IT & Pharma Funds under-perform

Being mired by volatility since the past 1 year has been extremely rewarding for investors with faith in equity investing. Investors who have shown conviction in mid cap and small cap investing have been rewarded handsomely with the category returns for small cap funds reflecting a gain of 21.90 per cent and the gains for mid cap category being registered at almost 16.08 per cent over a 1 year period.
 
During the similar time frame large cap fund category registered a growth of 11.89 per cent; while the multi cap fund category clocked 14.65 per cent. What is interesting is the international funds as a category delivered 16.09 per cent returns. 

IT and Pharma sectoral funds have grossly underperformed the broader markets with funds investing into the IT sector having managed to deliver a paltry 0.32 per cent over a 1 year period. Pharma funds have not been able to deliver positive returns and have clocked negative returns of 1.34 per cent. Banking Funds and Mutual Funds that invested in FMCG sector did well to outperform the larger market. Banking Funds as a category managed to deliver 19.43 per cent returns whereas the returns delivered by the FMCG Fund category stand at 18.01 per cent.

Both IT sector and Pharma sector have experienced growth issues with domestic IT companies struggling considerably.

Going ahead, investing in Pharma Funds may be a good idea with several analysts being bullish on the sector's growth. Rich valuation may be a limitation when it comes to investing in stocks in Pharma sector.