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Suresh Parthasarathy

Investors in equity mutual funds would have had about 16.7 per cent of their holdings shaved off during the January 4-21 period.

But they can still take comfort from the fact that equity funds, till now, have not declined much more than the broad market indices.

While the Sensex and Nifty lost 15 per cent and 17 per cent respectively in value between January 4 and January 21 (NAVs for January 22 weren’t yet available for analysis), diversified equity funds as a category faced a 16.7 per cent erosion, on an average.

This compares favourably to the position in the May 2006 crash, when most equity funds saw much sharper free falls in their NAVs than the index. Six out of every ten funds managed a lower decline than the Nifty in the recent fall, while quite a few funds contained declines to levels much lower than the index.

Some of the diversified funds that registered declines between 10 and 14 per cent in this period were Standard Chartered Premier Equity Fund, Fidelity International Opportunities, HDFC Top 200, Canara Robeco Fortune 94 and HDFC Growth and Core and Satellite, to name a few.

Surprisingly, the theme funds focussed on the infrastructure and power sectors, despite concentrated exposures, haven’t fared poorly against the Sensex. While Reliance Diversified Power shed about 16 per cent in value, JM Basic Fund lost 17.4 per cent.

Both have managed to more or less match index returns in this period.

Because of this, both funds have managed to retain their place among the top performers on a one-year basis. On the other hand, funds with a value and dividend yield bias such as Principal Dividend Yield, UTI Master Value and Tata Equity PE have suffered significant reversals in the meltdown.

In contrast to the picture presented by equity funds, small investors who had taken direct exposure to the equity markets could have lost more than 50 per cent of their wealth in select stocks during this period.

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