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Growth funds reel from market shock

Sep 25, 2000

With the slide in equity markets escalating, diversified growth funds are reeling from the shock and are witnessing their net asset values (NAVs) take a tumble.

Open-ended, Growth Schemes NAV
BSE - 30   -9.7% -4.8% -10.1% -
S&P CNX Nifty   -8.7% -3.9% -4.3% -
S&P CNX 500   -10.4% -3.4% -4.2% -
Mastergrowth 1993 18.0 -9.0% -4.6% -4.2% 9.1%
JM Equity Fund (Gr) 10.8 -9.1% -4.3% -15.5% 2.1%
Alliance Equity Fund (Gr) 37.1 -9.1% -0.2% 44.5% 87.5%
Taurus Starshare 9.0 -9.1% -3.3% -1.4% -2.6%
DSP ML Equity Fund 17.5 -9.5% -5.3% -5.8% 26.3%
Birla Advantage Fund 38.7 -9.7% -6.1% 18.4% 33.8%
Libra Leap 19.3 -9.9% -4.5% 25.3% 31.3%
Sun F & C Value (Gr) 20.5 -10.1% -5.5% -3.3% 29.1%
IL&FS Gr & Val (Gr) 13.3 -10.9% -6.8% 0.0% 9.4%
Sun F&C Emerg Tech (Gr) 6.3 -11.6% -6.4% 0.0% -27.0%
Magnum Global Fund 11.2 -12.3% -4.3% -12.1% 4.1%
Magnum Equity Fund 14.7 -13.6% -0.2% 7.3% 15.7%
ING Growth (Gr) 17.5 -13.7% -7.1% 32.5% 52.7%
Zurich(I) Capital Builder 10.7 -17.8% -16.9% -23.7% 2.0%
Zurich (I) Top 200(Gr) 13.0 -20.4% -17.9% -30.5% 12.5%

The table above tells everything. Most of the funds in our sample have underperformed all the benchmark indices, which is a testimony to how difficult fund managers have found coping with falling stock prices subsequent to the crude shock.

As is the case with every rise and slide these days, software stocks have been in the limelight. And as most diversified growth funds are heavily biased towards software, their NAVs have drifted downwards…and fast.

However subsequent to the fall in prices, software stocks are attractively places as far as valuations are concerned, and this could trigger some buying interest. Another trigger could be in the form of quarterly results, which software companies will be announcing by the first week October.

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