Mfs Spent Rs 6, Earned Re 1 In Last Fiscal

Investing in mutual funds (MFs) seems to be no longer a safe bet. Starting with fund behemoth Unit Trust of India (UTI), the fund managers of 12 private sector mutual funds faced the music of turbulent stock markets in 2000-01.

The managers of 12 private sector mutual funds managing 54 schemes with equity investments earned Rs 673.22 crore while they spent Rs 2,697.11 crore during 2000-01. This led to a revenue deficit of Rs 2,023.89 crore over earnings. With a further Rs 2,031.0 crore decline in the unrealised value of investments, the loss works out to a bigger Rs 4,054.9 crore. Put simply, it means that they lost six rupees to earn a rupee in 2000-01.

The fund managers made merry during 1999-00, as their earning was at Rs 2,104 crore with surplus of Rs 1,592.63 crore and unrealised appreciation of Rs 1407.20 crore.

However, such euphoric conditions was short lived. A gloomy economic scenario especially in the second half of fiscal 2000-01 and bear hammering saw a southward journey in almost all equity investments.

This evaporated the funds reserve base too. Combine reserves of 12 mutual fund's 54 schemes plunged to one tenth to Rs 43 crore against Rs 4,348 crore in the previous fiscal.

Almost all 12 mutual fund houses reported a revenue deficit during the fiscal 2000-01 against a revenue surplus managed in the previous fiscal (1999-00).

Alliance Capital Mutual Fund was the worst hit with its 6 schemes reporting a combined loss of Rs 1,241 crore against a profit of Rs 861.9 crore managed in the previous year. A loss in unrealised value of investments of Rs 1,085 crore ended the year with a reserve base of Rs 79 crore as against Rs 1,435 crore in the previous fiscal. Alliance New Millennium scheme was the worst performer with a total loss of Rs 512 crore against a profit of Rs 166 crore in 1999-01. A boom and bust in information technology, communication and entertainment sectors was the major factor that triggered such performance.

Sun F&C Mutual Fund that already had earned losses in 1999-00 saw the situation worsen further in 2000-01. Its 3 schemes focusing on equity investment reported a combine losses of Rs 173 crore against Rs 4.4 crore loss registered in the previous fiscal. Its Emerging Technologies Fund with losses to the tune of Rs 79 crore dented the scheme's performance.

Birla Sun Life Mutual Fund's 6 schemes' total losses bloomed to Rs 267 crore as against Rs 38.3 crore in the previous fiscal. The fund's loss in unrealised value of investments shot up more than four times to Rs 173 crore in 2000-01 from Rs 38.3 crore in 1999-00. The performance of its Birla Advantage and Birla Balanced funds proved to be a major drag.

Pioneer ITI Mutual Fund was the sole fund house that managed a net gain in unrealised value of investments during the fiscal. However, the net gain for its 15 schemes slipped to Rs 35.9 crore from a whopping Rs 490.6 crore in the previous fiscal. The fund's sector specific, Prima and Prima Plus schemes were the worst hit among the lot.