The investors who put their money directly in index-specific stocks scored over those who invested in mutual funds in April, as most fund houses gave returns of 5-6 per cent while the benchmark BSE Sensex rose by about 12 per cent in the month.
But, compared to the previous month, the mutual fund schemes showed a recovery in April. Among the sectoral funds, pharma funds gave good returns of nearly 5.8 per cent. In March, several equity schemes witnessed a fall of nearly 10-20 per cent.
The key stock index, the BSE Sensex, rose from 12,455.37 to 13,908, a gain of 1,453 points in April.
During the last year, the pharma, telecom and automobile sector funds had given lower returns compared with banking and technology funds.
"The funds were sitting on huge cash levels during the last two months and did not use the opportunity to pick stocks having attractive valuations.
Even now, there is not enough market participation by the funds as there is a perception that markets might weaken again in the