1. The above table gives different averages, across all fund types and specific fund types.
2. When we compare to the report from last week, we see significant correction on 1 week basis. But the returns of the top 50 for 1M thru 1Y are not much impacted though. Since some commodity funds performances are impacted, the 1Y return of Top 50 based on 1M return has improved thru this week.
3. Slight reduction in the Top 50 Commodity funds 1 M Return through this week reconfirms a bit of correction in the coomodity funds through this week.
4. Looking at Top 50 Funds based on 1M Return, it is the same two funds like last week, that made the investment criteria (marked in light greem) which is to have above average return (shown as bold) in all time frames from 1M through 1Y.
5. Most of the funds that made to the Top 50 are the commodity funds like last time.
6. It is interesting to note that two small cap index funds have made to the top 50 list after 4-6 weeks. IT is too early to reconfirm this as the revival of small cap funds. We need confirmation from next few weeks.
7. We look at the Top 50 Funds based on 1Y Return for further insight as to fresh investment eligibility. Nine funds marked in light green have made it to the investment eligibility which is to have above average returns on all time frames from 1M thru 1Y.
One can appreciate the Top 50 List based on 1Y Return as a complement to Top 50 List based on 1M Return here.For example, the fund on the top row here, CPSE ETF, did not make it to the Top 50 based on 1M Return, but still has a decent 1M return inspite of profi erosion of -0.92% through last one week. One may have temporary losses on fresh investment on such funds in near future, if the correction continues, but these funds are likely to be the winners for the future overall, as they have given above average performance for all the timelines from 1M through 1Y. So the bet is that they are likely to recover and march ahead once the temporary correction is over
One can simply wait for another one or two weeks, reconfirm these funds appearance in the list as investment worthy, before fresh investments or take a chance and invest right away.
8. Reintroducing the Bottom 50 based on 1M Return (this was missed on last week report), to appreciate the impact and depth of correction on these funds. You should be concerned as to hold on to these funds, as you might have lost significantly by holding them so far. Most of these loser funds are IT funds. One clarity that emerges from the Bottom 50 funds, is that one needs to be careful in investing on thematic funds. They give good return when the going is good, but then one should abandon them when the theme behind such funds becomes less attractice. IT funds have been sub par since Jan end this year. So one had ample time to get out of them. Recovery of these funds may take longer, and the holder of these funds will further suffer on gains.
9. When the correction of best performing funds started in March, the Bottom 50 showed average 1Y Return at the level of 70 plus percentage. Now, it has come down to 26.60% only, which means lot of correction based gain loss has happened to such funds through last one month.
10. So, the Bottom 50 list is useful as a warning signal for those holding such funds.Be happy if none of these bottom 50 are in your portfolio.
11. As one can see, the Bottom 50 funds based on 1M Return have bled significantly through last one week, causing an average weekly loss of 4%, almost comparable to residual monthly loss % of 4.59%.
12. When we look at the Equity Only Top 50 based on 1M Return, six funds make investment consideration (marked in green) by having above average return in all time frames from 1M thru 1Y. Two funds are included in spite of not having relevant returns in some time frames by being relatively new. They are HDFC Defence Fund and Quant Commodities Fund.
13. This way, this analysis does help to pick up the consistent winners from relatively new funds too. Performance history of minimum 3M is mandated for such considerations.
14. Unlike last week, the equity only Top 50 based on 1Y Return list has more fresh investment worthiness than that of all fund types discussed above. This is because, some funds like CPSE ETF have to wrestle with lower 1M Return average of Top 50 than that was in all fund types.
15. It is only fair to say that the day of superior returns of hybrid funds when compared to equity only funds has not arrived at. When you compare the averages of Top 50 based on both 1M and 1Y across Equity and Hybrid funds, this point becomes clear.
16. Theoretically, one anticipates such time where top hybtid funds are likely to give better return than top equity funds. Hence looking at hybrid funds top 50 list becomes relevant, both from 1M and 1Y list.
17. Far more hybrid funds become fresh investment worthy (marked in green) than the equity funds, as the benchmark average for these funds is lower within the universe of hybrid funds only.
18. I am still curious as when will I get to see performance of top hybrid funds being superior enough to beat the top equity funds. I am also curious to see such hybrid funds in the Top 50 across all fund types. Since such a phenomenon has not occured through the recent corrections, I do have a doubt as to whether top Indian hybrid funds will ever give better return than the top equity funds. I will remain doubtful till I am proved wrong by these hybrid funds. Personally I am investing in some hybrid funds, as their returns are still good, if not as good as top equity funds. While I continue to doubt, I hang on to the faith that one day they will come handy by being better than equity funds.
19. The list of fresh investment worthy hybrid funds based on 1Y return are slightly different when compared to Top 50 of 1M Return. Definitely, those funds which appear in the both the list as investment wortthy are better darlings for fresh investments.A few of such examples are Quant Multi Asset Fund and Quant Dynamic Asset Allocation Fund.
20. Unlike last week, many commodity funds met the fresh investment criteria (Marked in light green). Last week there was a churn out across past performers and recent performers. This time, some funds came to the top with better performance in all time lines from 1M through 1Y.
21. If a commodity fund continues to return more than 20% return annually, it is way too attractive when compared to fixed deposits. So, one needs to look at this list seriously, but if these funds correct significantly within the next one year, that will be sub par performance than fixed deposits. I am hoping that fresh investments will return at least at par with fixed deposits. It is just the hope based judgement than any insight based on reality projection. It is very hard to project reality for next one year. But, I will ride on the hope and make some more investments into commodity funds as a replacement to fixed deposits.
22. Debt funds top 50 is given only to reconfirm that there is no anamoly requiring discussion. This list remains boring.
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