india monthly markets update august 2010

Monthly Markets Update - India

August 2010

Prepared by: iFAST Research Team


August 2010

Key Points

• Internationally, most of the markets were weak through August. The Japanese Index witnessed the

maximum fall with a negative return of 7.48%. Developing markets like Thailand and Malaysia lead

the pack with positive return of 6.70% and 4.52% during the month.

• Indian Markets ended flat during the month with the Sensex delivering a return of 0.58%. This was

on the back of strong GDP numbers for 1Q FY 2010 – 11.

• Domestically, the BSE Consumer Durables index was the top performer during the month of August

rising by close to 7% during the month. Banking, FMCG and Auto also did well in August. The

broader markets continued to outperform with the BSE Mid-Cap and BSE Small-Cap indices

returning 2.55% and 2.05% respectively in August compared to just 0.58% return managed by the

BSE Sensex index over the same tenure.

• Foreign Institutional Investors (FIIs) continued to pump money into Indian stocks making a net

investment of INR 11,687 crores (about US$ 2.51 billion) into Indian equities during the month of

August. Domestic mutual funds continued to be net sellers with net sells to the tune of INR 2,817

crores in August.

• The dollar appreciated against most currencies during the month of August and the dollar index was

up by about 2.04% during the month. The rupee closed the month with a fall of 1.27%, even though

FIIs pumped in about US$2.5 billion during the month.

• Yields rose across the board but registered a sharp increase in the shorter end of the yield curve.

The yield on the benchmark 3 month and 6 month paper rose by 42 and 48 basis points respectively

during the month, while the yield of the benchmark 10 year paper hardened by 13 basis points

during the month of August and stand at 7.95%.

• The Indian Economy grew at the fastest pace in the last 2.5 years. GDP growth for the first quarter

which ended in June 2010 (FY2010-11) stood at 8.8% on a y-o-y basis and was in line with the most

economists’ expectation.

• Industrial production growth slowed to a 13 month low in June primarily due to a higher base and

registered a single digit growth of 7.10% y-o-y, lower than consensus estimate of 8.10%.

• Indian fund industry’s assets (average assets under management) increased by a 3.30 % in the

month of August.

• Actively managed diversified equity funds continued to outperform the benchmark index, Sensex on

m-o-m basis, delivering an average return of 2.32% in the month of August.

• Overseas, Speciality, Banking and diversified funds have topped the list for the equity segment and

pharma and diversified funds were the worst performing funds in the month of August.


August 2010

Equity Markets Update

International Markets (As of August 2010 end):

2010 2010 2009 P/E P/E Earnings Growth

Earnings Growth

MTD Return (%) YTD Return

(%) Return (%) Yr 2010 Yr 2011 2010 (%) 2011 (%)

Asia ex Japan (MSCI Asia ex Japan) -1.41% -1.11% 68.30% 13.2 11.9 29.4 11.6

Emerging Markets (MSCI EM) -2.15% -1.96% 74.50% 12.0 10.2 37.0 16.8

Europe (DJ Stoxx 600) -1.58% -1.02% 28.00% 11.0 9.4 37.8 16.2

Japan (Nikkei 225) -7.48% -16.33% 19.00% 15.3 13.8 103.9 10.9

USA (S&P 500) -4.74% -5.90% 23.50% 12.9 11.0 35.0 17.6

Australia (S&P/ASX 200) -1.99% -9.58% 30.80% 11.0 10.3 14.0 7.3

Brazil (IBOV) -3.51% -5.02% 82.70% 12.4 9.7 29.1 27.6

China (HS Mainland 100) -2.67% -6.32% 61.30% 12.9 11.2 23.7 15.3

Hong Kong (HSI) -2.35% -6.11% 52.00% 11.9 10.3 25.6 14.8

India (SENSEX) 0.58% 2.90% 81.00% 18.0 15.0 16.8 20.1

Indonesia (JCI) 0.41% 21.60% 87.00% 15.1 12.6 105.1 19.9

Malaysia (KLCI) 4.52% 11.76% 45.20% 15.3 13.7 12.0 12.0

Russia (RTSI$) -3.95% -1.62% 128.60% 7.4 6.3 68.2 18.4

Singapore (STI) -1.25% 1.82% 64.50% 14.5 12.9 20.0 13.1

South Korea (KOSPI) -0.94% 3.56% 49.70% 9.6 8.8 56.5 8.2

Taiwan (Taiwan Weighted) -1.86% -6.98% 78.30% 12.7 11.4 99.2 12.3

NASDAQ 100 (Technology Heavy) -5.18% -4.99% 53.50% 14.4 12.2 28.2 18.4

Thailand (SET Index) 6.70% 24.32% 63.20% 12.7 11.2 15.5 12.6

Source: Bloomberg, iFAST Compilations All returns are in respective local currency terms and MSCI Index returns are in USD

• Internationally, most of the markets were weak during the month, with the Japanese Index

witnessing the maximum fall with a negative return of 7.48%. Developing markets like Thailand and

Malaysia lead the pack with positive return of 6.70% and 4.52% during the month.

• Japan’s economy expanded 0.1% quarter-on-quarter which is equivalent to an annualised rise of

0.4% in the second quarter of 2010. It was much lower than the market consensus of 0.6% growth,

making the country the worst-performing developed economy in the quarter.

• In 2Q 2010 Thailand grew 9.1% year-on-year, which was much higher than analysts’ expectation of

8.0% growth. In absolute figures, GDP in 2Q 2010 reached a record high of 1.15 trillion THB

extending the evidence that the economy has moved out of recovery phase and is in a sure-footed

expansionary phase.

• Indian Markets ended flat during the month with the Sensex delivering a return of 0.58%. This was

on the back of strong GDP numbers for 1Q FY 10 – 11.

Monthly Markets Update

Domestic Markets (As of August 2010 end):

• Domestically, the BSE Consumer Durables index was the top performer during the

August rising by close to 7% during the month. Over a one year period (as of August 2010), the

BSE Consumer Durables index

72.04%.

• Banking, FMCG and Auto also did well in August,

indices delivering returns of 5.64%, 4.81% and 4.62% respectively during the month.

• The broader markets continued to outperform, with the BSE Mid Cap and BSE Small Cap indices

returning 2.55% and 2.05% respectiv

the BSE Sensex index over the same tenure.

• Consumer Durable sector was

performance by Videocon and Titan Industries which account for appr

the index and gave returns

expectation which lead to strong positive return from bank stocks during the month.

• Crude oil prices ended lower during the month (fell

slowdown would further erode oil demand. This lead to negative return by Oil and Gas Index.

Metal stocks also had a bad month due to weak market sentiments in the product segment and

excessive imports from china.


Domestic Markets (As of August 2010 end):

Domestically, the BSE Consumer Durables index was the top performer during the


BSE Consumer Durables index has been the top performing domestic index surging by close to

Banking, FMCG and Auto also did well in August, with the BSE Bankex, BSE FMCG and BSE Auto


The broader markets continued to outperform, with the BSE Mid Cap and BSE Small Cap indices

returning 2.55% and 2.05% respectively in August compared to just 0.58% return managed by

the BSE Sensex index over the same tenure.

Consumer Durable sector was the best performing sector of the month on the back of strong

performance by Videocon and Titan Industries which account for approx 15% and 40% weight in

of 21% and 5% respectively. Results from banking sector were above


Crude oil prices ended lower during the month (fell by 8.90%) on fears that an economic



from china.

August 2010

Domestically, the BSE Consumer Durables index was the top performer during the month of


the top performing domestic index surging by close to

with the BSE Bankex, BSE FMCG and BSE Auto


The broader markets continued to outperform, with the BSE Mid Cap and BSE Small Cap indices

ely in August compared to just 0.58% return managed by

best performing sector of the month on the back of strong

ox 15% and 40% weight in

of 21% and 5% respectively. Results from banking sector were above


by 8.90%) on fears that an economic




Institutional Flows Into Indian Equity Markets

• Foreign Institutional Investors (FIIs) continued to pump in money into Indian stocks making a net

investment of INR 11,687 Crores (about US$ 2.51 billion) into Indian equities following a US$ 3.5

billion net investment made in the previous month.

• Over the past one year, FII net inflows have been positive every month, except in the months of

January 2010 and May 2010.

• So far this calendar year, FIIs have pumped in close to US$ 12.94

2010. In calendar year 2009, FIIs made a net investment of US$ 17.5 billion in Indian equities.

• Domestic mutual funds continued to be net sellers in the month of August 2010 to the tune of

INR 2,817 Crores.

• So far this calendar year, domestic funds have been net sellers to the tune of INR 15,630 Crores

till the end of August 2010.


Institutional Flows Into Indian Equity Markets

Foreign Institutional Investors (FIIs) continued to pump in money into Indian stocks making a net


on net investment made in the previous month.

Over the past one year, FII net inflows have been positive every month, except in the months of

January 2010 and May 2010.

So far this calendar year, FIIs have pumped in close to US$ 12.94 billion till the end of August


Domestic mutual funds continued to be net sellers in the month of August 2010 to the tune of

endar year, domestic funds have been net sellers to the tune of INR 15,630 Crores

till the end of August 2010.

August 2010

Foreign Institutional Investors (FIIs) continued to pump in money into Indian stocks making a net


Over the past one year, FII net inflows have been positive every month, except in the months of

billion till the end of August


Domestic mutual funds continued to be net sellers in the month of August 2010 to the tune of

endar year, domestic funds have been net sellers to the tune of INR 15,630 Crores


• The dollar appreciated against most currencies during the month of August and the dollar index

was up by about 2.04% during the month. The Thai

in August rising by close to 3% during the month whereas Euro was the weakest and fell by

almost 2.85%

• Thailand’s economy grew by 9.1% year

Strong economic growth coupled with an interest rate hike were positive catalysts for THB,

which emerged as one of the top performing currenc

• The rupee closed the month with a fall of 1.27%

billion during the month.


Currency Update

The dollar appreciated against most currencies during the month of August and the dollar index

% during the month. The Thai Baht gained the most against the greenback


economy grew by 9.1% year-on-year much higher than analysts’ expe


which emerged as one of the top performing currencies in Asia for the month of August.

The rupee closed the month with a fall of 1.27%, even though FIIs pumped in about US$2.5

August 2010

The dollar appreciated against most currencies during the month of August and the dollar index

gained the most against the greenback


year much higher than analysts’ expectation of 8.0%.


in Asia for the month of August.

, even though FIIs pumped in about US$2.5


August 2010

Fixed Income Markets Update

• Yields rose across the board, but registered a sharp increase in the shorter end of the yield curve

as liquidity remained tight throughout the month. The yield on the benchmark 3 month and 6

month paper rose by 42 and 48 basis points respectively during the month, while the yield of

the benchmark 10 year paper hardened by 13 basis points during the month of August and

stand at 7.95%.

• Reverse repo volumes continued to be negative for first half of the month of August, on account

of the liquidity squeeze, but turned positive towards the second half of the month and became

flat towards the end of the month. M3 (broad money) growth fell marginally to 14.8% on 13

August 2010.

• The Debt markets are likely to take cues from the tight liquidity condition owing to the

continuous borrowing programme and any further monetary action in the mid quarter

monetary policy review due on 16 September.


August 2010

Economic Indicators

Economic Releases during the Month of August 2010

Event Period Consensus Actual Prior

India Local Car Sales July - - 158,764 141,184

Industrial Production YoY June 8.10% 7.10% 11.50%

Monthly Wholesale Prices YoY% July 10.40% 9.97% 10.55%

Qtrly GDP YoY% 2Q 8.80% 8.80% 8.60%

Exports YoY% July - - 13.20% 30.40%

Imports YoY% July - - 34.30% 23%

Source: Bloomberg, iFAST Compilations

• Exports growth slowed down dramatically to 13.20% Y-o-Y in July from 30.40% Y-o-Y growth in

the previous month. Whereas Imports grew to 34.30% Y-o-Y in July from 23% Y-o-Y growth in

the previous month.

• July Local car sales hit record high with sales increasing 38% on Y-o-Y basis and 12.45% on MoM

basis. The sales of all firms stood at 158,764 cars in the month of August. In the first four

months of the current fiscal year, car industry growth has averaged 35%.

• The Indian Economy grew at fastest pace in last 2.5 years. GDP for the first quarter ended June

2010 (FY2010-11) is at 8.8% on a y-o-y basis and is in line with the most economists’

expectation. Generally Q1 GDP growth of a financial year lags the Q4 GDP growth of the

previous financial year. However, this time the Q1 has exceed the growth of 8.6% in Q4 of 2009-

10.

• Industrial production growth slowed to a 13 month low in June and registered a single digit

growth of 7.10% Y-o-Y, lower than consensus estimate of 8.10% primarily due to high base. As

expected industrial production growth will continue to moderate in the second half of this year

due to high base effect and with RBI expected to continue its contractionary monetary policy.

• India’s wholesale price inflation fell to a single digit in July, The WPI rose 9.97% Y-o-Y in July

following a 10.55% rise in June. It was far lower than 10.4% which as forecasted by economists.

A year ago, inflation was negative 0.54%. On a monthly basis, WPI climbed 1% in July 2010. The

inflation would continue to trend lower provided the monsoon remains as per expectations.


August 2010

Mutual Fund Industry Asset Trends

• Indian fund industry’s assets (average assets under management) increased by 3.30 % in the

month of August after registering a marginal fall of close to 1.5% in the previous month.

• In absolute terms, HDFC Mutual Fund registered the largest addition in average assets, as the

fund house added about INR 5,550 Crores of assets during the month.

• For the second consecutive month, the largest drop in assets (in absolute terms) during the

month was suffered by LIC Mutual Fund, as the average assets of the fund house plunged by INR

3533 crore in the month of august registering a fall of INR 5,624 crores during the previous

month.

• In percentage terms, Motilal Oswal Mutual Fund saw the largest growth in average assets

(+88.41%) in August, while Deutsche Mutual Fund registered the largest drop in average assets

during the month (-28.40%).


August 2010

Fund Category Returns

Fund Category Returns (as of August 2010)

1 Month YTD 1 Year

Equity: Diversified 2.32 10.55 26.28

Equity: ELSS 2.10 10.34 25.66

Equity: Index 0.87 4.07 15.54

Equity: Overseas 1.36 .027 11.50

Balanced 1.48 8.60 20.57

Debt: MIP 0.49 3.75 7.43

Debt: Income 0.37 3.01 5.01

Debt: Gilt Short Term 0.32 2.53 3.56

Debt: Gilt Long Term 0.27 2.80 4.68

Debt: Floating Rate 0.42 3.14 4.75

Debt: Ultra Short Term 0.43 3.06 4.45

Debt: Short Term 0.36 3.02 4.94

Liquid 0.43 2.78 3.93

Fund of Funds: Overseas 0.16 -0.02 9.10 Source: MFI Explorer, iFAST Compilations

(Excludes Institutional Plans)

• Actively managed diversified equity funds continue to outperform the benchmark Sensex index

on month-on-month basis, delivering an average return of 2.32% in the month of August, while

the Sensex delivered 0.58% over the same tenure. Funds having higher exposure to mid and

small cap stocks outperformed during the month. Y-T-D, diversified equity funds category

delivered an average return of 10.55%, while the Sensex only managed a 2.90% return over the

same period. Meanwhile the BSE Mid Cap and BSE Small Cap indices have risen 13.08% and

14.15% respectively so far this calendar year.

• Balanced funds and Monthly Income Plans (MIP) categories returned 1.48% and 0.49%

respectively during the month of August.

• Though most of global markets were weak, but global thematic funds like Gold fund and

Commodity fund delivered good performance during the month of August with the Equity:

Overseas and Fund of Funds: Overseas categories returning 1.36% and 0.16% respectively

• In the debt segment, Gilt and Income funds underperformed Liquid and Ultra Short term fund

due to the rise in bond yields during the month. Long term gilt funds and Income funds

delivered returns of 0.27% and 0.37 during the month, while short term gilt funds and short

term debt funds delivered average returns of 0.32% and 0.36% respectively in August. Liquid

funds and Ultra Short term funds were the best performing category and they delivered an

average return of 0.43% in August.


August 2010

Top and Bottom Five Performing Equity Funds in August

Top Five Performing Equity Funds on Our Platform during the Month of August

Sector MTD

Returns YTD

Returns

BSL COMMODITY EQUITIES FUND GLOBAL PRECIOUS METALS PLAN- GROWTH Overseas 8.77% 6.31%

SUNDARAM BNP PARIBAS SELECT THEMATIC FUNDS ENTERTAINMENT

OPPORTUNITIES- GROWTH Speciality 7.61% 6.53%

SUNDARAM BNP PARIBAS FINANCIAL SERVICES OPPORTUNIES- GROWTH Banking 6.14% 27.23%

SUNDARAM BNP PARIBAS SELECT THEMATIC FUNDS PSU OPPORTUNITIES- Speciality 6.04% -

BSL INDIA GENNEXT FUND- GROWTH Diversified 6.03% 23.91%

Bottom Five Performing Equity Funds on Our Platform during the Month of August

Sector MTD

Returns YTD

Returns

JM BASIC FUND- GROWTH Infrastructure -1.61% -9.91%

FRANKLIN ASIAN EQUITY- GROWTH Overseas -1.62% -1.86%

BSL INDIA OPPORTUNITIES FUND- GROWTH Diversified -1.90% 4.63%

UTI PHARMA & HEALTHCARE FUND- GROWTH Pharmaceuticals -2.67% 14.14%

MAGNUM SECTOR FUND UMBRELLA-PHARMA- GROWTH Pharmaceuticals -2.68% 9.08%

Source: iFAST Compilations

• Overseas, Speciality, Banking and diversified funds have topped the list for the equity segment

in the month of August.

• The top performing fund from the equity segment was a overseas fund focusing on precious

metals called Birla Sun Life Equities Fund – Global Precious Metals Plan – Growth. The fund

delivered a good 8.77% return during the month of August, this good performance is due to the

run up in the Gold & other precious metals in August. Gold in USD terms went up by 5.63% in

August.

• Both of the media funds have done well in August but only the Sundaram BNP Paribas

Entertainment opportunity fund made it to the top 5 list. The good performance was due to the

regulator setting a deadline of December 31, 2013, for complete migration from analogue to

digital cable services.

• The bottom performing funds from the equity segment in the month of August comprised

primarily of pharma and diversified funds.

• As pharma sector has been one of the best performing sectors in 2010, the pharma stocks and

thus the pharma funds rallied in 2010. However, since July, Pharma stocks are witnessing profit

booking thereby leading to underperformance of Pharma funds.


August 2010

Top and Bottom Five Performing Debt Funds in August

Top Five Performing Debt Funds on Our Platform during the Month of August

Sector MTD

Returns YTD

Returns

CANARA ROBECO INDIGO- GROWTH Speciality 1.6% -

HDFC MF MIP LONG TERM PLAN- GROWTH MIP 1.4% 7.3%

MAGNUM MONTHLY INCOME PLAN- GROWTH MIP 1.1% 5.4%

RELIANCE MONTHLY INCOME PLAN- GROWTH MIP 1.1% 5.7%

Birla Sun Life MIP - Wealth 25 - Growth MIP 0.9% 4.5%

Bottom Five Performing Debt Funds on Our Platform during the Month of August

Sector MTD

Returns YTD

Returns

FIDELITY FLEXI BOND FUND- GROWTH Income -0.1% 1.1%

DSP BLACKROCK BOND FUND- GROWTH Income -0.1% 3.1%

KOTAK BOND REGULAR- GROWTH Income -0.4% 3.2%

KOTAK BOND DEPOSIT- GROWTH Income -0.5% 3.2%

FORTIS MONTHLY INCOME PLAN- GROWTH MIP -2.2% -0.3%

Source: iFAST Compilations

• The top performers from the debt segment during the month of August were Monthly Income

Plans (MIP), making up four of the top five spots. Most of these top performing MIPs in August

were aggressive MIPs, with higher exposure to equities ranging between 15-25% of the

portfolios.

• The top performing fund from the debt segment in August was surprisingly a debt speciality

fund called Canara Robeco InDiGo Fund – Growth, which had concluded its NFO in July. This fund

is an income fund with 10%-35% exposure to gold and since gold has given 5.63% returns in

August, this debt fund has performed well.

• The bottom performing debt funds during the month of August were mostly Income funds. This

can be attributed to the AAA yields going up especially in the securities that will mature in the

next one year.

• The bottom performing debt fund in August was MIP called Fortis Monthly Income Plan –

Growth, which is a moderate MIP fund having about 10% exposure to equities, and in spite of

broad equity market giving positive return the fund deliver a negative return of 2.2% during the

month.


August 2010

Recommended Portfolios Update

1. Conservative Portfolio:

Portfolio Objective:

The portfolio aims to achieve long term capital appreciation by investing 90% into bond funds and 10%

into equity funds. The target allocation may change depending upon our views on financial markets.

Currently we have an overweight position in equities and we target to have an exposure of 80% to bond

funds and 20% to equity funds.

Total Investment: INR 1,00,000 Portfolio Absolute Return since inception:

(Inception Date: 26 Feb 2010) 5.69%

Portfolio Value:

INR 1,05,690

August 2010 Portfolio Return:

0.96%

Portfolio Commentary:

The portfolio gave a return of 0.96% in the month of August. Being overweight on Equity helped

improve the returns on the portfolio, where two equity funds contributed around 66% of the total

portfolio returns during the month. In the Debt segment MTD returns were better than the previous

month but overall the returns in this segment remained low due to the rise in the bond yields during the

month.

All debt funds gave positive returns in the range of 0.31% to 0.57%. The yields on the benchmark 3

month and 6 month paper rose by 42 and 48 basis points respectively during the month, thereby

affecting the returns from short term funds. The debt funds in total contributed 34% of the overall

portfolio return in July.

2. Moderately Conservative Portfolio:







(Inception Date: 26 Feb 2010)

7.78%

Portfolio Value:

INR 1,07,780

August 2010 Portfolio Return

1.30%


August 2010


The portfolio gave a return of 1.3% in the month of August. Overweight position on Equity contributed

to better performance of the portfolio. All Equity funds in the portfolio have outperformed the

benchmark Sensex which delivered only 0.58% on a month-on-month basis. The equity funds

contributed 84% of the overall portfolio returns in August.

In the debt segment all the funds gave positive returns including ICICI Prudential Long Term Plan, which

was in negative territory in the previous month. The best performing funds in the month were floating

rate funds and liquid funds. Also the percentage allocation to floating rate funds and liquid funds is only

20% but each account for 37% returns of the debt portfolio. The debt funds contributed only 16% of the

overall portfolio returns in August.

3. Balanced Portfolio







(Inception Date: 26 Feb 2010) 10.21%

Portfolio Value:

INR 1,10,210

August 2010 Portfolio Return

1.70%


The portfolio gave a return of 1.70% in the month of August, where Equity funds contributed close to

90% of the portfolio returns and only 10% was from the debt segment. In the equity segment, Sundaram

Select Midcap Fund continued to be the best performing fund during the month with a return of 4.08%

outperforming its benchmark BSE Midcap which delivered 2.55% in the same tenure. All equity funds

gave positive returns except for ICICI Prudential Infrastructure Fund, which gave a negative performance

during the month.

In the debt category, Birla Sun Life Floating Rate Fund - LTP and HDFC Cash Mgmt Fund - Treasury

Advantage were the best performing funds. Also the percentage allocation to floating rate funds is only

15% but returns account for 45% of the total returns on the debt portfolio.


August 2010

4. Moderately Aggressive Portfolio:








13.73%

Portfolio Value:

INR 1,13,730


2.15%


The portfolio gave a return of 2.15% in the month of August. Overweight position in Equity helped post a

better performance during the month. The banking sector was one of the best performers in this month

due to good Q1 numbers and some banks choosing to hike their lending rates. All of the equity funds

have outperformed the Sensex except for ICICI Prudential Infrastructure Fund.

The equity portion of the portfolio accounted for 96% of the portfolio returns. Reliance Banking fund

was the best performing fund in the portfolio during the month in absolute terms with returns of 4.91%,

accounting for close to 11% of the portfolio’s total return despite having a 5% weightage in the portfolio.

However, returns from HDFC Top 200 fund have attributed to more than 20% of the portfolio returns,

while the fund has a weightage of 15% in the portfolio. Sundaram BNP Paribas Select Midcap Fund is the

second best performing fund in the portfolio and has attributed close to 19% of the portfolio returns.

Reliance Growth fund although is a midcap oriented fund, its performance has lagged that of the BSE

Midcap Index mainly due to its higher holding of cash to the tune of over 6%

5. Aggressive Portfolio:








17.87%

Portfolio Value:

INR 1,17,870


2.78%


August 2010


The portfolio gave a return of 2.78% in the month of August. All the funds in the portfolio are equity

funds and all of the funds except for ICICI Prudential Infrastructure Fund outperformed the Sensex by a

huge margin. The banking sector was one of the best performers in this month due to good Q1 numbers

and some banks choosing to hike their lending rates

Most of the sectoral and Midcap funds have delivered returns in August in excess of 2.5%. The Reliance

Banking fund has given an absolute return of 4.91% followed by Sundaram BNP Paribas Select Midcap

Fund which has given an absolute performance of 4.08% for August. While, the Reliance Growth Fund,

another midcap fund in the portfolio underperformed other midcap funds because of huge idle cash

lying in the portfolio to the tune of over 6%.

The Reliance Banking fund despite having only 10% weightage in the portfolio accounted for 17% of the

portfolio’s return for August and the diversified funds have accounted for over 44% of the portfolio

returns.

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