Commentary:
1. This report is primarily useful to evaluate the monthly trend on a weekly basis. As this weekend also coincides with the financial year end 2024, the averages for both 1M and 1Y are given in all the report segments. Also, the top 50 are given for each of the fund types based on 1M Return.
2. Anticipate a separate blog for detailed annual performance analysis of all fund types, similar to the 1M performance analysis here.
3. When you look at the 1M Top 50, other than a few foreign equity based funds and one special fund at the end, most of the performance leaders are the commodity funds.
4. When it comes to fresh investment decisions, our benchmark is that the funds need to have better than top 50 average performance across all timelines from 1M thru 1Y. From this perspective, funds making the cut are shown in green. Please note that these funds are commodity funds. So, green signal is not yet there to resume investment into equity or hybrid funds based on superior 1M performance.
5. Also, the returns which are better than the top 50 average are marked in bold.
6. Please note that the 6M and 1Y return averages for Top 50 are worse than that of Bottom 50, and even all funds average, because the top 50 based on 1M performance are driven by commodity funds which tend to give lower returns annually when compared to equity or hybrid. Once the current broad based correction gets over, such an anamoly will disapper as the equity and hybrid funds will start making it to top 50 based on 1M return.
7. Please note that the Top 50 funds based on 1Y performance have given an average return of 74.52% even after the recent correction. This kind of return is phenomenal. Also, note the bottom 50, even after suffering recent correction, have given a whopping 40.16% annual return.
Therefore, one should assess the end of correction of equity (proven by equity and hybrid funds making it to monthly top 50), and resume the investment into equity funds. It is assumed that those who believe in systemic investment plan will anyway invest into equity even through the correction phase. (I personally prefer to invest into equity funds again at the bottom of correction phase, which I anticipate will be by April end).
8. When one looks at the average annual return of all mutual funds across all types (of course more dominated by equity funds), even after the recent ongoing correction of broader market, it is still a healthy 27.62%. Also, one can see that all equity funds annual return average is 42.26%. So, it is fair to say that a mutual fund investor should have made a minimum annual return of somewhere in between 27.62% and 42.26%, which is approximately 35% annual return for the financial year 2024. If your mutual fund portfolio did not give that kind of a return, you need to look critically as to scope for improvement in your portfolio management and investment decisioning.
9. One month return of pure equity funds have improved significantly thru this week, thanks to the recovery of equity through this week. The recovery is seen thru foreign equity funds, auto, manufacturing, transportation and logistics based funds, and some other themes like ELSS, Midcap etc. But the absence of Large Cap and Small Cap can be noted in top equity 50, as the recovery of the same is not much when compared to the correction gone in.
10. Even the hybrid funds return for the year varied from 22.34% to 34.64%, leading to an average of approx. 28%. This is very impressive return even after the recent corrections of the broader market.
11. As usual, we do not see much variance in debt funds returns, the range is from 7.75 to 9.53, the average of which is slightly better than the bank FD returns. The golder period of debt funds is anticipated, but has not yet arrived, which will happen when interest rates start falling, likely to happen in second half of 2024 calendar year.
12. What is spectacular among commodity funds is the 1M level return. If this kind of return continues in coming months, then the returns on 3M, 6M and 1Y level also will keep improving. I still suggest commodity funds investments as a replacement to the bank FDs as hybrid funds are better bets against risks of equity funds on continued corrections.
13. Looking at the bottom 50 funds across all types based on 1M return, they are lead by IT, Smallcap, Microcap, BFSI, Teck etc. It is sad to see that some flexi cap funds are still in bottom 50.
14. I personally will consider making some more fresh investments into some of the commodity funds marked green, more as a replacement to FD investments. My pause of investments into equity and hybrid still continues, as my strategy is not to invest thru correction but to invest with vengiance into equity and hybrid post confirmation of correction end, which I am anticipating by April end earliest. If the 4th Q results surprise suprelative to anticipation, this can be earlier than April end. Let us see.
15. This analysis is mainly done for my benefit, no harm in sharing with some additional work if it benefits the reader, but this is never a ploy of investment advice to anyone, this is more of a disclaimer.
Equity Top 50 based on 1M Return
Hybrid Top 50 based on 1M Return:
Commodity Top 50 based on 1M Return:
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