Mutual funds had a torrid time in the latest carnage on Dalal Street with as many as 114 diversified equity funds (out of 166 funds) witnessing their returns tumble faster than the market

since May 17.

On an average, diversified equity funds lost a shade more than the market at 14.67 per cent as compared to the Sensex loss of 14.2 per cent in the sell-off.

Data from Value Research Online suggests that only 52 funds managed to keep their net asset values (NAVs) from falling faster than the Sensex. Much of the average impact on diversified equity mutual funds was cushioned largely because of the large amount of cash component in some newly launched funds.

Value Research’s Dhirendra Kumar reckons that 21 funds have lost more than 20 per cent since the market peak on May 10, 2006.

No mutual fund, however, managed to keep their head above water as losses ranged from 4.53-20.53 per cent. Some of the worst hit funds have been Taurus

Discovery, Canemerging Equities and LIC Mutual Fund Equity Fund.

Some of the funds that were the least hit were the recently launched Quantum Long Term Equity Fund, Sundaram Select Midcap and DBS Chola Global Advantage Fund. However, fund analysts contend that 3-4 days of performance is too short a period to assess returns. ‘‘Since mutual funds should strive to protect capital, the comparison is justified,’’ said an analyst.

Says Dhirendra Kumar, CEO, Value Research Online: ‘‘Usually one should not look at a 3-4 days performance, but mutual funds have to serve a basic need of protecting investors capital. That’s what investors are looking for’’.

... contd.