Suresh Parthasarathy

The bellwether stock indices may still be struggling to go beyond the peaks reached in January 2008 (they are roughly 16 per cent short).

However, the net asset value (NAVs) of one in five equity mutual funds – ‘diversified schemes’ – managed to edge past their January 2008 levels.

The schemes overweight on consumer, pharma, IT and banking managed to score in the above period. Those who had invested in the rest of the 123 schemes are lagging .

Despite plenty of activity witnessed in the mid-cap space over a year, the honour, by and large, has gone to the large-cap oriented schemes.

Even here, the performances are not uniform.

Some of the schemes struggled to go past their previous peaks, but bigger schemes such as HDFC Equity, HDFC Top 200, ICICI Pru Dynamic and Birla Sun Life Frontline managed to hit new peaks.

In the mid-cap space, ICICI Pru Discovery and DSPBR Small and Mid-cap scored well.

Among the 34 AMCs, only 14 fund houses managed a comeback in at least one scheme. But, schemes that followed thematic approach such as dividend yield and MNC outperformed during this period.

Five of the six dividend yield schemes’ NAVs hit new highs besides a couple of MNC schemes. Birla Sun Life MNC Fund B topped among diversified funds with a 29 per cent absolute return from the market peak till date.

Ms Swati Kulkarni, Fund Manager, UTI Mutual Fund, points out that the large cap stocks have not fallen much as there is perceived value and the downside pressure is slightly lower compared with high beta stocks.

According to the fund manager, in its dividend yield scheme, UTI Mutual went overweight on IT stocks when the price-earnings multiple was quoting at 10-12 times; this PE was lower than the market at that point in time.

The fund beat Nifty as it had more of high dividend yield stocks in its portfolio when compared with the Nifty. According to the fund manager, exposure to stocks in auto, chemical and fertilisers helped.

The reason behind large cap schemes outperforming mid- and small-cap peers could be partially due to fact that they have fallen less during the market meltdown and also managed to bounce back early during the market rally. In the case of mid- and small-cap schemes, the fall in price was steep; despite outpacing the large-cap peers over a year, the steep fall made all the difference.