Mayhem wipes off MF wealth too

Before last week's bloodbath on Dalal Street, Sensex was quoting at nearly 95 per cent above the year-ago levels.

While Finance Minister P Chidambaram looks to mutual funds to salvage the sinking market, it turns out that last week's market mayhem did not spare even MF investors.

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The average returns across all equity and hybrid fund categories turned negative, both on weekly and monthly basis, according to an analysis of one-week and one-month returns for the period ended May 19.

Equity funds were overtaken by the debt and gilt funds in terms of higher weekly and one-month returns after the share markets witnessed a record high one-day fall of 826 points on Thursday followed by another 453-point free fall on Friday.

The fall in the mutual fund returns comes after a strong performance in the recent past, especially from the equity- linked schemes, tracking the sharp record-breaking northward rally in the stock market.

Before the last week's bloodbath on Dalal Street the benchmark Sensex was quoting at nearly 95 per cent above the year-ago levels, while a host of equity-linked MFs were giving one-year return of more than 100 per cent.

While the equity funds are still maintaining a big lead over the debt and gilt funds in terms of one-year returns, the current average one-year returns across the various categories have fallen back sharply from their higher levels a week ago.