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Last Updated : Nov 02, 2019 05:10 PM IST | Source: Moneycontrol.com

Mutual funds wrap: Infosys whistleblower complaint dents October returns of IT-related schemes

Infosys whistleblower letter largely dented returns of IT funds last month.

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All scheme categories in the equity segment have delivered positive return in October barring funds-related to information technology (IT).

Among all, the best performing category was pharmaceutical funds. This category delivered an average of 7.24 percent in returns last month.

In comparison, S&P BSE Healthcare Index rose 6.46 percent.

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The second best performer were the banking-related mutual fund schemes that fetched 5.87 percent average returns during the review period.

Corporate earnings faring better than what most analysts' had predicted, along with less negativity in management commentary for the upcoming quarters, led to optimism among investors over earnings and market returns and helped most of the sectors to add gains, according to the fund managers.

Infosys whistleblower fallout

The worst performer across all scheme categories were IT funds that delivered negative 0.55 percent average returns during the review period.

However, it managed to outperform the BSE IT Index, which fell 2.53 percent last month.

According to fund managers, Infosys' whistleblower letter largely dented returns of IT funds last month.

On October 22, shares of the IT bellwether company plunged over 15 percent, registering its biggest fall in over six years on the stock market after anonymous whistleblowers accused the Chief Operating Officer Salil Parekh and Chief Financial Officer Nilanjan Roy of "unethical practices."

Concerns had emerged whether any person or group of people, who knew about the whistleblower's letter to the board of Infosys, bought put options in the equity derivatives segment.

These put options would have fetched large profits during that week since the share price fell steeply in reaction to the revelation of the letter.

A board member of Infosys had received the whistleblower letter on September 30. But it was only on October 21 that the company disclosed to the market the fact that such a letter was received, but without providing details of the letter's contents.
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First Published on Nov 2, 2019 05:10 pm
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