Mutual Fund Weekly Wrap-up: Bank Stocks Drag Down Mutual Fund Returns
Feb 17, 2018

Author: PersonalFN Content & Research Team

TopMutual Funds
In the holiday-shortened week ended February 16, 2018, the S&P BSE Sensex remained steady moving up marginally higher by 0.01%. The CNX Nifty 50, fell marginally by 0.03% over the same period. In comparison, the S&P BSE MidCap Index dropped 0.20%. Stocks present in the S&P BSE SmallCap Index too plunged, dragging the small cap index lower by 0.76%.
 
Given this performance of the stock market, all equity mutual fund schemes were range bound. A few schemes that were predominantly invested in defensive sectors were able to stem the losses. As well as schemes with limited exposure to mid- and small-cap stocks.

Such schemes were among the top performing mutual funds for the week. Those mutual funds that have aggressively invested in Public Sector Banks (PSBs) would have suffered the most.

As news of the Rs 11,500 crore fraud involving state-run Punjab National Bank (PNB) emerged, other state-run banks too took a hit. Mutual funds with an exposure to these banks were negatively impacted.

In terms of valuations, the price-to-earnings (P/E) multiple of the S&P BSE Sensex eased to under 25 times. The P/E of the S&P BSE MidCap is stilling hovering near 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, chances of a further decline cannot be ruled out.

On shifting the focus on sectoral performances, shares of Energy, MNC and Commodities sectors held their ground. The Nifty Energy, Nifty MNC and Nifty Commodities indices, reported gains of 1.18%, 0.47% and 0.25% respectively. Mutual funds focused on these sectors would have been able to restrict losses during the week.

Among the sectoral indices that declined the most were the Nifty PSU Bank, Nifty Media and Nifty Bank index. Shares of these sectors fell 8.38%, 1.94% and 1.18% respectively. Mutual funds investing heavily in these sectors would have suffered.

Going ahead, the pace of earnings will set the tone and direction of the market.

Among equity diversified mutual funds, Templeton India Equity Income Fund, Parag Parikh Long Term Value Fund, Templeton India Growth Fund, HDFC Small Cap Fund, and Axis Midcap Fund topped the list with returns of 1.82%, 1.22%, 0.92%, 0.86% and 0.83% respectively.

Top Mutual Funds of The Week

Scheme Name 1 Week (%) 3 Months  (%) 6 Months  (%) 1 Year (%)
Templeton India Equity Income Fund 1.82 3.19 8.29 22.69
Parag Parikh Long Term Value Fund 1.22 3.27 10.37 22.50
Templeton India Growth Fund 0.92 0.33 5.60 22.60
HDFC Small Cap Fund 0.86 9.31 24.57 46.67
Axis Midcap Fund 0.83 0.49 8.40 24.46
Aditya Birla SL India Opportunities Fund 0.73 10.38 20.99 31.81
Axis Equity Fund 0.69 1.43 5.10 24.37
Sundaram Equity Plus 0.69 2.57 6.33 13.95
DSPBR Small & Mid Cap Fund 0.66 1.22 8.37 20.14
DHFL Pramerica Midcap Opp Fund 0.62 0.20 5.88 15.28
Axis Focused 25 Fund 0.51 1.89 6.15 26.44
UTI India LifeStyle Fund 0.39 0.56 5.81 17.10
Sahara Power & Natural Resources Fund 0.34 -1.19 4.88 23.27
Union Equity Fund 0.32 2.96 4.74 17.58
IDFC Premier Equity Fund 0.27 1.39 6.78 21.55
Mirae Asset Great Consumer Fund 0.25 4.57 12.63 35.13
Axis Multicap Fund 0.20
Union Focussed Largecap Fund 0.19 -0.19 2.36
IDBI Diversified Equity Fund 0.19 3.22 7.64 21.09
Canara Rob Large Cap+ Fund 0.18 2.23 3.22 18.59
Data as on February 16, 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 Templeton India Growth Fund, Axis Equity Fund, Sundaram Equity Plus, Axis Focused 25 Fund, and Union Focussed Largecap Fund were the top large cap funds with a return of 0.92%, 0.69%, 0.69%, 0.51% and 0.34%.

HDFC Small Cap Fund, Axis Midcap Fund, DSPBR Small & Mid Cap Fund, DHFL Pramerica Midcap Opportunities Fund, and Mahindra Unnati Emerging Business Yojana were the top mid cap funds & small cap funds with a return of 0.86%, 0.83%, 0.66%, 0.62%, and 0.14% respectively.

Among multicap funds, Templeton India Equity Income Fund, Parag Parikh Long Term Value Fund, Aditya Birla SL India Opportunities Fund, UTI India LifeStyle Fund, and Union Equity Fund were the top multi-cap funds with returns 1.82%, 1.22%, 0.73%, 0.39% and 0.32% respectively.

Top Performing ELSSs of the week

In the ELSS category, IDBI Equity Advantage Fund, Axis Long Term Equity Fund, DHFL Pramerica Long Term Equity Fund, DHFL Pramerica Tax Plan, and MOSt Focused Long Term Fund were the top ELSS funds, generating a return of 0.38%, 0.38%, 0.36%, 0.33% and 0.11% respectively.

Top Performing Balanced Funds of the week

Balanced funds too declined with the market. Some were able to stem the losses better than the others. The top balanced funds for the week Union Balanced Advantage Fund, Axis Dynamic Equity Fund, Principal Smart Equity Fund, Escorts Balanced Fund, and IDBI Prudence Fund. These schemes delivered a return of 0.30%, 0.29%, 0.20%, 0.11% and 0.09% 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.

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. 

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 mutual fund research.

MustRead

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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.

Disciplinary history

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 India 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

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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: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021. Email: info@personalfn.com Website: www.personalfn.com Tel.: 022 61361200 Fax.: 022 61361222

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