Mutual Fund Weekly Wrap-up: Large-cap Funds Inch Higher, While Midcaps Embrace Volatility   Apr 14, 2018


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In the week ended April 13, 2018, the bulls remained in control, pushing the market higher. Large-cap stocks continued to shine while some mid-caps came under pressure. With the ongoing results season, the volatility may persist. The S&P BSE Sensex & CNX Nifty 50 closed the week up 1.68% and 1.44% respectively. In comparison, the S&P BSE MidCap Index closed lower with a gain of 0.49%. The S&P BSE SmallCap Index inched higher by 0.55% over the week.

Given this performance of the stock market, most equity mutual fund schemes, including balanced schemes, closed with decent gains. Funds with a large-cap focus gained the most and were among the top performing mutual funds for the week. Those mutual funds that have aggressively invested in PSU and Pharma stocks would have lagged behind.

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 now at 38x and that of the S&P BSE SmallCap index remains around 100 times.

The recent relief over the past couple of weeks has rally pushed valuations higher and the indices continue to trade 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, Metal and Bank sectors managed to close with reasonable gains. The Nifty IT, Nifty Metal and Nifty Bank indices, gained by 5.21%, 3.37% and 1.32% respectively. Mutual funds investing in these sectors would have been able to deliver good returns to investors.

Among the sectoral indices that traded in the red were the Nifty PSU Bank, Nifty Realty and Nifty Pharma index. Shares of these sectors fell 2.59%, 0.82% and 0.48% respectively. Mutual funds investing heavily in these sectors would have trailed behind the others.

Among equity-diversified mutual funds Baroda Pioneer Mid-cap Fund, Kotak Classic Equity Scheme, HSBC Large Cap Equity Fund, Aditya Birla SL India Opportunities Fund, and Aditya Birla SL Special Situations Fund topped the list with returns of 1.90%, 1.65%, 1.60%, 1.54%, and 1.44% respectively.

Top Mutual Funds of The Week

Scheme Name 1 Week (%) 3 Months  (%) 6 Months  (%) 1 Year (%)
Baroda Pioneer Mid-cap Fund 1.90 -3.86 9.91 18.60
Kotak Classic Equity Scheme 1.65 -0.02 5.73 21.34
HSBC Large Cap Equity Fund 1.60 -2.65 1.86 13.56
Aditya Birla SL India Opportunities Fund 1.54 -0.02 14.23 29.89
Aditya Birla SL Special Situations Fund 1.44 -4.04 2.54 18.98
Sundaram Equity Plus 1.42 -0.88 3.62 10.24
L&T India Spl. Situations Fund 1.41 -4.96 5.34 17.74
Axis Focused 25 Fund 1.40 -0.48 5.95 23.09
Invesco India Growth Fund 1.40 0.12 7.04 23.75
UTI Mastershare 1.40 -1.63 5.79 14.78
Tata India Consumer Fund 1.39 -2.13 10.16 35.28
Edelweiss Large Cap Fund 1.30 -0.62 4.73 16.60
HSBC Dynamic Asset Allocation Fund 1.30 -2.25 1.95 13.47
ICICI Pru Focused Bluechip Equity Fund 1.29 -2.99 3.20 15.36
Axis Equity Fund 1.29 1.69 5.38 21.80
Franklin India Flexi Cap Fund 1.29 -3.81 3.15 12.77
BOI AXA Large & Mid Cap Equity Fund 1.27 -5.28 6.56 23.11
SBI Magnum Comma Fund 1.27 -10.39 1.54 14.69
Indiabulls Blue Chip Fund 1.25 -2.03 5.51 14.36
Axis Midcap Fund 1.21 1.30 10.23 24.99
Data as on April 13, 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 having a look at the category wise performance Kotak Classic Equity Scheme, HSBC Large Cap Equity Fund, Sundaram Equity Plus, Axis Focused 25 Fund, and Invesco India Growth Fund were the top large cap funds with a return of 1.65%, 1.60%, 1.42%, 1.40%, and 1.40%.

Baroda Pioneer Mid-cap Fund, Axis Midcap Fund, Sundaram S.M.I.L.E Fund, DHFL Pramerica Midcap Opportunities Fund, DSPBR Small Cap Fund were the top mid cap funds & top small cap funds with a return of 1.90%, 1.21%, 0.97%, 0.95%, and 0.92% respectively.

Among multicap funds, Aditya Birla SL India Opportunities Fund, Aditya Birla SL Special Situations Fund, L&T India Spl. Situations Fund, Tata India Consumer Fund, HSBC Dynamic Asset Allocation Fund were the top multicap funds with returns 1.54%, 1.44%, 1.41%, 1.39%, and 1.30% respectively.

Top Performing ELSSs of the week

In the ELSS category IDBI Equity Advantage Fund, Axis Long Term Equity Fund, IDFC Tax Advantage (ELSS) Fund, L&T Tax Advantage Fund, Indiabulls Tax Savings Fund  were the top ELSS funds, generating a return of 1.53%, 1.48%, 1.31%, 1.25%, and 1.23% 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 were Sundaram Balanced Fund, L&T India Prudence Fund, Principal Balanced Fund, Edelweiss Balanced Advantage Fund, and Shriram Equity & Debt Opportunities Fund. These schemes delivered a return of 0.85%, 0.81%, 0.80%, 0.67%, and 0.63% 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’re unsure where to invest fresh investible surplus currently, to strike the correct risk-return trade-off we recommend adopt a ‘core and satellite approach’ to investing. Here

are 6 benefits of ‘core and satellite approach’:

  • Facilitates optimal diversification;

  • Reduces the risk to your portfolio;

  • Enables you to benefit from a variety of investment strategies;

  • Aims to create wealth cushioning the downside;

  • Offers the potential to outperform the market; and

  • Reduces the need for constant churning of your entire portfolio 

‘Core and satellite’ investing is a time-tested strategic way to structure and/or restructure your investment portfolio. Your ‘core portfolio’ should consist of large-cap, multi-cap, and value style funds, while the ‘satellite portfolio’ should include funds from the mid-and-small cap category and opportunities style funds.

But what matters the most is the art of astutely structuring the portfolio by assigning weightages to each category of mutual funds and the schemes you select for the portfolio. 

Moreover, with change in market outlook the allocation/weightage to each of the schemes, especially in the satellite portfolio, need to change.

Keep in mind: Constructing a portfolio with a stable core of long-term investments and a periphery of more specialist or shorter-term holdings can help to deliver the benefits of asset allocation and offer the potential to outperform the market. The satellite portfolio provides the opportunity to support the core by taking active calls determined by extensive research.

So, PersonalFN offers you a great opportunity, if you’re looking for “high investment gains at relatively moderate risk”. Based on the ‘core and satellite’ approach to investing, here’s PersonalFN’s latest exclusive report: The Strategic Funds Portfolio For 2025 (2018 Edition).

In this report, PersonalFN will provide you with a readymade portfolio of its top equity mutual fundsschemes for 2025 that have the ability to generate lucrative returns in the long run. PersonalFN’s “The Strategic Funds Portfolio for 2025” is geared to potentially multiply your wealth in the years to come. Subscribe now! 

 
 

DISCLOSURE AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014

About the Company including business activity 

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

QIS was promoted by Mr. Ajit Dayal with an objective of providing value-based information / views on news related to equity markets, the economy in general, sector analysis, budget review and various personal products and investments options available to the Public. It was the first company to start equity research on an institutional level.

'PersonalFN' is a service brand of QIS and was started in the year 1999. In 1999, the Company registered the Domain name www.personalfn.com for providing information on mutual funds and personal financial planning, financial markets in general, etc and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services. 

Quantum Information Services Private Limited (QIS) is registered as Investment Adviser under SEBI (Investment Adviser) Regulations, 2013 and having Registration No.: INA000000680. In terms of second proviso to Regulation 3 (1) of SEBI (Research Analysts) Regulations, 2014 the Company is not required to obtain Certificate of registration from SEBI.
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There are no outstanding litigations against the Company, it subsidiaries and its Directors. 

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  3. Equitymaster Agora Research Private Limited;
  4. Common Sense Living Private Limited;
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  7. HelpYourNGO Private Limited;
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  10. Primary Real Estate Advisors Private Limited;
  11. Rahul Goel;
  12. I V Subramaniam.

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  1. Neither QIS, it’s Associates, Research Analyst or his/her relative have any financial interest in the subject Company , except QIS receives fees for providing research to Quantum Equity Fund of Fund (QEFoF) which is Fund of Fund scheme managed by QMF.
  2. Neither QIS, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report.
  3. Neither QIS, it's Associates, Research Analyst or his/her relative has any other material conflict of interest at the time of publication of the research report except that QIS (PersonalFN) is, as per SEBI (Mutual Funds) Regulations 1996, an associate / group Company of Quantum Asset Management Company Private Limited and Trustees and Sponsor of Quantum Mutual Fund (QMF) and to that extent there may be conflict of interest while recommending any schemes of QMF. However any such recommendation or reference made is based on the standard evaluation and selection process, which applies uniformly for all Mutual Fund Schemes. The payment of commission (upfront /annualized & trail), if any, for any Schemes by QMF to QIS (PersonalFN) is also at arm's length and as per prevailing market practices

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Subject Company means Mutual Fund Schemes

Quantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021 Corp. Office: 16 Jolly Maker Chambers II, Nariman Point, Mumbai 400 021. Email: info@personalfn.com Website: www.personalfn.com Tel.: 022 61361200 Fax.: 022 61361222

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