Prajna Capital - An Investment Guide

If 2008 was a bad year for stocks, it was brutal for funds that rode high on the bull run posting big gains last year. Diversified equity mutual funds (MFs) that logged in returns between 70% and 110% in 2007 and emerged on top have put up a dismal show during the current market meltdown. Top MFs in 2007 have significantly underperformed the benchmark indices posting some of the biggest losses this year. In all, 14 funds that were in the top 40 list last year have ended up at the bottom of the ladder, the analysis shows. JM Basic, Canara Robeco Infrastructure, SBI Magnum COMMA and Midcap are some of the funds that have registered huge declines after growing more than 70% last year.Most of these funds invested mainly in engineering, construction, commodities, small and mid-cap stocks - all of which did well during last year’s bull run. But with commodities prices falling sharply and real estate impacted by the demand slowdown, stocks in these sectors have taken a heavy beating. In fact,...