The year gone by was a pretty lousy one for the Indian mutual fund (MF) industry as assets under management of the industry fell almost 12% in the year. Although the industry gained some lost ground in the debt fund category in December, thanks to corporate pay outs for advance tax, retail participation continued to fall with the markets being choppy. Against this backdrop, a large number of investors withdrew their investments from MFs, leaving fund houses battling to meet redemptions.
The top 10 fund houses, excluding a few such as DSP BlackRock MF and Franklin Templeton , reported a major drop in assets. The ET Mutual Fund Tracker, in line with what we have done over the past several quarters, provides you a performance update of MF schemes across five broad categories of equity diversified, equity tax saving (ELSS), monthly income plans (MIP), equity-oriented balanced and debt schemes.
THE PERFORMANCE REPORT
A total of 286 schemes were analysed this quarter across five broad categories, including equity diversified, ELSS, monthly income plans (MIP), balanced and debt, and graded according to their performances as Platinum, Gold, Silver, Bronze and Lead. Only those schemes, which have been on offer to investors for at least three years, were considered for the risk-return analysis. Unlike the previous quarters, the December 2010 quarter witnessed a lot of reshuffling in the ranking of schemes. In the tax-saving category (ELSS), Canara Robeco Equity Tax Saver and HDFC Tax Saver were the top quartile performers. This is the first quarter in which HDFC tax saving scheme rose to the platinum medallion.
However, a few schemes such as Sahara Tax Gain and Taurus Tax Shield which were ranked platinum in the last quarter slipped in their rankings. In the equity diversified category, popular schemes such as Reliance Regular Savings Equity and Sundaram BNP Paribas SMILE were unable to retain their platinum grades. Both schemes dropped to Silver ranking after figuring in the top quartile for over a year. Among the new entrants, we have two outstanding performers, namely DSP Micro cap Fund and Fidelity India growth, which directly debuted in the Platinum category. However, performance of Reliance NRI Equity (G), Religare Equity, JPMorgan India Smaller Cos and HSBC Progressive Themes was average.
BEST FUND HOUSE
HDFC was the top fund house for the fourth consecutive quarter, followed by IDFC , which managed to come back to this position after three quarters. Reliance AMC, which was among the top three fund houses for a year now, dropped to the sixth position.
BEST FUND HOUSE? HOW WE DID IT
The number of schemes analysed by ET Quarterly MF Tracker varies for each fund house. We consider the percentage of schemes falling under the Platinum, Gold, Silver, Bronze and lead categories for each fund house separately to ensure that there is a level-playing field for all these fund houses. Each of the grades is assigned weights corresponding to their order of importance. Thus, Platinum gets the highest and Lead the lowest of all weights. A weighted average score (WAS) is then arrived at for each fund house and the fund houses are ranked in the descending order of their WAS. Thus, the fund house with a higher percentage (and not number) of total schemes in the Platinum and Gold grades will enjoy a higher WAS compared to the others.
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