Mumbai: Indian equity funds stormed into the Lipper list of the world’s 100 top-performing stock funds of 2007, with 40 funds making the cut compared with none a year ago, as Indian shares turned in their best performance in four years.
A power sector fund from the country’s largest asset manager Reliance Capital led the Indian top performers in 2007.
The top-100 list, carved out from a set of 24,887 funds tracked by global fund intelligence firm Lipper, a Reuters company, also includes five India-dedicated offshore funds.
Over the 10-year period ended December 2007, local funds are clear winners with seven of the world’s top 10 funds from India.
“Indian funds had a revelling year, with the broader markets faring well and the mid- and small-cap segments outperforming their bluechip peers by a significant margin in 2007,” Dhruva Raj Chatterji, research analyst with Lipper in India, said.
India’s main stock index, the 30-share Sensex of the Bombay Stock Exchange, rose 47% last year, clocking six straight years of gain, as foreign funds, attracted by strong economic growth and corporate performance, poured more than $17 billion in local shares, the highest in a single year.
The BSE Mid Cap and Small Cap indices grew faster, gaining 69% and 94% respectively, powering returns of funds which invested 40-48% of their assets in such stocks, data from fund tracker ICRA Online Ltd showed.
Nearly three-fourths of the funds secured a place in the top 1,000, while majority of India-based funds tracking auto, pharmaceutical and battered tech stocks were pushed to the bottom with Franklin India Infotech getting the worst rank of 22,790.
Twenty-nine Chinese funds, which saw their main stock index rise 97% last year, secured a place in the world’s top-100 funds.
“This is just the beginning...We are not at all surprised by the performance of Indian funds as they are based on the strong foundation of the Indian economy,” Vineet K. Vohra, chief executive officer of ING Investment Management (India), said.
“It clearly shows India’s strong story as an investment destination for an enormous opportunity,” he added.
Globally, equity funds that have a track record of at least one year and are covered by Lipper, showed an average return of 2.52%, but the 306 Indian funds among them delivered an average 55.64% gain, Lipper data showed.
Dhruva said more than three-fourth of the Indian equity funds managed better returns than India’s benchmark index in 2007 but those investing more in sectors such as steel, capital goods, realty and financial services stood out.
India’s actively managed diversified equity funds returned 55.97% in 2007, on an average, their best in four years.