CRISIL Mutual Fund Ranking Booklet Mar 2011indd.indd

Mar 31, 2011 - CRISIL. Fund Rank. Dec - 10. Mean. Return. Volatility. Asset. Size. DRP. Asset. Quality. Company. Concentration Liquidity. Weightages. 42.5%.
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CRISIL Mutual Fund Ranking

For the quarter ended March 31, 2011 CRISIL Mutual Fund Ranking Booklet Mar 2011indd.indd 1

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CRISIL Mutual Fund Ranking Booklet Mar 2011indd.indd 2

4/29/2011 6:36:13 PM

Large-cap, Ultra Short Term debt outperform in respective categories Large-cap equity funds and ultra short-term debt funds were the best performers in the equity and debt categories, respectively, as per the latest CRISIL Mutual Fund Ranking released for the quarter ended March 2011. However, debt funds continued to outperform equity funds for the second quarter in a row. The debt funds category returned close to 2 per cent during the quarter ended March 2011 compared to negative returns of 7 per cent given by the equity category. In comparison, debt funds had given a return of 1.35 per cent while equity funds gave a negative return of 0.57 per cent, during the quarter ended December 2010. Within debt funds, ultra short-term debt funds topped the charts with 2.06 per cent returns during the quarter under review, while liquid, short-term debt, long-term debt and gilt funds gave returns of 1.97 per cent, 1.93 per cent, 1.61 per cent and 1.31 per cent, respectively. The superior performance of ultra short-term debt funds can be attributed to the better management of average maturity by fund managers in their portfolios. On the other hand, among equity funds, large-cap equity funds gave negative returns of 5.4 per cent, followed by diversified equity and small & mid-cap funds, where returns declined by 7.11 per cent and 10.27 per cent, respectively. Returns in the equity category were negative mainly on account of high inflation, high crude prices, tight monetary policies and global political uncertainty. Inflation came in at 8.98 per cent as of March 2011 compared with 9.41 per cent in December while crude oil price rose to its 30-month high at $106.72 a barrel on the NYMEX as on March 31, 2011 mainly due to civil unrest in MENA (Middle East and North African) countries. To control inflation, RBI raised repo and reverse repo rates twice during the quarter by 25 bps each on both the occasions to 6.75 per cent and 5.75 per cent respectively. Though large-cap funds have outperformed other equity categories in the quarter ended March 2011, they have

underperformed the S&P CNX Nifty. This underperformance is largely on account of large cap funds being overweight on pharmaceutical and healthcare services, which were among the worst-performing sectors in the previous quarter. However, CRISIL Mutual Fund Rank 1 schemes within the category outperformed the S&P CNX Nifty during the quarter. CRISIL Mutual Fund Ranking covers close to 85 per cent of the mutual fund industry’s average assets under management as of March 2011, an increase of nearly 14 per cent over the previous quarter. At the fund house level, HDFC Mutual Fund continued to lead the tally of top-ranked funds across the equity and debt categories. 18 of its funds were under CRISIL Fund Rank 1 as compared to 17 in the previous quarter. DSP BlackRock Mutual Fund and Birla Sun Life Mutual Fund followed with a total of 6 and 7 funds, respectively, under CRISIL Fund Rank 1. A unique feature of CRISIL Mutual Fund Ranking is that unlike most other ranking models that are purely based on returns or net asset value (NAV), CRISIL Mutual Fund Ranking uses a combination of NAVs and portfolio-based attributes for evaluation. CRISIL’s fund ranking framework provides a single-point analysis of mutual funds, considering all factors, such as riskadjusted returns, asset concentration, liquidity, asset quality and asset size. The rankings also include categories that focus specifically on the long-term consistency of a fund’s performance. The ranks are assigned on a scale of 1 to 5, with CRISIL Fund Rank 1 indicating ‘very good performance’. In any peer group, the top 10 percentile of funds are ranked as CRISIL Fund Rank 1 and the next 20 percentile are ranked as CRISIL Fund Rank 2. Investors can use