Mutual fund schemes that investing in the information technology sector have sprung a surprise on the performance charts.
Technology funds have emerged the best performer across categories in a year as on Wednesday, toppling the recent winners -- schemes investing in pharmaceutical and consumer goods sectors -- from the top returns league.
Fund managers said the weaker rupee, which has driven up shares of technology companies, has helped the fund fetch better returns.
But this category has underperformed their benchmark index.
Technology funds, in the one-year period ended July 30, have given average returns of 31 per cent, compared with the 30 per cent given by the fast-moving consumer goods sector funds and 22 per cent average returns given by the pharma funds.
Their benchmark -- the BSE IT index -- however, rose close to 38 per cent during the period, according to fund tracker Value Research.
“The currency depreciation has helped these stocks the most. In the last two years, we have seen the rupee move from Rs 45 against the dollar to Rs 60,” said Sankaran Naren, chief investment officer at ICICI Prudential Asset Management Company.
Four of the five technology-focussed funds feature among the top 10 performing mutual fund schemes, according to data from Value Research.
SBI IT has been the best performing fund with returns of around 36 per cent.
Other funds, which are part of the top 10, are Franklin Infotech, Birla Sun Life New Millennium and ICICI Prudential Technology with one-year returns of 33 per cent, 30 per cent and 29