The markets have lost about 10% from its peak in the last month and a half. We looked at the funds which have lost the maximum in the last 30 days. Five out of the 10 hardest hit mutual funds are banking sector funds. The reason for their fall is obvious – banking has been hit hardest from by the fallout of the PNB scam.
One other sector fund hit by the recent fall is HDFC Infrastructure which is also significantly exposed to financial stocks.
The remaining four are diversified funds including large-cap behemoth HDFC Equity Fund, LIC Equity Fund, Reliance Taxsaver and Reliance Vision Fund. We examine these funds in more detail:
|Fund||One Month Returns|
|Kotak PSU Bank ETF||-17.5%|
|Reliance ETF PSU Bank BeES||-17.54%|
|LIC MF Banking and Financial Services Fund||-10.15%|
|HDFC Infrastructure Fund||-8.08%|
|Reliance Taxsaver (ELSS Fund)||-7.04%|
|Reliance Vision Fund||-6.45%|
|HDFC Equity Fund||-6.23%|
|LIC MF Equity Fund||-6.18%|
|Sundaram Financial Services Opportunities Fund||-6.10%|
|SBI ETF Nifty Bank Fund||-6.00%|
Source: Value Research, Data as on 8th March 2018
HDFC Equity Fund (Category: Equity Large-cap)
This long-standing fund (around since 1995) managed by the legendary Prashant Jain tilts heavily towards banking. Financial stocks account for 37% of its portfolio compared to 31% for the Nifty 500, its benchmark. ICICI Bank is its top pick and SBI is at third position accounting for 10% and 9.4% of assets respectively. The fund has been struggling with flagging investor confidence for quite some time but Prashant Jain’s loyal follower-base provides a bedrock of support.
Reliance Tax-saver (Category: ELSS)
This fund, interesting enough, is not banking heavily. However, it does have large positions in Tata Motors and Tata Steel both of which have suffered heavily in the recent rout as the JLR story wanes and the metals sector sinks. However, its performance is still ahead of its benchmark (S&P BSE 100) over the last three and five years with annualized returns of 5.7% and 21.44% over those time periods. The 5.7% figure is quite dismal but is a result of a high base effect and market euphoria in early 2015.
Reliance Vision Fund (Category: Equity Large-cap)
This fund combines a large banking exposure with a significant exposure to Tata Steel and Tata Motors. Its top five holdings are SBI, TVS Motors, Tata Steel, ICICI Bank and Tata Motors in that order. These collectively account for 37% of the fund’s portfolio. The fund has however beaten its benchmark over both the last five and ten years with annualized returns of 16.86% and 9.63% respectively.
LIC Equity Fund (Multi-cap)
This one’s a serial underperformer delivering 5.6% compared to 13.9% by its benchmark, the Sensex over the past year. The three and five-year story is no better with the benchmark-beating the fund, every single time. ICICI Bank is its top pick at 6.3% of portfolio followed closely by PNB at 5.5% of the portfolio.