It's not often that fund managers are caught napping, but that's exactly what happened in November. Consider: Last month the benchmark indices, the Bombay Stock Exchange Sensex and the S&P Nifty, spurted 9.43 per cent and 10.67 per cent, respectively. You have to call them spurts because the last time the indices reacted in such a manner was way back in January 2001. Whatever the reasons-the cut in bank rates, Bill Gates' rah-rah views on Indian software companies, the pick-up on the Nasdaq, you take your pick-the markets had clearly heard something they hadn't for some time.

Surprisingly, although almost everyone within sniffing distance of Dalal Street caught on to the run-up on the bourses, most of the motley mutual fund manager crew missed out. How else would you explain the meagre 7.39 per cent return clocked by the equity-based schemes that are a part of our study! And, remember, this was in a month when it stocks ruled the roost, with the BSE it index shooting up by an astronomical 20.34 per cent. Mercifully, however, it wasn't a total washout, with 15 per cent of the schemes studied succeeding in beating the S&P Nifty, and roughly 44 per cent doing better than the norm.

Those funds that did ride the rally of November could do so largely because of their higher exposures to it stocks. Prudential ICICI Technology Fund dished out the best returns of 18.32 per cent, with Franklin Infotech Fund and UTI Growth Sector-Software not too far behind.

Prudential ICICI was particularly aggressive in HCL Technologies, with CanBank and DSP Merrill also increasing their holdings. Birla Mutual, DSP, Kotak, Tata and IL&Fs took to Visual Soft Technologies in a special way, whilst Mastek caught the fancy of Prudential ICICI, Alliance and Birla. Polaris Software attracted the buying interest of Franklin, CanBank, Kotak and Tata. Alliance, for its part, decided to stay away from the stock. Satyam Computer was a mixed bag with Birla and Franklin buying, and Prudential, Zurich, DSP and HDFC selling the stock. Says Dileep Madgavkar, CIO, Prudential ICICI: "While we would stay invested in the mainline tech companies, we'll also be looking at smaller players in niche segments."

The petroleum sector might have been the flavour of October, but a month is all it took for the public sector oil stocks to fall out of favour, the seemingly never-ending imbroglio over disinvestment being the predictable reason for the see-saw.

As a result, October's best performer quickly became November's worst, with a 7.80 per cent return transforming into a minuscule 0.44 dole-out. Of course, you can't write off BPCL and HPCL yet, and December could once again prove to be the month of the oil PSUs.

The indecision and lack of transparency surrounding disinvestment mean that fund managers have to be on the ball when making a call in these stocks. Many funds that were buying HPCL last month turned sellers. Alliance, Birla, IL&Fs, Prudential ICICI and Tata reduced their exposure. Says Prasad Nalam, CIO, Sundaram Newton, "Churning sectors and stocks would be frequent, since this fund is positioned that way."

Zurich defied the sell-spree, and in fact mopped up more of HPCL stocks. BPCL caught the fancy of Birla, Franklin and Zurich, with HDFC and Tata opting to reduce their holding in the stock. ONGC didn't find much favour either, with a host of funds offloading their holding in that stock.

The month also saw a flurry of interest in a few bank stocks, State Bank of India being the firm favourite. A number of funds invested aggressively in the public sector bank's stocks in November, propelling it to a new 52-week high.

Other banks that made it to the buy list were ICICI Bank, which was bought by Alliance, Birla and DSP Merrill Lynch, and Union Bank of India, which was picked by HDFC Mutual Fund and DSP. Alliance also picked up Punjab National Bank along with Reliance Mutual Fund. The banks that didn't figure on the fund managers' radar in November included Jammu & Kashmir Bank, IDBI Bank, Bank of India, Syndicate Bank, and Bank of Baroda.

The so-called old economy bandwagon didn't witness much movement, with most money managers probably preferring to avoid Larsen & Toubro and Grasim till investigations by SEBI into the latter and the demerger proposal of the former showed signs of reaching a conclusion.

There were funds that reduced their exposure to the old economy pack, but the quantum wasn't significant. Reliance Industries was offloaded by a few fund houses but in very small lots. Fast moving consumer goods stalwart Hindustan Lever was picked up by Birla and Zurich, with Franklin, HDFC and IL&Fs going the other way.