India equity funds registered for sale in that market generally had a rough time performance-wise in August due to a foreign investors-led pullout from local shares, according to Lipper data. India equity funds posted an average loss of 1.35% last month, marginally outperforming the benchmark 30-stock Sensitive Index (Sensex), which shed 1.49%.

ôLiquidity dried up in India, with foreign institutional investors selling equities to the tune of $2 billion in August,ö in line with concerns over the US subprime mortgage crisis, says Mumbai-based Dhruva Raj Chatterji, a research analyst at Lipper.

The stock market selloff would have been worse, if not for the strong inflows from domestic investors, which Chatterji estimates at Rs41 billion ($1.01 billion) in August. He notes that confidence in the domestic economy helped keep investorsÆ sentiment positive.

India's economy expanded at a faster-than-expected pace in the fiscal first quarter of 2007 due to strong output from manufacturing and services. Gross domestic product (GDP) grew 9.3% on-year in the April-June period, beating even the most optimistic forecasts of analysts. GDP growth had moderated compared with the 9.6% on-year growth in the first quarter in 2006, however. IndiaÆs fiscal year ends in March.

The performance of India equity funds ranged from a return of 8.13% to a loss of 4.74% in August. Funds that invest in capital goods were among the best performers while funds that invest in pharmaceutical companies and information technology-related firms were the worst.

Average August performance of fund groups registered for sale in India, by asset types:

Bond US Dollars +1.94%
Commodities +1.37%
Money Market Indian Rupees +0.54%
Bond Indian Rupees, General +0.41%
Equity Global +0.34%
Bond Indian Rupees, Government +0.26%
Mixed-Asset Flexible -1.72%
Protected -1.35%
Equity India -1.35%
Mixed-Asset Balanced -0.67%
Mixed-Asset Aggressive -0.24%
Mixed-Asset Conservative -0.24%

Top 5 equity fund sectors in terms of performance in August, with their average gain/loss:

Equity Sector Utilities +2.47%
Equity Sector General Industry +0.57%
Equity Sector Non-Cyclical -0.20%
Equity Sector Technology Media and Telecommunications -0.51%
Equity Sector telecommunications Services -1.18%

Bottom 5 equity fund sectors in terms of performance in August, with their average loss:

Equity Sector Pharmaceuticals and Health -5.48%
Equity Sector Information Technology -4.58%
Equity Sector Cyclical Consumer Goods -2.74%
Equity Sector banks and Financials -2.68%
Equity Sector Natural Resources -1.32%

Top 5 equity funds in August, with gain:

JM Emerging Leaders Fund +8.13%
JM Small and MidCap Fund +4.69%
Escorts Growth Plan +4.62%
Escorts Tax Plan +3.69%
JM Hi Fi Fund +3.22%

Bottom 5 funds in August, with loss:

Franklin Infotech Fund -6.88%
SBI Magnum Sector Funds Umbrella-Pharma Dividend -6.10%
UTI Growth Sector Fund-Software Income -6.00%
JM Healthcare Sector Fund-Growth -5.90%
SBI Magnum Sector Funds Umbrella-Informatikon Technology -5.53%