Among international funds, the worst hit scheme was Kotak World Gold Fund that gave a negative average return of 10.58 percent
Funds investing in bank stocks have emerged as top performers across all categories of schemes delivering 3.51 percent in one month ended December 3, according to data on Value Research, a mutual fund research firm.
In comparison, during the same period, Nifty Bank Index went up nearly 4 percent. The top 3 banking schemes were Tata Banking & Financial Services Fund that gave 5.68 percent return, followed by Sundaram Financial Services Opportunities Fund and Reliance ETF Bank BeES with 4.80 percent and 4.49 percent average returns, respectively.
Fund managers attributed the rise in returns to better margin performance led by improving credit growth.
“Bank stocks were doing well due to better margin performance led by improving credit growth, lower NPA formation and lagged asset repricing. Asset quality trend was positive, as most banks reported lower GNPA ratios led by lower corporate slippages,” said a fund manager from a private fund house.
“Retail asset quality has held up well and banks do not expect any deterioration barring continued concern on LAP portfolio,” he added.
Asset managers also said the credit growth outlook for banks has improved, underlined by healthy core retail growth and recent liquidity squeeze in NBFCs providing another leg to the growth.
Barring pharmaceutical funds, all other sectoral funds gave returns in the range of 0.32-2.72 percent.
During the period under review, pharmaceutical funds’ category delivered a negative average return of 1.12 percent. In comparison, the Nifty Pharma Index fell 5.06 percent in the one month period ended Dec 3.
Last month investors turned bearish on the sector after pharma major Sun Pharma reported earnings for Jul-Sep disappointed.
The worst hit category across all mutual fund schemes were international funds that delivered negative 4.39 percent average returns in the one month period ended December 3.
“Ructions in the run-up to Britain’s March 2019 departure from the European Union, Italy’s budget-linked standoff with EU authorities and US-China tensions over trade are pressuring global markets and threatening to slow world growth,” said the fund manager of an international scheme.Among international funds, the worst hit scheme was Kotak World Gold Fund that gave a negative average return of 10.58 percent, followed by DSP World Mining Fund with negative 7.95 percent average return and Motilal Oswal NASDAQ 100 ETF gave negative 6.92 percent average return during the review period.