Diversified Equity Funds vs. Contra Funds – Review

The table below lists out equity diversified funds from the large cap and large to mid-cap bias along with their returns across similar timelines. In addition to this, contra funds returns are also listed for comparison purpose.

Fund Returns: (Equity Diversified Pack)

Fund Returns: (Contra Funds Pack)

Green: Outperformance of fund w.r.t both Sensex and Nifty.

Red: Underperformance of fund w.r.t both Sensex and Nifty.
YTD: Year-To-Date Returns

Highlights: (Equity Diversified Pack)

i) Canara Robeco has consistently outperformed the benchmark on all timelines.

ii) SBI Magnum Equity has been able to outperform both the key indices in the last 4 iterations.

iii) 2009 and 2011 was the best year for this fund basket as all the funds have outperformed Sensex and Nifty.

iv) On an average basis, diversified equity funds have been able to outscore the benchmarks on all occasions.

v) In comparison to the contra funds, lot of green is available in the table above, conveying more outperformance vis-à-vis underperformance.

Highlights: (Contra Pack)

i) L&T contra has been a consistent underperformer on all timelines except the YTD returns.

ii) Tata contra has been able to outperform both the key indices in the last 4 iterations.

iii) 2010 was the worst year for contra funds and only exception was Tata contra which managed to outperform Sensex and Nifty.

iv) It has been a decent year so far for the contra funds; with 5 out of 6 funds have outperformed the benchmarks, although not by a huge magnitude.

v) On an average basis, contra funds have been able to outscore benchmarks on just 2 occasions, namely, 2009 and on YTD basis this year.

Top 3 Industry Concentrations: May-31-2012 (Equity Diversified)

Top 3 Industry Concentrations: May-31-2012 (Contra)

The above stats about the top 3 industry concentration reveals that “Financial” as an industry is the top pick for all the 5 equity diversified funds and contra funds as well. Energy or Tech is the second most favorite industry for this pack. The third slot is again occupied by FMCG, Energy or Tech industry, interchangeably.

Top 5 Holdings: May-31-2012 (Equity Diversified)

Top 5 Holdings: May-31-2012 (Contra)

On analyzing the top 5 holdings data from equity diversified pack, the stocks chosen are mostly blue-chips or stalwarts as per their asset allocation bias.

If we analyze top 5 holdings data from the contra pack, the stocks chosen are again mostly blue-chips or stalwarts that have become out of favor due to reasons either intrinsic to them or on a broader note, to the industry itself.

Apart from the blue-chips, the other contra bets such as GSFC and Sadbhav Engg. (Not so famous names) but they are far and few in between.

Conclusion:

After a thorough evaluation, it is now a revelation that almost all the contra funds are also employing a value investing approach. The top picks and top industries are in line to the diversified equity fund following a large-cap bias or a value based style.

The equity diversified pack has shown a decent performance almost on all historical timelines. On the flip side, in contra pack, the returns have faltered on historical timelines but on an YTD measure the returns they have been on a positive side.

This positive aspect is also a reflection on the change in the investment style where the focus in the contra pack has also shifted to blue-chips/heavyweights, thus proving that contrarian approach is not anymore an inherent feature of these contra funds.

Additionally, expense ratio of contra funds is also on a higher side vis-à-vis equity diversified pack because contrarians have a short-term approach and thus involves a lot of churning in the portfolio which also contributes to the higher expense ratios.

Contra Funds - Review

The turbulence in the domestic markets continues due to global cues and intrinsic issues. Any turbulence in the markets leads to shift the focus towards Contra Funds (Mutual Funds) vis-à-vis regular diversified equity mutual funds. Amidst volatility, the patrons of the Contra funds have once again started advising them to the investor community. They were the star performers in 2008-09 crisis primarily because of their ability to contain downside and decent magnitude of upsurge.

What is a Contra Fund?

Contra, short form of contrarian, focuses on stocks or sectors which are beaten down owing to intrinsic reasons. However, there is nothing wrong with the industry and they have a potential to bounce back in the future. Contra Funds invest in these out of favor stocks for their intrinsic growth potential which the current price may not reflect. The aim of these funds is to gain form the price advantage by investing in these stocks.

Indian Contra Funds

As of now, 6 AMCs have launched the contra funds in their funds basket. Almost all the major fund houses like SBI, Tata, Kotak and UTI have contra funds offerings. SBI launched the first contra funds in India, way back in July 1999. Following table lists out the contra funds currently operational in India with their respective “Expense Ratios”.

As can be seen from the above list, the expense ratios of these funds are on the higher side and barring two, rest 4 are hovering around 2.50%. The best bet in terms of expense ratio is UTI contra with 1.64%. The question which comes to my mind after seeing these whopping expense charges is that if these funds are outperforming key benchmarks and by what magnitude.

Although another school of thought is that contrarian investing is not an instinctive reaction in volatile markets. The purchases are made during widespread carnage, contrarian investing relies on in-depth research to source out greatly mispriced stocks and the foresight to look beyond the short-term volatility.

Performance Review

The next research is on analyzing the returns of these funds for the last 5 calendar years with respect to the key benchmark indices, Sensex and Nifty. The following table highlights the performance of the 6 funds on various timelines.

Green: Outperformance of fund w.r.t both Sensex and Nifty.

Red: Underperformance of fund w.r.t both Sensex and Nifty.

YTD: Year-to-Date

 

Highlights:

i) L&T contra has been a consistent underperformer on all timelines except the YTD returns.
ii) Tata contra has been able to outperform both the key indices in the last 4 iterations.

iii) 2010 was the worst year for contra funds and only exception was Tata contra which managed to outperform Sensex and Nifty.
iv) It has been a decent year so far for the contra funds; with 5 out of 6 funds have outperformed the benchmarks, although not by a huge magnitude.

v) On an average basis, contra funds have been able to outscore benchmarks on just 2 occasions, namely, 2009 and on YTD basis this year.

AAUM’s in Crores: (as on 31-March-12)

On “Average Assets under Management” terms, the oldest contra fund SBI contra has the corpus of 2702 crores which account for almost 88% of the contra funds basket. L&T is a minnow in the asset race with just 8 crores in its kitty and it has to work hard to compete with even second last player in this category. The total AUM of the contra funds basket stands at 3082 Crs. as on 31-Mar-12and it constitutes just 1.69% of the total equity funds AUM (182076 Crs.) as on 31-Mar-12.  

Top 3 Industry Concentrations: May-31-2012

The above stats about the top 3 industry concentration reveals that “Financial” as an industry is the top pick for all the 6 contra funds. Energy is the second most favorite industry for 5 out of 6 contra funds. The third slot is being occupied by FMCG, Energy or Tech industry.

Before reaching to any conclusion on industry picks, let us analyze the top 5 company picks for all the 6 funds.

Top 5 Holdings: May-31-2012

On analyzing the top 5 holdings data, the stocks chosen are mostly blue-chips or stalwarts that have become out of favor due to reasons either intrinsic to them or on a broader note, to the industry itself.

The banks on the whole have been on the receiving side due to the central banks anti-inflationary stance. Moreover as an industry, it is not really out of favor because of the immense potential offered by it and also because of the robust banking system prevailing in India.

The energy industry again offers tremendous potential in the country as most of the Indian states are reeling under acute power shortage. This industry is also facing the music of so called policy paralysis affecting the industry as whole.

The stock picking strategy reveals that fund managers are not staunchly following a contra style of investing, but it also has an element of value investing in it. This is purely because the top 5 highlighted here are not sufferers by any means and on the contrary they are market favorites and are frequently found in any large-cap diversified equity fund.

Apart from the blue-chips, the other contra bets such as GSFC and Sadbhav Engg. (Not so famous names) but they are far and few in between.

Conclusion:

After a thorough evaluation, it is now a revelation that almost all the contra funds are employing a value investing approach. The top picks are in line to the diversified equity fund following a large-cap bias or a value based style.

The high expense ratio for such a value picking strategy is not justified and as it is the returns are also not outperforming the major benchmarks by any means.

The contra fund name is just a fancy to allure the investor and any diversified equity funds with a large or large to mid-cap bias with a good track record and from an acclaimed AMC sounds a much better alternative.

Dogs of the Sensex

India Inc. continues to suffer from rising interest rates, high costs and policy paralysis and this is now also reflected in the dividend payouts of 2011-12 fiscal which declined w.r.t 2010-11 fiscal. The dividend payout numbers for all the Sensex constituents are out and reflects the somber mood prevailing in the Indian economy. The following table highlights the dividend payout data for 2010-11 and 2011-12 fiscal.

Highlights: 

a) The net dividend payout (interim and final) for 21 companies has increased from 2011 to 2012.

b) For 5 companies, the net dividend payouts for both the fiscals have been status-quo.

c) The dividend payout shrinks from 2011 to 2012 fiscal for 4 companies.

d) The negative shock came from Hero MotoCorp for which the dividend plummeted from 5250% in 10-11 fiscal to 2250% in 11-12 fiscal.

e) The positive surprise originated from TCS for which dividend increased from 1400% in 10-11 fiscal to 2500% in 11-12 fiscal.

f) The average dividend payout for 2010-11 fiscal stood at 432% and it decreased to 401% in 2011-12.

Assumption:

Current set of Sensex constituents is assumed for both the fiscals for smooth comparison.

Sensex – Dividend Yield:

The list below displays the top 10 dividend yields of Sensex as on EOD values of 13-Jun-12.

As can be seen from the above list, top 3 ranks in the list are occupied by PSUs and 4 PSUs make it to top 10. 2 Auto companies also make it to the top 10.

Amidst the volatile markets, stock picking is always a tough task and lot of stress is on a tendency of entering at low levels and exiting at high levels. This strategy is aimed for winning but on umpteenth occasions it often results in pains because of the simple reason that it is next impossible to time the markets.

In an effort to find a stock screening system, I came across a mechanical strategy that sounds easy as well as convenient. This strategy requires just an effort of two-three hours in a year. The name of the strategy is “Dogs of the Sensex”.

Dogs of the Sensex “Strategy”

Dogs of the Sensex is a replication of a very simplest “Dogs of the Dow” or “Dow 10” strategy introduced by Michael O'Higgins and John Downes in early 1990s. The strategy is aimed at investing in 10 highest dividend yields. Dividend Yield is a measure of dividing the latest annual dividends by the current stock price. A high dividend yield implies stocks whose prices have fallen and are available at favored prices for the investors.

The investments are done in top 10 dividend yields of Sensex for a period of one year. The portfolio is rebalanced after one year as per the latest dividend yields. It is a pure mechanical strategy which gets rid of all the research, patterns and subjective inputs involved in the stock screening activities.

A low dividend yield indicates an over-priced stock and a high dividend yield indicates an underpriced or beaten down stock. The beaten down stocks are the best candidates for upsurge in prices.

The strategy is pretty much in line with the fact that one would like to have a portfolio of companies with impressive dividends and beaten down prices (Sensex Sufferers). It is also supplemented with the combinations of stocks a.k.a blue-chips which has an impressive track record in the past and thus also are making it to the Sensex.

The companies listed out for fiscal 11-12 also coincidentally creates a diversified portfolio in the process with presence felt from all the major industries contributing to India Inc. story.

Performance of Dogs of the Sensex (Fiscal 10-11)

The top 10 dividend yield picks for fiscal 10-11 along with their respective Y-o-Y returns as on 13-Jun-2012 are as follows:

 Highlights:

 FMCG duo HUL and ITC secured the first and the second position for highest returns category.
 BHEL secured the top position for negative returns.
 60% of stocks ended up in advancing and 40% in declining categories.
 On comparison of lists of both the fiscals (10-11) and (11-12), there have been 3 new entries:
i) Coal India , ii) TCS and iii) ICICI Bank

The average returns of the pack were 2.20% on a year-on-year basis and it outperformed the benchmark (Sensex) by far which generated -7.59% returns in a similar time frame.

Assumptions for the strategy:

i) Hold and Sell of stocks after a day more than a year as it is considered as long-term capital gain (LTCG) and LTCG are not taxed at all. Any gains that you make by buying and selling stock(s) within a year’s time-frame is considered as short term capital gains and it is taxed at 10 per cent.

ii) This strategy also is not taking into account the transactional costs while the portfolio rebalancing exercise is carried out.

iii) A high dividend yield can also be either because of the stock is tremendously beaten down or it may have substantially increased dividends due to one-off reason (Asset sale, Capital Gain, Special Dividends)

Gold ETFs – Increasing Market Penetration

Investing in stock markets is turning out to be a risky affair, as it is always surrounded by global uncertainties. Hence, the yellow metal’s shine is only becoming more attractive and a perfect hedge against rising inflation. Investment in gold can either be through purchase of physical gold or through Gold ETFs, which are special types of ETFs which invest in gold and gold related securities.

What is ETF?

ETF or Exchange Traded Fund is an investment fund traded on stock exchanges, just like stocks. ETFs can be based on any of the assets like stocks, bonds, commodities like Gold etc and is supposed to trade close to its asset value. ETFs are interesting for investors as the brokerage/maintenance costs are low and has higher liquidity compared to traditional assets especially in case of Gold. Also, they are easily tradable and have stock like features.

What exactly is Gold ETF?

Gold ETF or Gold Exchange Traded Fund is an investment fund based on Gold as an asset. The price of Gold ETF would be close to its asset value.

Presence in India

With global uncertainties and fall in the domestic price of the yellow metal, month-end assets under management (AUM) of Gold ETFs witnessed a sharp rise. With 44 mutual fund companies in India, only 11 of them have come up with Gold ETFs - Benchmark Mutual Fund (now Goldman Sachs Mutual Fund) was the first to start a Gold ETF in March 2007. The scheme name was Benchmark Gold BeES (now known as GS Gold BeES.

Performance Review

 

 

Average Assets under Management (AAUM):

AMFI which was declaring the AUM numbers on monthly basis till Sep-10 is now declaring the AAUM (Average Assets under Management) numbers on quarterly basis after Sep-10 onwards.

On comparing of AAUM numbers, the total AUMs (Corpus) in Gold ETFs category which was 2732.44 Crs. in Sep-2010 has increased to 3765.28 in Mar-2011 (AAUM basis), which further increased to 7053.13 Crs (AAUM basis) in Sep-2011. This is an increase of 37.80% in first 6 months and 87.32% in next 6 months. On Y-o-Y basis, the increase is of 158%.

Market Share (As on Sep-10-2011):

 

 

Goldman Sachs BeES has the highest market share of 36.26%, followed by Reliance which has 27.25% of market share. Kotak Gold is the third amongst the 11 having a market share of 10.94%.

Introspection:

 ICICI Gold ETF which witnessed a highest increase of 51% in AAUM in the first 6 months has seen a decline of whopping 26% when all others have gained to their respective AAUM numbers.
 Reliance which gained 36% in the first half, gained a humongous 342% in the second half which amounts to an addition of 1487.51 Crs in it’s AAUM kitty in the second half.

 Kotak Gold ETF’s AAUM increased a huge 200% in the second half in comparison to a meager 12% in the second half.

 HDFC which lost it’s footing by 2% in the first half, gained 11.5% in the second half.

 Religare Gold ETF was the laggard among the gainers in the first half (10%) and the second half (7.59%) respectively.

 

Expense Ratio:

Source: Value Research Online

ICICI Prudential Gold ETF has the highest Expense Ratio amongst all followed by Birla Sun Life Gold ETF.

Year-On-Year Returns

Yearly Returns (in %) terms - (As on 09-11-2011)

All The ETFs have gained in the range of 38.03% to 39.04%.Reliance Gold ETF has gained the most (39.04%) in the category and ICICI Prudential Gold ETF has gained the least (38.03%) amongst all.

Outlook:

ETFs have outperformed all other mutual fund categories under various time horizons. This can also be viewed from the fact that 75-80% of the ETF turnover under the National Stock Exchange (NSE) is governed by the Gold ETFs. Thus the various benefits mentioned above, coupled with satisfying the need of small and medium investors to invest and accumulate gold units through SIPs has made Gold ETFs more and more attractive. ETFs have also outperformed the benchmark index, BSE Sensex and S&P Nifty, which represents the overall market.

Investor interest in ETFs is also attributed to low cost, transparency and ease of transaction. If the trend continues, ETFs corpus will continue to grow and this might lead to more ETF variants being launched in the near future and a more matured ETF market.

In US, there are already different types of Gold ETFs available for trading.

Gold ETFs investing in physical Gold: They are the ones which we have in most countries. As mentioned earlier, they are backed by physical Gold. Some of the Gold ETFs in this category: SPDR Gold Trust (GLD), iShares COMEX Gold Trust (IAU) etc.

Gold ETFs investing in Gold futures: They are the ones which invest in Gold bullion futures rather than directly investing in physical gold. Investors interested in high leverage trade in such ETFs as the leveraged Gold ETFs allow traders to gain multiples of their investment through leverage. One of the Gold ETF in this category: PowerShares DB Gold (DGL).

 

Short Gold ETFs: These ETFs are inverse in nature i.e. when gold prices move northwards, the price of gold ETF comes down. One of the Gold ETF in this category: Ultra Short Gold ProShares (GLL).

 

Gold Miner ETFs: These ETFs invest in the shares of gold mining companies. Some of the Gold ETFs in this category: Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), PowerShares Global Gold & Prec Metals (PSAU). 

 

Top 10 Costliest Indian Stocks

For some people the stock price is not important. But for many investors, stock prices are very important in their lives. If their stock price becomes expensive they will become rich.

Following is a list of 10 costliest Indian Stocks as on 7-Nov-11. This is also supplemented by their key financial indicators in the last two fiscal years. Besides this, the latest key Shareholding stats, Market Cap and Free-Float Market-Cap (FF M-Cap) are also mentioned in the specific stock details.

1)      Orissa Minerals Development Company Ltd.  -    48750.10  `

2)  Dalal Streets Investment Ltd.  -  22182.90  `    

Last Traded Date: 17-Oct-11

3)      Bombay Oxygen Corp. Ltd.  -  7400.00  `

4)      BOSCH Ltd.  -  7001.55  `

5)      Tide Water Oil (India) Ltd.  -  6917.00  `

6)      MRF Ltd.  -  6732.45  `

7)      Ravalgaon Sugar Farms Ltd.  -  5750.00  `

8)      Nestle (India) Ltd.  -  4498.65  `

9)      3M India Ltd.  -  4434.25  `

10)  Kaycee Industries Ltd.  -  3903.10  `

           

Investment vs. Inflation

Inflation is a menace that almost silently erodes your wealth. Inflation which represents a rise in prices, results in a decline in your purchasing power. One of the goals of your investing plan should be to beat inflation.

This post analyses how bank deposits compare vis-à-vis inflation. Additionally, comparison is also on the basis of Inflation vis-à-vis Sensex (equities).

 

The above table showcases the data for 22 years timeframe on following attributes:

a) 1 Year Bank Deposit Rates (%): Deposit Rates for “1-3 years”, higher end of the range picked.

Source: http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12765

b) CPI Inflation (%): Consumer Price Index – Annual Average for “Urban Non-Manual Employees”.

Source: http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12731

Data for 2010-11 assumed to be similar to 2009-10.

c) Sensex Returns (Y-o-Y basis): Calendar Year, 2010-11 Returns (Year-to-Date): Until “9-Sep-2011”.

The average “deposit rates” for the mentioned year comes out to be 9.16%. The average yearly CPI inflation comes out to be 7.89%. The deposit outscores the inflation on an average basis by 1.27%.

For “Sensex”, the average yearly returns are 20.85% vis-à-vis the yearly CPI of 7.89%. The Sensex on an average basis leads banks deposits by 11.7%.

The inflation as can be seen from the table is in the higher band in the later year’s vis-à-vis the previous years. So, while the real return on both the asset classes remains in positive terrain, the margin varies significantly. In bank deposits, there is a margin of just 1% while with Sensex it stretches up to 13%. This means that in bank deposits there is very little scope to accommodate any shocks and one shock of course is that inflation may go northwards.

However, there are few more which are apparently visible:

1) Tax

Every year, the income that you earn on investments becomes liable to tax, depending on your tax bracket. As on date, long term capital gains tax is exempt but it’s not confirmed that things will remain as it is, going forward.

Let’s assume that if one falls in 10% bracket and analyze whether tax has any impact on one’s effective returns. Post tax, bank deposits fetches 8.24% returns and the real return from deposits comes out to be 0.35%. If the tax bracket is increased further, the real return from deposits slips into negative territory.

If we do some back of the envelope calculations for Sensex, tax eats up almost 2% of Sensex returns (10% tax bracket). Post tax, Sensex fetches 18.77% returns and the real return from Sensex comes out to be 10.88% vis-à-vis 12.96% (when tax is not considered).

2) Increased Expenses

Even if your bank deposits did break even, your retirement corpus would need to be able to provide for expenses that will increase post retirement, health care being significant.

Why Equities?

Equities stock prices are inflation adjusted because underlying companies posts results, which are inflation adjusted. Profits are inflation adjusted because if inflation goes up and costs increase, companies will increase their prices too in order to generate profits. However this stands true for good companies which are headed by able managements. They have the competence to deploy sound strategies to maintain margins, either by managing costs or increasing sales.

Equities are risky proposition, aren’t they?

Yes, but only in the short term, equities are risky. In the short term, prices of equity shares are driven by traders and speculators. They look for short term gains and bet on scrips on the basis of tips and information which may or may not turn into reality. However over a long term, all these short term volatilities get evened out and reflect the realistic growth of company.

This typically suggests that equities are good investments to for long term goals, that is, any goal ranging from 7 to 10 years or more. For medium term goals, which range from 3 to 7 years, a decent mix of debt and equity should be ideal. This also involves asset rebalancing when you reach close to goal attainment.

For short term goals, say less than 3 years, one should stick to debt instruments. One thing can easily transform into reality that inflation outdoes debt returns in the short term and you end up failing to attain the short term goals. To counter this, one might have to set aside a little more in that case. As the time period is short, impact cost may not be very high (as it is compounder over a short period).

Let’s assume, buying a car is the respective goal. The bank FD gives you 8% and inflation is 9%, the excess you might have to shell out to buy the car. This excess will be directly proportional to tenure one has set for the attainment of the goal. The more short-term the goal is the more provisioning one has to do for the excess money.

In no case whatsoever, equities can be short-cuts for meeting the excess. One might look for quick-profits from equities on the basis of a stock tips or a recommendations. But the envisaged quick-profits may transform into quick losses and the dreams aligned with the goal may shatter at that very moment.

On the contrary, one might have any provisioning for the excess money, so the solution for this is to defer the goal and set aside a reasonable time to meet that goal with proper planning. The compromise may not sound so good, but its much better w.r.t to a situation where “the short-cuts leads to long term miseries”.

Equities are indeed volatile in the short-term. Also remember, all your other goals can be postponed or pared down but not your retirement which is definitely a long-term goal.

This reiterates the fact that equities as an asset class, work best as a long-term instrument. As it assimilates all the short-term volatilities and reaps long-term benefits.

The trick is simple, to stay put for the long-term.

Sensex and Nifty Cos. – FII holdings trend

Foreign  Institutional  Investors (FIIs) continue to increase their holdings in Sensex and Nifty Companies as per the trend .Analyzing the SHP data, on Quarter-on-Quarter basis, FIIs have increased their holdings in 26 out of 51 companies. On yearly basis, FIIs have increased their holdings in 32 companies.

Though the FII holdings have not significantly increased in any of the companies but the holdings also have not witnessed any deep cut. Amidst the global economic turmoil, FIIs have also adopted a conservative approach and have not been so consistent while investing in the Indian markets.

The following is the trend analysis of FII holdings in 51 Sensex and Nifty Companies in the last 5 quarters. The trend of 5 quarters has been depicted in the form of sparklines. Additionally, advances and declines have been highlighted on quarterly and annual basis.

FII-Holdings Trend:

  

Source: BSE

Q-o-Q basis: 

Analyzing the Top 5 Losers on Q-o-Q basis, Cairn India has witnessed a steep decline of 36.22% from 11.65% in Q4, 2010 to 7.45% in Q1, 2011. The big daddy, SBI has also seen a decline of 15.00% from 12.80% in Q4, 2010 to 10.88% in Q1, 2011. Ambuja Cements, IDFC and Jaiprakash Associates being the other prominent losers on Q-o-Q basis.

 

In the top 5 Gainers category, FIIs have increased their holdings in ONGC from 4.45% in Q42010 to 4.84% in Q12011, accounting to an increase of 8.76% on quarterly basis. Larsen and Toubro stood at a close 2nd position with 8.30%. Siemens, Hindustan Unilever and Coal India taking also witnessed an increase of 7.14%, 6.32% and 4.60% in their respective FII holdings.

Y-o-Y basis:

 

On Yearly basis as well, Cairn India continued it’s dismal show and could not manage to allure the FIIs. It managed a drop of steep 42.15% in it’s FII holdings from Q12010 to Q12011. The other prominent losers are Jaiprakash, Siemens, Bajaj Auto and Dr. Reddy.

In the yearly gainers category, Power Grid managed a whopping increase of 89.15% in FII holdings from a meager 1.46% in Q12010 to 13.46% in Q12011. NTPC being a distant second at 27.68% increase in it’s FII holdings on a yearly basis. The next three in line are Reliance Power, ACC and Tata Power at 21.99%, 16.15% and 12.82%. On reanalyzing the list, 4 out of 5 stocks are from power industry and all 5 stocks are from the ‘Infrastructure’ club.

Coal India, NTPC and Power Grid have witnessed a continuous increase in the FII holdings with every passing quarter. On the contrary, Bajaj Auto has seen a continuous decrease in the FII holdings on quarterly basis.

The average FII holdings for Sensex and Nifty companies have dipped a bit from 18.78% in Q42010 to 18.53% in Q12011.The average FII holdings for Q32010 and Q22010 were 19.08% and 18.71% respectively. This is under the assumption that same set of stocks represent as combined constituents of Sensex and Nifty. Coal India and Sun Pharma are recent inclusions in Sensex with effect from 08-Aug-11 in place of Reliance Infra and Reliance Communications.