India funds dominate world top-100 stk funds in Q2

Posted 07 4 2009 9:01PM

MUMBAI (Reuters) – Fifty one India-focused funds were among the world's top 100 performing stock funds in the quarter to June as domestic shares leapt by nearly half, recording their biggest surge in 17 years, data from fund tracker Lipper showed.

They are led by those investing in shares of infrastructure firms, a favoured theme in Asia's third largest economy after the Congress-lead coalition won a strong mandate in April-May polls raising hopes for higher spending on roads, ports and bridges.

The Lipper's list of 29,942 world stock funds with a track record of at least a quarter showed India funds recording an average 50.45 percent jump in their net values in three months to June as compared to just over 18 percent gain for the fund group.

India funds were led by Naya Bharat Property Company fund, domiciled in the Isle of Man, which gave a return of nearly 135 percent, followed by JM Core 11 Fund, a concentrated 11-stock portfolio, which rose more than 100 percent.

"Stocks in India were spurred on by a steady diet of positive macro data and the strong victory of the incumbent Congress party in national elections mid-May" said Rajeev Baddepudi, a senior research analyst for ASEAN at Lipper.

Indian shares surged 49.3 percent during April-June, the fastest in Asia after Vietnam, on signs of economic recovery and hopes for market-friendly policies by the re-elected Congress-lead government.

The gain was the biggest rise for the benchmark in any quarter since it soared 124.5 percent in January-March in 1992 when Manmohan Singh, the then finance minister, kicked off reforms to open up the economy.

INFRASTRUCTURE

Hopes are high that Manmohan Singh, currently in his second-term as prime minister, would further open up the economy to foreign investment and remove policy bottlenecks.

This has led to sharper surge in shares of infrastructure firms, with capital goods stocks rising nearly twice as fast as the benchmark index in June quarter, lifting portfolio gains for funds primarily investing in the sector.

For instance, all top five Indian funds part of the Lipper's top-100 list are infrastructure or property funds.

Fund houses JM Financial Asset Management and Sundaram BNP Paribas Mutual Fund have four funds each in the list, while Benchmark, India's passive fund manager, DBS Cholamandalam, SBI Funds Management and Taurus Mutual Fund had three schemes each.