Libra Taxshield '96	-1.64	41.74	1 star

• The best tax saving funds

Sector Funds

These are funds that invest in stocks of a particular sector unlike a diversified equity fund that invests in various sectors.

	Q1 return	1-year return	Rating
The best
Reliance [Get Quote] Div Power Sector	30.93	110.18	Not rated
Franklin FMCG	23.21	88.84	Not rated
Reliance Media & Entertainment	22.03	83.45	Not rated
The worst
Kotak Tech	5.35	42.55	Not rated
UTI Banking Sector	1.52	25.90	Not rated
Reliance Banking	-0.06	24.47	Not rated

• How to select a good fund

Balanced Funds

These are funds that invest in equity (shares of various companies in various sectors) and debt (fixed return investments).

Average return of the first quarter: 16.24%
Average one-year return: 52.75%

	Q1 return	1-year return	Rating
The best
Canbalance II	26.78	84.06	4 stars
Kotak Balance	23.29	67.90	4 stars
Tata Balanced	22.55	53.39	3 stars
The worst
HDFC [Get Quote] Prudence	11.75	60.89	5 stars
FT India Life Stage FoF 30s	11.34	38.74	Not rated
HDFC Children's Gift-Inv	8.79	40.91	3 stars