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Midsummer nightmare for MF investors

In the month of May none of the equity schemes managed to register a positive return.

india Updated: Jun 01, 2006 14:58 IST

Mutual fund investors will like to forget the month of May as a dark nightmare that robbed them off huge money, as none of the equity schemes managed to register positive return.

The sharp meltdown witnessed in the stocks during the month was seen casting its shadow on the mutual funds as well, which are traditionally considered as a lower-risk alternative for the investors seeking exposure to the markets.

The average one-month return across all the equity fund categories turned negative during the month, while some schemes even surpassed a sharp plunge of more than 13 per cent in the Bombay Stock Exchange's 30-share benchmark Sensex.

Schemes focussed on the auto sector came out as the biggest cropper among all the fund categories with an average one-month return of 13.15 per cent in the red. Ironically, the BSE Auto index registered a gain of 4.60 per cent in May after sailing through the month's volatile tides.

Among the sector funds, the best performance was put forth by banking schemes with an average negative return of 4.36 per cent in the month, better than the fall of 9.07 per cent in the BSE Bankex in the same period.

The mutual fund schemes were seen reeling under the effect of the market meltdown even as the top performing fund in the open ended segment, Principal Global Opportunities registered a negative return of 2.31 per cent.

Sundaram Select Midcap and Quantum Long Term Equity followed Principal Global Opportunities with negative returns of 3.74 and 3.77 per cent respectively.