Funds book Rs 3,858-cr loss in FY09 first half

Mutual funds booked losses worth Rs 3,858 crore in the first half of 2008-09 on redemptions of their investments in equity-related schemes as markets turned weak worldwide. The fund houses had made a profit of Rs 18,528 crore in the second half of 2007-08.

Of 29 fund houses, which published their unaudited financial results for the first half ended September 30, 2008, 22 mutual funds have posted a combined net loss of Rs 4,466 crore, while the remaining seven fund houses have reported an aggregate net profit of Rs 608 crore in the first six months of 2008-09. In second half of last year, all 29 mutual funds had booked profits on their investments in equity stocks.

The sale of investments by the mutual funds has been in line with the market trend as in the first half of 2008-09, Sensex fell by around 18 per cent. In the corresponding period last year too, the Sensex had witnessed a decline of 9.2 per cent. But, while the Sensex fell in both quarters of the current financial year, it had gained in October to December but fell in January to March 2007-08.

Of the 22 mutual funds, which made losses in the first half, 12 fund houses have posted a net loss of more than Rs 100 crore each and 10 fund houses made a loss of less than Rs 100 crore.

These funds also underperformed the benchmark indices in the period under review, indicating that fund managers have booked losses partly to pay for redemptions and partly to cut losses. SBI made a profit of Rs 236 crore, HDFC (Rs 154 crore), UTI (Rs 87 crore) and Taurus, Fidelity, IDFC and Benchmark together earned Rs 131 crore.