Index Out-Performance, Directs Plans Cheaper & Other MF News

All that you need to know about Mutual Funds this week

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Index funds have outperformed actively managed funds over the last year. While NIFTY has advanced around 12% in the last financial year, average returns by large-cap Mutual funds remained at 8.92%. We have been a proponent of index first approach to portfolio construction since the start and you can see our index recommendations here.

In the past year, large-cap Index has out-performed the mid-cap Index.

 

However, in the long run, the mid-cap Index does better. Over the past 16 years, your investment in the mid-cap Index would have returned 19% annually vs 17% annually for the large-cap index.

 

Enter Nifty Next 50, which is our recommended large-cap index. Nifty Next 50 Index is 45% of our equity basket allocation. Over the past 16 years, an investment in Nifty Next 50 would have returned 21.12% annually vs 19% annually for the mid-cap Index.

 

Direct funds are cheaper than ever before, with the revised cost slabs for mutual funds kicking in from April 1. Retails investors benefit from the change in TER norms as prescribed by SEBI earlier during October 2018.

Select Mutual Funds with exposure to Essel Group have clarified on their plans to process redemptions in schemes impacted by such exposure.

HDFC has rolled over the redemption of one of its FMP by around 1 year, they issued a statement saying that

The purpose of rollover/extension is due to the current interest rate scenario and portfolio positioning, the yields prevailing in the short maturity bucket present an option for investors to lock in their investments at the current prevailing yields.

Kotak Mahindra group spokesman Rohit Rao was quoted saying –

We are working closely with the Essel group for optimal recovery from Konti & Edisons for the benefit of our unit-holders as we believe such recovery will take place albeit with some delay. 

 

Mirae Asset has approved the change in Fundamental attributes of Mirae Asset India Equity Fund. The scheme will change from a multi-cap fund to a large cap one from 1/May onward and will be named Mirae Asset Large Cap Fund. Unitholders of Mirae Asset India Equity Fund who do not wish to retain their holdings in the scheme can redeem their units without any exit load between 1/Apr and 30/Apr 2019.

 

Index Returns
Index Weekly open Weekly close Change
BSE Sensex 38,767.11 39,140.28 0.96%
Nifty 11,643.45 11,752.80 0.94%
S&P BSE SmallCap 15,022.18 15,021.20 -0.01%
S&P BSE MidCap 15,426.45 15,382.57 -0.28%

Source- BSE/NSE

 

Top 5 best performing funds
Name Week 3Y Category
FRANKLIN FEEDER EURO  3.3% 5.2% Fund of Funds
UTI TRANSPORT & LOGI 2.9% 6.3% Sectoral
FRANKLIN BUILD INDIA  2.0% 16.8% Sectoral
KOTAK TAX SAVER 1.9% 16.3% ELSS
KOTAK BLUECHIP 1.9% 13.7% Large Cap

Source – Kuvera.in

 

Top 5 worst performing funds
Name Week 3Y Category
KOTAK WORLD GOLD  -4.1% -4.7% Fund of Funds
HSBC BRAZIL -3.2% 17.4% Fund of Funds
ABSL GOLD -2.9% 1.9% Fund of Funds
DSP WORLD GOLD  -2.3% -1.6% Fund of Funds
KOTAK GOLD -1.6% -4.7% Fund of Funds

Source – Kuvera.in

 

Top 5 best performing ELSS funds
Name Week 3Y Category
KOTAK TAX SAVER 1.9% 16.3% ELSS
BNP PARIBAS LONG TERM EQUITY 1.7% 11.1% ELSS
DHFL PRAMERICA LONG TERM EQUITY 1.5% 11.8% ELSS
UNION TAX SAVER 1.4% 10.5% ELSS
BARODA PIONEER ELSS 96 1.3% 10.7% ELSS

Source – Kuvera.in

 

What investors bought

We saw the most inflows in these 5 Funds –

Name 1Y 3Y Category
PARAG PARIKH LTE 9.6% 15.1% Multi-Cap
HDFC SMALL CAP -2.5% 21.2% Small Cap
KOTAK MULTICAP 8.5% 18.1% Multi-Cap
L&T EMERGING BUS  -11.3% 20.8% Small Cap
CANARA EMERGING EQ 0.9% 19.0% Large & Mid Cap

Source – Kuvera.in

 

What investors sold

We saw the most outflows in these 5 Funds –

Name 1Y 3Y Category
SBI MAGNUM MULTI 2.9% 15.2% Multi-Cap
PRINCIPAL MULTI CAP -0.3% 17.4% Multi-Cap
TATA INDIA CONSUMER -2.7% 23.0% Sectoral
MIRAE INDIA EQUITY  11.3% 19.0% Large Cap
SBI MAGNUM MIDCAP  -8.2% 8.5% Mid Cap

Source – Kuvera.in

 

Movers & Shakers

1/LIC Mutual Fund announced the resignation of Hemant Bhargava and appointment of M.R. Kumar as Associate Director on the Board of LIC Mutual Fund Asset Management Limited.

2/ Principal Mutual Fund has announced the launch of the Principal Small Cap NFO. This open-ended equity scheme will be open for subscription from 22/Apr.

Quote of the week:

Patience is not simply the ability to wait – it’s how we behave while we’re waiting.

: Joyce Meyer

 

This market update was initially published by CNBCTV18 in the Personal Finance section.

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