Pharma sector fund made a leap to the top followed by diversified and petroleum sector funds. Debt fund categories returned more or less in line with that of the previous week, with monthly income plans again topping the charts.
Equity fund categories rode on the back of the continued surge in equity markets. For the week ended December 2, 2005, Sensex gained 73 points to close at 8961.61, while the broader Nifty advanced 14.50 points to settle at 2,697.95.
The upsides have been mainly driven by institutional buying support. FIIs have been net buyers in equities to the tune of Rs 4038.7 crore (Rs 40.38 billion) November 2005, while domestic mutual funds bought Rs 580.24 crore (Rs 5.80 billion).
Pharma funds topped the table for the last week with returning 3.14 per cent. In comparison, the previous week returns amounted to 2.13 per cent.
Leading healthcare stocks such as Ranbaxy, Cipla and Sun Pharmaceuticals recorded gains last week, which helped improve the performance of pharma sector funds.
Diversified funds (2.35 per cent) and petroleum sector funds (2.35 per cent), turned in the next best performances, while banking sector funds were at the bottom of the table and barely avoided ending up in negative territory.
Equity fund performances over a one-year period continued to be attractive too. FMCG funds were the best in the business with an annual return of 65.14 per cent, followed by tax-planning funds (57.02 per cent) and diversified funds (51.67 per cent).
Auto sector funds posted 48.77 per cent, while petroleum sector funds came last with a return of 19.05 per cent.
Despite worries in some quarters about the valuations of Indian markets, fund managers continue to be bullish. Says, S Naren, co-head of equities at Prudential ICICI Mutual Fund, "We are bullish on the Indian markets from a long-term perspective. However, we are cautious in the short-term, given that the valuations in the case of some stocks look stretched."
According to Naren, markets will reward long-term investors, as growth momentum in India continues. "We believe that other than oil price (which can give a negative surprise) and interest rate shocks, the local economic indicators will be very good for the next few quarters. Hence, volatility would be primarily dependent on external factors and oil," he adds.
Debt fund performances continued to be stable. MIPs continued to lead the weekly table with a return of 0.40 per cent, followed by short-term funds (0.11 per cent). Long-term gilt funds (0.08 per cent) were the worst performers on a weekly basis. On a 12-month basis too, MIPs led the table.
Their average returns for the past year amounted to 10.26 per cent. Short-term funds (5.95 per cent) were the second-best performers, followed by medium-term funds (5.76 per cent) and floating rate funds (5.64 per cent). Short-term gilt funds came in last with 4.38 per cent.
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