Commentary:
1. Value Research considers timeline till 1Y as short term, and the rest beyond as Long Term. I personally consider 1Y timeline as a medium term timeline in between short term and long term.
Therefore, for me 1Y performance benchmark are very important as a bridge between short term game and long term game. I am new to mutual fund investments (just 9 months since I started) and I am not yet ready to give more weightage to the performances beyond 1Y, as my portfolio being small, I like to limit the time horizon to last 1Y performance max for now.
2. Incidentally, the Top 50 performers across all fund types are equity only, hence there seems to be a sense of repetion across all types top 50 and equity only top 50. This trend will continue till the bull market remains strong for the equities. The recent correction has failed to erode the 1Y performance benchmarks of equity funds in favor of hybrid funds. Since such a trend did not pop up through the current short term correction, I am not counting on such a phenomenon to happen short term through the rest of the calendar year, unless there can be a significant correction of equity in parallel with significant interest rate cuts.
3. When it comes to the equity funds investments, I will be waiting for the revival of them in the monthly top 50, and when that happens, this annual leaders list also becomes useful on my fresh investment decisions. Also, rationalizing the absence of some top annual leaders in the monthly leaders ahead will indicate the nature of churn and recovery of equity market. For example, we do not see much of pure large cap funds in the top annual 50 now, but they might start appearing as favorable as the large caps have been doing well through the recent broader market correction phase.
4. If the gap between the pure equity and hybrid funds start narrowing, then hybrid funds investments will also become attractive, the 1Y top 50 given here, will become handy along with the monthly performance leaders as they appear in the top 50.
5. For me personally, it is either debt fund or commodity fund as a replacement to the bank FD. I found out that some of the leading bond funds are not available for the individual investment, for example DSP Credit Risk Fund which is in the top 50. I will continue to invest in leading commodity funds for now till the trend of debt funds beat them due to interest rate cuts ahead.
6. Please read this blog along with the previous blog, which is 1M performance leaders related blog coinciding this cut off date of March 29, 2024 which is a weekend, month end and financial year end simultaneously. Some insights shared in the commentary of the previous blog is not repeated here, but relevant to assess the 1Y performance of mutual funds in general.
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