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The aggregate gains of the equity funds was better than the performance of the benchmark 30-stock Sensitive Index (Sensex), which ended down 2.39% last month.
However, globally focused equity funds bore the brunt of a significant correction in some of the international equity markets and ended in negative territory. Equity global and Equity emerging markets global portfolios suffered losses of 6.18% and 7.88%, respectively.
Dhruva Raj Chatterji, a Mumbai-based research analyst at Lipper, says lliquidity from abroad dried up during November, with net sales from foreign institutional investors (FIIs) reaching nearly $1.5 billion (INR58.50 billion) in Indian equities. Domestic mutual funds were the saving grace, pumping Rs21.70 billion ($556 million) into Indian stocks, making it the second highest monthly inflow from domestic funds so far this year.
ôThe small- and mid-cap segments of the market benefited from this and outperformed their blue-chip peers by a significant margin,ö he says. ôHowever, with the US Federal Reserve expected to continue to cut rates well into next year, liquidity flow to emerging markets including India is expected to carry on, although the pace of it would be difficult to speculate on.ö
Chatterji notes that robust registration of FII sub-accounts with IndiaÆs capital markets regulator, the Securities and Exchange Board of India (SEBI), after the recent participatory notes legislation indicates foreign interest in India still remains strong.
The SEBI banned in late-October the issue of participatory notes with derivatives as the underlying assets by foreign institutional investors effective immediately. Existing positions were given 18 months to be wound up. Participatory notes are used by investors, including hedge funds, that aren't registered with the SEBI, to invest in Indian stocks.
Average November performance of fund groups registered for sale in India, by asset types:
Bond USD +2.73%
Equity India +1.45%
Mixed Asset INR Balanced +0.78%
Mixed Asset Other Aggressive +0.67%
Bond INR General +0.61%
Money Market INR +0.60%
Mixed Asset Other Conservative +0.45%
Bond INR Government +0.37%
Mixed Asset Other Flexible -0.11%
Equity Global -6.18%
Equity Emerging Markets Global -7.88%
Top 5 equity fund sectors in terms of performance in November, with their average gain/loss:
Equity Sector Technology, Media and Telecommunications +11.39%
Equity Sector Banks and Financials + 6.44%
Equity Sector Utilities +3.84%
Equity Sector General Industry +2.57%
Equity Sector Cyclical Consumers Goods -1.16%
Bottom 5 equity fund sectors in terms of performance in October, with their average gain/loss:
Equity Sector Telecom Services -6.42%
Equity Sector Pharmaceutical and Health -5.74%
Equity Sector Gold and Precious Metals -4.42%
Equity Sector Information Technology -3.21%
Equity Sector Non Cyclical Consumer Goods -1.51%
Top 5 equity funds in November, with gain:
Taurus Discovery Stock Fund +13.75%
Taurus Libra Tax Shield +13.07%
Reliance Media & Entertainment Fund +11.39%
ING Dividend Yield Fund +10.78%
JM Financial Services Sector Fund +l 9.38%
Bottom 5 equity funds in November, with loss:
Kotak Global Emerging Market Fund -7.88%
Sundaram BNP Paribas Global Advantage -7.83%
Franklin Infotech Fund -7.18%
Leader SBI Magnum Sector Funds Umbrella -6.86%
Principal Global Opportunities Fund -6.82%
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.
The recent focus on greenwashing has put bond issues under greater scrutiny. However, some market participants believe this risks paralysis by analysis.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.