Top 50 and Bottom 50 mutual funds based on last 1M Return across all types of funds - As on March 16, 2024

 

Commentary:

1. Big take away this time is that market direction has confirmed reversal as to the bullishness of equity funds. The commodity funds are ruling the top 50, except for one speciality fund focused on Europe offshore.

2. Therefore, there is no need for me to do over-analysis to figure out the funds that have fallen from top 50 when compared to 28 days prior.  So the report looks simple.  

Instead I have introduced two more information

    - A separate bottom 50 funds report based on last one month return.

    - Average return of all mutual funds (Approx. 1559 this time) across timelines.

- May be I can give the average return of all mutual funds by mutual fund category, from next week. This is something I noticed now, it is too late to go back and do the further donkey work.

3. One can see that the 3M, 6M, and 1Y average of Top 50 funds is lower than that of entire MF universe across all types of funds. This is because majority of funds are either equity or hybrid, and they still have a sizable return in these timelines when compared to the commodity funds in the top 50, whose returns across these timelines will be slightly better than the fixed deposits.

4. Another key observation is that either the debt funds or the hybrid funds have not made into the top 50 list. This is because commodity funds are way ahead of them in 1M performance.  

5. As per the current trend, one can park excess money in top performing commodity funds, for returns superior than fixed deposits.

6. We do not know as to how long and how deep this bearishness will cast on equity funds. May be, equity funds will pop in top 50 after one or two weeks, or not.

7. We get one more chance of Top 50 and Bottom 50 report before this financial year ends for any liquidation of existing mutual fund investments for tax purposes. I am not making any recommendation as to such decisions as I may not be qualified for the same, and also it depends on one's investment strategy. For example, one committed to the Systemic Investment Plan will continue to make regular payments and get more units for those payments due to reduced NAV of such funds.

8. But I am very clear as to my investment approach. Looking at the bottom 50 funds report, the smallcap and microcap are way too underpeforming, and it is unlikely that they will see a reversal soon, and if there is any reversal, then we can see so in the weekly analysis ahead. Since I have next 15 days to liquidate some of my existing MF investments for FY 2024 tax adjustments, I am going to liquidate all pure play small cap and micro cap funds fully, because I will keep this money in the sideline to reenter when they start popping up in the top 50 performance again. Also, given the financial year end and no projection of quick revival of smallcap and microcap, many people like me going for liquidation can create a run on the bank condition on such funds, so we may find worse performance of these funds through next two weeks before things become better for them.  Again, this is not what I am asking you to do, as a disclaimer.