October would have left several investors dismayed. It began on a positive note but, as the month progressed, the rally seemed to lose steam. Factors such as fears of rising inflation and a premature withdrawal of the stimulus package, among others, weighed down the markets.
Over the month the Bombay Stock Exchange’s (BSE) Sensex shed 7.2%. Stocks in the mid-cap segment fared better than their large-cap peers. The BSE Mid Cap posted a loss of 4.9% over the month, while the BSE 100 shrank by 6.7% over the same time frame.
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But if a longer time frame were to be considered, investors have been rewarded. For instance,over the one-year period, the Sensex is up 62.4%, while the BSE 100 has risen by 68.2%.
Investments in the mid- and small-cap segments, which typically offer a high risk-high return investment proposition vis-a-vis large caps, have fared better. The BSE Mid Cap and BSE Small Cap have appreciated by 87.9% and 87.5%, respectively, over the one-year time frame. The performance of sectoral indices proved to be a mixed bag.
The BSE FMCG index (up 9.1%) bucked the downward trend and delivered an impressive showing. But the BSE TECk index, which represents technology, media and telecom stocks, lost 12.4% over the month. In order to merit funds’ long-term performance, they have been ranked based on their one-year Morningstar risk-adjusted return for this review.
Graphics by Ahmed Raza Khan / Mint