FMCG, capital goods, bank funds glitter in June

Even though Sensex gained nearly 2 per cent in June, mutual fund schemes that were exposed to FMCG, capital goods and banks turned out to be winners while global funds as well as local ones biased towards oil & gas and metal stocks turned out to be the laggards. Just about 100 equity schemes managed to beat Sensex’s 1.85 per cent gain in June. This is the highest number of equity funds that beat Sensex in any month whenever the index rose since September 2010. In total, over 300 equity schemes gave positive returns while around 130-odd posted negatives returns in terms of net asset values.

In June, the best scheme in terms of rise in net asset value was ICICI Prudential FMCG (7.38 per cent gain), followed by Magnum Emerging Businesses (5.14 per cent), Birla Sun Life India GenNext (4.98 per cent), Infra BeES (4.69 per cent), Birla Sun Life Buy India (4.67 per cent), Magnum FMCG (4.44 per cent) and Franklin FMCG (4.21 per cent). Schemes like ICICI Prudential R.I.G.H.T., Religare Mid Cap, Sundaram Select Midcap, Axis Tax Saver, UTI MNC and HDFC Premier Multi-Cap have given between 3-4 per cent.

Mutual fund experts point out that sectors such as capital goods (6.2 per cent), FMCG (4.85 per cent), banks (2.22 per cent), power (2.2 per cent), information technology (1.77 per cent) and consumer durables (1.6 per cent) have done well, if one were to track the sectoral indices available at BSE. The performance of funds also reflect the same. For example, banking funds have given between 1.2-3 per cent gains while technology funds have registered between 0.6-2.8 per cent. But FMCG funds, which bet on a defensive sector, are clear winners.

For the last 12 months, FMCG funds are the best performers with over 20 per cent returns. In the two-year period, it is the second best category with Rs 100 invested becoming Rs 200. “Off-late, the FMCG sector has done well on occasions when the market has gone up and when the market has gone down. It is true that despite being a defensive sector, it has done well even when the market has risen,” Sankaran Naren, chief investment officer-equity, ICICI Prudential Mutual Fund.

On the flipside, global funds did poorly in June. The net asset values of funds such as DWS Global Thematic Offshore, Birla Sun Life International Equity Plan A, Mirae Asset Global Commodity Stocks, DSPBR World Mining, AIG World Gold, JP Morgan JF Greater China Equity Off-shore and Hang Seng BeES lost between 3-5 per cent in a single month.

“Globally, there were many events that kept markets volatile. While events like Greece were not new, the volatility was high. This could also be a reason why in the Indian market defensive bets such as pharma and FMCG saw investor interest,” said Ramanathan K, chief investment officer-single manager, ING Investment Management (India).

Apart from global funds, select infrastructure funds such as Canara Robeco Infra, Sahara Infra, HDFC Infra, L&T Infra, UTI Infra disappointed with poor returns. Some mid-cap and small-cap funds like L&T Midcap, HSBC Midcap Equity and Reliance Small Cap lost between 1-2 per cent in June.

Source: http://www.mydigitalfc.com/personal-finance/fmcg-capital-goods-bank-funds-glitter-june-114