MFs focusing on global markets fare better in June

Mumbai, July 7 Investing in global markets seem to have helped withstand the extremely bearish local market conditions for some funds enabling them to give better returns than other sector funds.

Net asset values of some global funds including DSP Merrill Lynch World Gold Fund, Birla Sun Life International Equity Plan A, Sundaram BNP Paribas Global Advantage, Principal Global Opportunities, DWS Global Thematic Offshore Fund fell the least compared with other funds in June.

Although the benchmark index Sensex fell by around 18 per cent in June, these funds have fallen by less than 10 per cent.

“The funds which figure on top in both the periods are generally international funds, funds which partially invest in foreign markets or fund of funds”, said an analyst with a mutual fund.

DSP Merrill Lynch World Gold Fund has given positive returns of 1.30 per cent, while Birla Sun Life International Equity Plan A fell 5.33 per cent, Sundaram BNP Paribas Global Advantage declined 7.31 per cent, Principal Global Opportunities by 8.21 per cent, DWS Global Thematic Offshore Fund by 7.96 per cent, according to the data provided by Value Research.

Global investment

Among the other funds which have invested globally and fallen less than 10 per cent include DSP Merrill Lynch Natural Resources and New Energy fund, whose NAV fell less than eight per cent; it invests a certain portion of its corpus in the equity and equity-related securities of companies domiciled overseas or in units and shares of Merrill Lynch International Investment Funds - New Energy Fund, New Energy Fund and similar other overseas mutual fund schemes.

HSBC Emerging Markets fund witnessed a fall of 8.16 per cent in June, and Tata Growing Economies Infrastructure fund, which invests in infrastructure-related sectors in growing economies overseas and in India, has fallen by 8.94 per cent.

“Though the global markets have been in the negative, Indian markets were amongst the worst performers globally,” said Mr Rajat Jain, Chief Investment Officer, Principal Mutual Fund. In case of the returns over the past six months also most of the above mentioned funds have fallen by less than five per cent outperforming the BSE Sensex, which fell by more than 33 per cent.

Emerging markets have been giving better returns thanks to a mix of factors such as better macro-economy condition, successful outsourcing story and huge commodity business, said a fund manager of a domestic mutual fund.

“Globally we have been amongst the worst performers and since we are comparing these funds with Indian markets, they seem to have performed better,” said Mr N. Prasad, Deputy CEO, Sundaram BNP Paribas Mutual.

Another set of funds which have been amongst the best performers include healthcare and pharma funds, which are considered to be defensive sectors.

The funds include JM Healthcare Sector fund, UTI Pharma & Healthcare fund, Franklin Pharma, Magnum Pharma fund, according to Value Research, which tracks the performance of mutual funds.