Mutual Fund Weekly Wrap-up: Markets Tumble, Dragging Down The Returns Of Top Funds
Jun 30, 2018

Author: PersonalFN Content & Research Team

Top Mutual Funds

In the trading week ended June 29, 2018, the large cap indices came under pressure as the rupee tumbled to an all-time low. The mid-cap and small-cap indices continued to trade in the red, following the declining trend set in the prior months.

The S&P BSE Sensex & CNX Nifty 50 closed the week down 0.75% and 0.99% respectively. In comparison, the S&P BSE MidCap Index closed lower with a loss of 2.45%. The S&P BSE SmallCap Index dropped by 3.07% over the week. Over the past eight weeks, the small-cap index was continuously in the red.

Given this performance of the stocks, most equity mutual fund schemes closed in the red. Funds with an exposure to IT stocks and certain consumer stocks were among the top-performing mutual funds for the week. Those mutual funds that invested aggressively in PSU stocks would have lagged behind.

In terms of valuations, the price-to-earnings (P/E) multiple of the S&P BSE Sensex is just under23 times. The P/E of the S&P BSE MidCap is now at 33x and that of the S&P BSE SmallCap index has stagnated at 99 times on poor 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 macro-economic events.

On shifting the focus on sectoral performances, shares of IT, FMCG, and Metal sectors ranked at the top of the list. The Nifty IT, Nifty FMCG, and Nifty Metal indices, returned 1.54%, 1.17%, and 0.25% respectively. Mutual funds investing in these sectors would have been able to stem the fall.

Among the sectoral indices that plunged the most were the Nifty PSU Bank, Nifty Energy and Nifty Realty index. Shares of these sectors fell 5.31%, 4.41%, and 3.79% respectively. Mutual funds investing heavily in these sectors would have trailed behind the others.

Among equity-diversified mutual funds Axis Bluechip Fund, Axis Multicap Fund, LIC MF Large Cap Fund, Taurus Ethical Fund, and JM Large Cap Fund topped the list with returns of 0.07%, -0.18%, -0.27%, -0.28%, and -0.32% respectively.

Top Mutual Funds of The Week

Scheme Name 1 Week (%) 3 Months  (%) 6 Months  (%) 1 Year (%)
Axis Bluechip Fund 0.07 9.84 6.94 22.26
Axis Multicap Fund -0.18 7.98 6.59 -
LIC MF Large Cap Fund -0.27 5.18 -0.24 8.83
Taurus Ethical Fund -0.28 3.19 -1.68 16.29
JM Large Cap Fund -0.32 2.82 -0.02 6.97
UTI Equity Fund -0.50 7.78 5.36 18.13
IDFC Multi Cap Fund -0.51 2.98 -5.26 8.27
L&T India Large Cap Fund -0.54 2.87 -1.42 8.84
Escorts High Yield Eq -0.55 -2.29 -8.77 1.17
DHFL Pramerica Diversified Equity Fund -0.61 1.56 -5.24 5.00
Canara Rob Bluechip Equity Fund -0.64 5.09 1.89 12.50
DHFL Pramerica Large Cap Fund -0.65 3.55 -1.75 7.08
Edelweiss Multi-Cap Fund -0.67 0.60 -4.17 15.10
L&T Equity Fund -0.68 2.32 -2.18 10.82
IDFC Large Cap Fund -0.70 5.73 -1.93 11.47
Escorts Growth -0.70 0.44 -3.25 14.23
HSBC Large Cap Equity Fund -0.76 4.44 -0.37 9.92
Escorts Leading Sectors Fund -0.79 -0.45 -7.04 10.97
Union Equity Fund -0.79 2.97 -2.35 7.96
Indiabulls Blue Chip Fund -0.85 1.43 -2.59 9.88
Data as on June 29, 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 Axis Bluechip Fund, LIC MF Large Cap Fund, JM Large Cap Fund, L&T India Large Cap Fund, and Escorts High Yield Equity were the top large cap funds with a return of 0.07%, -0.27%, -0.32%, -0.54%, and -0.55%.

In the Large and Mid Cap Fund category, Aditya Birla SL Equity Advantage Fund, Edelweiss Large & Mid Cap Fund, Sundaram Large and Mid Cap Fund, Kotak Equity Opp Fund, and Principal Emerging Bluechip Fund were the top mutual funds with returns -0.87%, -0.89%, -0.97%, -1.37%, and -1.42% respectively.

Motilal Oswal Midcap 30 Fund, Sundaram Mid Cap Fund, DHFL Pramerica Midcap Opp Fund, Aditya Birla SL Midcap Fund, and Taurus Discovery (Midcap) Fund were the top mid cap funds & top small cap funds with a return of -1.09%, -1.48%, -1.48%, -1.65%, and -1.65% respectively.

Among multicap funds, Axis Multicap Fund, Taurus Ethical Fund, UTI Equity Fund, IDFC Multi Cap Fund, and DHFL Pramerica Diversified Equity Fund were the top multicap funds with returns -0.18%, -0.28%, -0.50%, -0.51%, and -0.61% respectively.

Top Performing ELSSs of the week

In the ELSS category, Indiabulls Tax Savings Fund, L&T Tax Advantage Fund, Kotak Tax Saver Scheme, DHFL Pramerica Tax Plan, and DHFL Pramerica LT Equity Fund were the top ELSS funds, generating a return of -0.53%, -0.75%, -0.78%, -0.82%, and -0.86% 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 Union Balanced Advantage Fund, Shriram Hybrid Equity Fund, Sundaram Equity Hybrid Fund, JM Equity Hybrid Fund, and Aditya Birla SL Balanced Advantage Fund. These schemes delivered a return of -0.20%, -0.21%, -0.29%, -0.33%, and -0.36% respectively.

How to invest in the best mutual fund schemes?

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.

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.

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 funds schemes 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! 


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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Details of associates

  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

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