| NEW DELHI, March 3
NEW DELHI, March 3 India's diversified stock
funds lagged the benchmark index .BSESN in February, as
exposure to mid- and small-cap shares and sectors like capital
goods hurt net asset values.
Diversified funds fell 4.66 percent on an average during
the month, compared with a 2.75 percent fall in the benchmark,
data from global fund tracker Lipper, a Thomson Reuters
"There is no predictability at all, there are no sectoral
moves... sometimes it (market) is getting impacted by global
cues," said T P Raman, Managing Director at Sundaram Mutual
Equity diversified funds with significant exposure to mid-
and small-cap firms bore the brunt as the BSE Mid-cap index
.BSEMC declined 7.2 percent and the small-cap index .BSESC
dropped 7.8 percent in February.
(For category-wise returns table, click [ID:nSGE722043])
Though money managers have reduced exposure to such stocks
in recent months, these companies still accounted for more than
30 percent of assets as of January-end, Morningstar India data
Exposure to capital goods -- a favourite with fund managers
-- which accounted for nearly a quarter of assets, also
affected net asset values as the sectoral index .BSECG fell
8.3 percent during February.
"Funds with higher exposure to realty, healthcare, capital
goods and auto sectors took a harder knock on their chin during
the month," said Dhruva Raj Chatterji, senior research analyst
at Morningstar India.
Among sectoral funds, schemes which bet on pharma stocks
lost 6.9 percent in February, as the healthcare index .BSEHC
posted a drop of 8.32 percent.
Diversified equity funds had 6.6 percent of their assets
allocated to cash at end-January, their highest level since
February 2010, data showed.
Fund managers have increased their allocation to cash, as a
spate of corruption scandals, high inflation and rising crude
oil prices dented sentiment and led to a fall in key indices.
"It appears that some of the funds which took larger cash
calls during the correction may also have buffered themselves a
bit amidst the turmoil," Chatterji said.
BOND, GOLD FUNDS
Indian fixed income funds investing in government debt saw
net values rise 0.67 percent in February, as the yield on the
actively traded benchmark bond IN081322G=CC fell eight basis
points in the month.
India's gold exchange-traded funds (ETFs) gained 3.8
percent in February as the price of the yellow metal jumped on
the back of political turmoil in Libya.
On the continuous charts in India, gold futures MAUc1
ended February at 20,923 rupees per 10 grams, up 5 percent for
(Additional reporting by Neha D' Silva, Editing by Sunil