Stocks funds miss once-in-a-decade opportunity

Nearly nine of every ten Indian diversified equity funds lagged the benchmark index's best monthly gains in 10 years as double digit cash levels diluted returns in April, data from global fund tracker Lipper show.

These funds, making the largest stock funds category in terms of numbers and asset under management, posted a 13.7 percent jump in their net values in April, the best since December 2003.

Also read -
-BSE aims at internationalization of listing businessNEW !!
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list

However, nearly 90 percent of the 285 funds tracked by Lipper failed to beat the 17.45 percent surge in the 30-share BSE index, which showed the best monthly performance in 10 years, as a wave of improved investor confidence swept across the world. "We think these funds lagged the broader indices, primarily due to their allocations to cash and non benchmark holdings," Chintamani Dagade, a senior research analyst with Morningstar India, said.

"Having said that, these funds reduced their cash allocations significantly in April to benefit from a surprise rally in March," he added.

Indian funds had everything going well in April, their large sectoral bets such as financials, capital goods and energy rallied on growing optimism that the global economy was on the mend, driving billions of dollars back into emerging markets.