Mutual Fund Weekly Wrap-up: Large-cap Funds Recover, Mid-cap Funds Face The Heat
May 12, 2018

Author: PersonalFN Content & Research Team

Top Mutual Funds

In the week ended May 11, 2018, large-cap stocks recovered sharply, however, mid-cap and small-cap stocks continued to stage a decline for the second week in a row. The probable reason for this is that mid- and small-cap stocks were not able to keep up with large cap stocks with respect to expected earnings. Though valuations have eased, it is still relatively high, leading to additional volatility.

The S&P BSE Sensex & CNX Nifty 50 closed the week up 1.8% each. In comparison, the S&P BSE MidCap Index closed with a loss of 1.3%. The S&P BSE SmallCap Index declined by 1% over the week.

Given this performance of the stock market, most large-cap oriented equity mutual fund schemes closed with decent weekly gains. Naturally, funds with a large-cap focus were among the top-performing mutual funds for the week. Those mutual funds that invested aggressively in mid-cap stocks would have lagged behind. While those with a predominant exposure to Bank and Energy stocks would have gained.

In terms of valuations, the price-to-earnings (P/E) multiple of the S&P BSE Sensex is just under 24 times. The P/E of the S&P BSE MidCap is now at 34x and that of the S&P BSE SmallCap index has fallen to around 80 times on positive earnings.

Despite the easing valuations, the indices continue to trade over twice their long-term average P/E. Hence, could come under pressure with the adverse news.

On shifting the focus on sectoral performances, shares of Bank, Energy, and Metal sectors managed to recover from their lows better than the other sectors. The Nifty Bank, Nifty Energy, and Nifty Metal indices, returned 3%, 3%, and 2.2% respectively. Mutual funds investing in these sectors would have been able to deliver good returns to investors.

Among the sectoral indices that plunged the most in the red were the Nifty Pharma, Nifty Infra, and Nifty Media index. Shares of these sectors fell 4%, 0.9%, and 0.4% respectively. Mutual funds investing heavily in these sectors would have trailed behind the others.

Among equity-diversified mutual HDFC Large Cap Fund, JM Multi Strategy Fund, DSPBR Focus Fund, DSPBR Top 100 Equity Fund, and HDFC Equity Fund topped the list with returns of 2.39%, 1.84%, 1.84%, 1.75%, and 1.65% respectively.

Top Mutual Funds of The Week

Scheme Name 1 Week (%) 3 Months  (%) 6 Months  (%) 1 Year (%)
HDFC Large Cap Fund 2.39 0.29 -0.71 8.86
JM Multi Strategy Fund 1.84 0.64 -0.21 7.29
DSPBR Focus Fund 1.84 1.06 2.53 8.43
DSPBR Top 100 Equity Fund 1.75 3.18 4.06 10.04
HDFC Equity Fund 1.65 -2.62 -2.51 8.76
Kotak 50(D) 1.65 1.72 2.55 10.13
JM Core 11 Fund 1.63 1.64 0.16 11.20
HSBC Dynamic Asset Allocation Fund 1.62 2.92 4.39 14.56
SBI Magnum Comma Fund 1.62 -3.13 -0.65 12.90
Franklin India High Growth Cos Fund 1.62 -4.31 -4.67 6.02
Principal Focused Multicap Fund 1.61 1.78 1.05 11.42
ICICI Pru Focused Bluechip Equity Fund 1.61 0.80 1.61 14.61
HDFC Growth Fund 1.59 -0.04 0.89 13.15
Parag Parikh Long Term Equity Fund 1.55 2.34 3.31 17.50
HSBC Large Cap Equity Fund 1.54 3.16 4.34 13.12
HSBC Multi Cap Equity Fund 1.51 1.66 3.17 11.75
Sundaram Select Focus 1.51 4.18 5.50 16.10
HDFC Top 200 Fund 1.50 -1.84 -2.45 7.31
UTI Bluechip Flexicap Fund 1.46 6.12 10.51 23.69
SBI Magnum Equity Fund(D) 1.44 2.85 3.02 10.75
Data as on May 11, 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 of 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 HDFC Large Cap Fund, DSPBR Top 100 Equity Fund, Kotak 50, JM Core 11 Fund, and Principal Focused Multicap Fund were the top large cap funds with a return of 2.39%, 1.75%, 1.65%, 1.63%, and 1.61%.

SBI Small & Midcap Fund, Mirae Asset Emerging Bluechip, Franklin India Prima Fund, DHFL Pramerica Midcap Opportunities Fund, and Motilal Oswal Midcap 30 Fund were the top mid cap funds & top small cap funds with a return of 0.73%, 0.62%, 0.49%, 0.35%, and 0.22% respectively.

Among multicap funds, JM Multi Strategy Fund, DSPBR Focus Fund, HDFC Equity Fund, HSBC Dynamic Asset Allocation Fund, and SBI Magnum Comma Fund were the top multicap funds with returns 1.84%, 1.84%, 1.65%, 1.62%, and 1.62% respectively.

Top Performing ELSSs of the week

In the ELSS category, HDFC Long Term Advantage Fund, HDFC TaxSaver, Franklin India Taxshield, DSPBR Tax Saver Fund, and Kotak Tax Saver Scheme were the top ELSS funds, generating a return of 1.76%, 1.62%, 1.49%, 1.33%, and 1.31% 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 Mirae Asset Hybrid - Equity Fund, Escorts Balanced Fund, Franklin India Balanced Fund, Reliance Equity Hybrid Fund, and HDFC Prudence Fund.  These schemes delivered a return of 1.20%, 1.16%, 0.92%, 0.91%, and 0.88% 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.


Are These Top Large Cap Mutual Funds Worth Your Investment in 2018?

Editor's note:

PersonalFN has a long track record of offering unbiased mutual fund research services. It analyses thousands of data points to shortlist schemes and also applies a whole host of qualitative parameters to select only a handful schemes for your portfolio.

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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 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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  1. Money Simplified Services Private Limited;
  2. PersonalFN Insurance Services Private Limited ;
  3. Equitymaster Agora Research Private Limited;
  4. Common Sense Living Private Limited;
  5. Quantum Advisors Private Limited;
  6. Quantum Asset Management Company Private Limited;
  7. HelpYourNGO Private Limited;
  8. HelpYourNGO Foundation;
  9. Natural Streets for Performing Arts Foundation;
  10. Primary Real Estate Advisors Private Limited;
  11. Rahul Goel;
  12. I V Subramaniam.

Disclosure with regard to ownership and material conflicts of interest

  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

Disclosure with regard to receipt of Compensation

  1. Neither QIS nor it's Associates have any compensation from the subject Company in the past twelve months.
  2. Neither QIS nor it's Associates have managed or co-managed public offering of securities for the subject Company in the past twelve months.
  3. Neither QIS nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject Company in the past twelve months.
  4. Neither QIS nor it’s Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months except from Axis Bank Limited under a service agreement.
  5. Neither QIS nor it's Associates have received any compensation or other benefits from the subject Company or third party in connection with the research report

General disclosure

  1. The Research Analyst has not served as an officer, director or employee of the subject Company.
  2. QIS or the Research Analyst has not been engaged in market making activity for the subject Company.

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: Website: Tel.: 022 61361200 Fax.: 022 61361222

SEBI-registered Investment Adviser. Registration No. INA000000680, SEBI (Investment Advisers) Regulation, 2013

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