The month of April has thrown up many surprises, which have been reflected in the performance of both equity as well as some categories of debt funds.
Equity funds' exceptional performance was obviously due to the stock market rally that was led by small and mid-cap stocks. Realty, banks and consumer goods companies emerged as top gainers.
The National Stock Exchange's Nifty gained 15 per cent while the Bombay Stock Exchange's Sensex gained slightly higher at 17.46 per cent. This was Sensex's best monthly performance in the last 10 years. At the bottom of the equity spectrum was the BSE FMCG Index that returned 2.89 per cent.
Among the different categories of equity funds, banking was the top performer. The category on an average yielded 19.47 per cent returns. However, the returns were much lower than the BSE Bankex, which logged a 26.59 per cent rise.
Diversified equity funds posted positive returns for the second consecutive month. They logged a 14.12 per cent gain in April, capturing 80 per cent of
Sensex appreciation. Index funds gained 16.36 per cent while tax planning funds went up by 13.37 per cent.
However, out of the 221 diversified equity funds, just 27 managed to beat the BSE Sensex, while 77 funds were able to better S&P CNX Nifty, which is broader than Sensex
The stock market euphoria was also reflected in the fact that nine diversified equity funds were able to gain in excess of 20 per cent, most of them being mid- and small-cap funds.
Top gainers here were closely bunched and it almost took a photo-finish to find the winner. JM Basic led with a gain of 24.77 per cent, Principal Junior Cap followed closely with a 24.51 per cent and Canara Robeco Emerging Equities finished with a gain of 24.09 per cent.
While none of the diversified equity funds lost, among the lowest gainers were IDFC India GDP Growth (5.59 per cent) and Religare AGILE (5.84 per cent).
Gold ETFs became the only category, whose returns fell during the month by 4.05 per cent this was the second consecutive month of setback for this category.
On the debt fund side, there was some positive surprise for gilt funds and medium-term debt funds in the second half of April. The windfall stemmed from the Reserve Bank of India's initiative to reduce key benchmark rates in its Annual Policy Review.
The 10-year GOI yield fell to 6.23 per cent on 29th April from 7 per cent on 31st March. It also touched a low of 6.09 per cent on 27th April.
This led to some major gains for long-term gilt funds and medium-term debt funds. The two categories clocked 3.67 per cent and 2.88 per cent gains, respectively. In the long-term gilt funds category, ICICI Prudential Gilt Investment PF gained 7.89 per cent. Baroda Pioneer Gilt Fund, with a fall of 0.05 per cent, found itself at the bottom of the chart.
Among medium-term debt funds, ICICI Prudential Income Plan, with 6.08 per cent returns, was the top gainer, while the worst performer, JM Income Fund, actually lost 0.41 per cent.
On the whole, medium-term debt funds with their second-best performance over the last 12 years. Even diversified equity funds with their best performance in last 5 years have given the crisis-hit investing community a reason to rejoice.
