Mutual Fund Weekly Wrap-up: Top Mutual Funds Plunge Into The Red   Mar 10, 2018

TopMutual Funds

In the week ended March 9, 2018, the S&P BSE Sensex, came under severe pressure, despite efforts for a recovery. The index closed lower by 2.17%. The CNX Nifty 50, fell by 2.21% over the same period. In comparison, the S&P BSE MidCap Index dropped 2.88%. The S&P BSE SmallCap Index fell by 4.31%.

Given this performance of the stock market, all equity mutual fund schemes ended in the red. IT and FMCG stocks were able to restrain the fall. Such schemes investing in this space were among the top performing mutual funds for the week. Those mutual funds that have aggressively invested in PSU Banks and Pharma sectors would have suffered the most.

In terms of valuations, the price-to-earnings (P/E) multiple of the S&P BSE Sensex hovers around 23 times. The P/E of the S&P BSE MidCap is lingers under 40x and that of the S&P BSE SmallCap index remains above 100 times.

All the indices are trading over twice their long-term average P/E. Hence, could come under pressure with adverse news.

On shifting the focus on sectoral performances, shares of IT, FMCG and Auto sectors managed to restrict the losses. The Nifty IT, Nifty FMCG and Nifty Auto indices, reported losses of 0.17%, 1.78% and 2.32% respectively. Mutual funds investing in these sectors would have been able to lower the losses.

Among the sectoral indices that declined, the most were the Nifty Metal, Nifty PSU Bank and Nifty Pharma index. Shares of these sectors fell 6.89%, 5.41% and 4.51% respectively.  Banks came under pressure once again, as PSU banks extended their losses. Mutual funds investing heavily in these sectors would have suffered.

Among equity-diversified mutual funds, Parag Parikh Long Term Equity Fund, Axis Multicap Fund, Sundaram Equity Plus, Invesco India Dynamic Equity Fund and UTI India LifeStyle Fund topped the list with returns of -0.85%, -1%, -1.16%, -1.24%, and -1.25% respectively.

Top Mutual Funds of The Week

Scheme Name 1 Week (%) 3 Months  (%) 6 Months  (%) 1 Year (%)
Parag Parikh Long Term Equity Fund -0.85 0.48 7.13 20.27
Axis Multicap Fund -1.00 -1.59
Sundaram Equity Plus -1.16 1.20 2.61 11.01
Invesco India Dynamic Equity Fund -1.24 -1.90 -0.99 15.86
UTI India LifeStyle Fund -1.25 -1.75 3.93 15.13
Canara Rob F.O.R.C.E. Fund -1.26 -1.97 0.14 18.32
Taurus Ethical Fund -1.37 1.03 8.20 20.09
Axis Midcap Fund -1.38 -1.44 4.72 25.71
Sundaram Select Focus -1.38 -1.35 1.94 20.21
UTI Equity Fund -1.39 0.93 3.88 15.59
UTI Bluechip Flexicap Fund -1.40 0.63 5.12 21.27
Invesco India Business Leaders Fund -1.41 -0.23 3.66 16.11
ICICI Pru Multicap Fund -1.48 -0.62 5.03 12.60
Axis Equity Fund -1.49 -0.93 1.62 22.50
Taurus Discovery Fund -1.59 0.20 5.44 26.94
ICICI Pru Dynamic Plan -1.59 -1.42 6.14 13.13
Escorts Leading Sectors Fund -1.62 -2.40 5.27 16.38
Sahara R.E.A.L Fund -1.64 -0.97 0.41 22.57
Tata Ethical Fund -1.66 -2.38 5.37 19.24
Tata India Consumer Fund -1.67 -3.24 4.81 33.84
Data as on March 10, 2018. Returns are absolute
(Source: ACE MF, PersonalFN Research)

*Please note, this table only represents the best performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme related documents carefully. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.

Category-wise Top Performing Equity Mutual Funds of the week

On taking a look at the category wise performance  – Sundaram Equity Plus, Invesco India Dynamic Equity Fund, Canara Robeco F.O.R.C.E. Fund, Sundaram Select Focus and UTI Equity Fund were the top large cap funds with a return of -1.16%, -1.24%, -1.26%, -1.38%, and -1.39%.

Axis Midcap Fund, Taurus Discovery Fund, HDFC Mid-Cap Opportunities Fund, DSPBR Small & Mid Cap Fund, and Franklin India Prima Fund were the top mid cap funds & small cap funds with a return of -1.38%, -1.59%, -1.76%, -1.78%, -1.79% respectively.

Among multicap funds, Parag Parikh Long Term Equity Fund, Axis Multicap Fund, UTI India LifeStyle Fund, Taurus Ethical Fund and UTI Bluechip Flexicap Fund were the top multicap funds with returns -0.85%, -1%, -1.25%, -1.37%, and -1.40% respectively.

Top Performing ELSSs of the week

In the ELSS category, MOSt Focused Long Term Fund, Taurus Tax Shield Fund, Axis Long Term Equity Fund, ICICI Prudential Long Term Equity Fund and Aditya Birla SL Tax Relief '96 were the top ELSS funds, generating a return of -1.39%, -1.40%, -1.51%, -1.62%, and -1.73% respectively.

Top Performing Balanced Funds of the week

Balanced funds were able to deliver restrict losses better with the debt component, but were not able to stay out of the red. The top balanced funds for the week Tata Regular Saving Equity Fund, Principal Smart Equity Fund, L&T Dynamic Equity Fund, ICICI Prudential Balanced Advantage Fund and MOSt Focused Dynamic Equity Fund. These schemes delivered a return -0.46%, -0.51%, -0.60%, -0.60% and -0.69% respectively.

How to invest in the best mutual fund schemes?

PersonalFN suggests that you must take a closer look at the performance of your mutual funds. Staying invested in funds with a proven track-record of consistent performance may pay off in the long run.

While we acknowledge that, even the best systems and processes cannot predict the top mutual funds of the future, as an investor, you need to pick the right and suitable funds to meet your financial goals.

Hence, a process that combines both quantitative and qualitative factors has a good chance of picking funds that can deliver decent market-beating returns. The quantitative factors will cover the fund’s performance across multiple periods and market cycles, as well as the fund’s ability to manage risk among other factors.

The qualitative factors will take into account the fund manager’s experience, the performance of the fund house across multiple schemes, as well as the quality of assets in the portfolio, to name a few. Thus, when analysing a fund across both quantitative and qualitative parameters, you will be able to pick a fund that has a promising future.

PersonalFN adopts such a process to shortlist the potentially best mutual funds for its subscribers.

Thus, in the interest of your long-term financial wellbeing, it is best that you wisely structure and review your mutual fund portfolio. If you are unsure where to invest fresh investible surplus currently, to strike the correct risk-return tradeoff we recommend adopt a ‘core and satellite approach’ to investing. 

In times of volatility, a Systematic Investment Plan (SIP) would undoubtedly be a prudent route as compared to investing your corpus as a lumpsum. When investing in equity, it is important to keep a long-term investment horizon of five to seven years or more, even if you are investing via a SIP.

Editor's note:

If you are worried about the unpredictability of the equity markets and confused about which mutual funds to invest in this year, don’t worry.

PersonalFN’s latest exclusive report: Top 5 Equity Funds To Invest In 2018 has been created keeping the current Investment Scenario in mind.

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Quantum Information Services Private Limited (QIS) was incorporated on December 19, 1989. 

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