Top 50 Mutual Funds Analysis for the week ending on May 31, 2024

 

Commentary:

1. Both equity and hybrid funds corrected through this week.

2. Looking at the Top 50 mutual funds across all fund types, good number of commodity funds made to the list.

3. Only two equity funds and and two commodity fund made to the investment grade by having above average return in all timelines 1M thru 1Y.

4. It is sad to see that no hybrid fund makes it to the Top 50 when equities correct, only to restate that the equity portion of the top hybrid funds are not as well managed as the Top equity funds.

5. Looking at the Bottom 50 across all fund types, we can some thematic funds like Private Bank, IT/Digital/Tech, and even some banking /financial funds.

6. Looking at the Top 50 mutual funds across all fund types based on 1Y return, it is pretty much equity funds only.  Those which are investment grade for having above average return across all timelines from 1M thru 1Y are marked as green.

7. Please note that Bottom 50 Funds list across all fund types based on 1Y return is being discontinued as there is no utility value out there from that list.

8. Looking at the Top 50 equity mutual funds based on 1M return, the investment worthy ones are marked in green for having above average returns from all timelines from 1M thru 1Y.

9. Please note that there is no separate discussion of Top 50 equity funds based on 1Y return as the list is same as the Top 50 mutual funds across all fund types based on 1Y return, which is given above.

10. The bottom 50 equity funds based on 1M Return is to appreciate what thematic funds are underperforming through last one month, and the list includes some annual performance leaders too. 

11. Equity Bottom 50 funds list based on 1Y Return is given to appreciate what equity funds are stuck at bottom 50. One can see the themes of foreign equity, IT/Digital/Tech, Private Bank, and even some Banking/Financial ones here.

12. Looking at the Top 50 Hybrid funds based on 1M return, investment worthy funds are marked in green for having above average returns for all timelines from 1M thru 1Y. Even top 50 hybrid funds corrected through last week while some of the Top 50 equity funds remained positive through the last week.

13. Looking at the Top 50 Hybrid funds based on 1Y return, investment worthy funds are marked in green for having above average returns for all timelines from 1M thru 1Y. 

14. Looking at the Top 50 Commodity funds based on 1M return, investment worthy funds are marked in green for having above average returns for all timelines from 1M thru 1Y. 

15. It is amazing to see that some of the commodity funds crossed annual return of 30%.

14. Looking at the Top 50 Commodity funds based on 1Y return, investment worthy funds are marked in green for having above average returns for all timelines from 1M thru 1Y. 

- Best regards

Top 50 Mutual Funds Analysis for the week ending May 24, 2024

 

Commentary:

1. All fund types had a bullish week. 

2. Looking at the all fund types Top 50 based on 1M return, certain commodity funds too made to the list in addition to the equity funds. Commodity funds went through correction in the second half of the week, and the outlook of commodities as of now is neutral.

3. Based on the above average return across all timelines from 1M thru 1Y, the investment worthy funds are marked green. One commodity fund is marked in amber, as it can not be considered investment worthy at par with equity funds.

4. Looking at the Top50 funds based on 1Y return, the CPSE still maintains leadership, and has hit 120.77% annual return.

5. Investment worthy funds are marked in green based on above average returns in all timelines from 1M through 1Y.

6. Looking at the bottom 50 based on 1M return, one can make note of some thematic funds underperforming in addition to hybrid, debt and commodity fund types.

7. Looking at the bottom 50 based on 1Y return, one can make note of some thematic funds underperforming in addition to hybrid, debt and commodity fund types.

8. Looking at the Top 50 equity funds based on 1M return, funds that are investment worthy, for having above average returns in all timelines from 1M thru 1Y are marked in green.

9. Looking at the Top 50 equity MF based on 1Y return, it is very impressive that the annual return of top 50 has now gone up to an impressive 83.23%  Investment worthy funds for having above average returns from all timelines from 1M thru 1Y are marked in green.

10. Looking at the top 50 hybrid funds based on 1M return, investment worthy funds having above average return in all timelines from 1M thru 1Y are marked in green.

11. Looking at the Top 50 hybrid funds based on 1Y return, the investment worthy funds having above average returns in all timelines 1M thru 1Y are marked in green.

12. Looking at the Top 50 commodity funds based on 1M return, the investment worthy funds having above average returns in all timelines 1M thru 1Y are marked in green

12. Looking at the Top 50 commodity funds based on 1Y return, the investment worthy funds having above average returns in all timelines 1M thru 1Y are marked in green

13. Top 50 Debt fund details will not be included till they become investment worthy for falling interest rates. 

Special MF Report: Top 50 leaders if average across all timeline from 1W thru 1Y are considered! - As on May 17, 2024

 

Commentary:

1. Watch out for the special analysis from time to time, which is to help further simplifying Mutual Fund investment decisions for those who do not want to get too analytical like me.

2. It is a good time to make this special report as the mutual funds have started recovering from two months of correction.

3. This report takes the average of all the returns from all the timelines from 1W thru 1Y. Then it chooses only the top 50. Within top 50, the funds with average return above the average of Top 50 are marked as green.

4. This analysis is done three ways:

- All Fund Types top 50 which is also equity top 50

- Hybrid Top 50

- Commodity Top 50

5. Even if your portfolio does not have the rows marked in green, but do have the ones identified in the Top 50, it is ok. But, for the fresh investments, the ones marked as green should be preferred more.

 

Top 50 Mutual Funds analysis for the week ending on May 17, 2024

 

Commentary:

1. Monthly Top 50 Equity mutual funds recovered through this week by a whopping 5.73% sending the monthly return to 10.42%. The annual return of these 50 funds went up to 49.37%, much closer to the approx. 78% annual return of annual return leaders.

2. Commodity funds further gained through this week, pushing the annual return of top 50 commodity funds closer to 20%. Given the silver shot up on the Friday night session, we will see further bull run on commodity funds through next week too.

3. Since the equity is back in the game fully, the top50 funds both for 1M Return and 1Y Return are dominated by equity funds.

4. Those who have been in the sideline for continuing mutual fund investments can now restart and go for further investments. The leadership scenario may be changing, hence the weekly report helps.

5. More and more annual performance leaders have appeared in the Top 1M Return list, which is quite encouraging for new investments.

6. Since this weekly report is a quantitative analysis report, a stringent criteria is used for fresh investments, which is that the funds within the top 50 need to have above average return in all timelines from 1M through 1Y. While this criteria may make some good funds looking not new investment worthy, whatever funds come across as investment worthy are worthy enough to consider. Since there are too many choices, betther go with stringent criteria.  This week, the following from the 1M Return Top 50 made the investment criteria:

- Canara Robeco Infrastructure Fund

- LIC MF Infrastructure Fund

- DSP TIGER Fund

- HDFC Defence Fund 

- JM Midcap Fund

- HSBC Infrastructure Fund

Bandhan Infrastructure Fund missed out narrowly due to below average monthly return among the top 50.

Many Midcap Funds and some SmallCap funds are appearing back in the Monthly Top 50. This is another sign of correction period getting over for these funds. One can be more confident to invest in these funds ahead.

7. The averages of Bottom 50 too improved through this week. Certain IT  / Tech / Digital Funds are still stuck in the bottom 50.

 

8. Looking at the Top 50 funds based on 1Y Return, the following made to the investment worthiness.

- Invesco India PSU Equity Fund

- Bandhan Infrastructure Fund

- Nippon India Power & Infrstructure Fund

- Franklin Build India Fund

- DSP TIGER Fund

- LIC MF Infrastructure Fund

- Invesco India Infrastructure Fund

9. Please note that the top 5 funds in the list above did not make it to investment worthiness yet as their short term returns across 1M/3M were below average of Top 50.  May be, with further recovery ahead, they will reappear as investment worthy.

10. Two of the Auto ETF Funds that made to the investment worthiness through last week report are still showing above average return for 1M and 3M, therefore no regret for those who invested on these last week. It is just that other funds are becoming more attractive through this week due to better recovery.

11. Bottom 50 based on 1Y Return above is more philosophical statement. Nothing strange to note is the good sign.

12. Equity Only Top 50 Funds list for both 1M Return and 1Y Return are redundant, as the Top 50 across all fund types are completely dominated by equity funds.

13. It was bit disappointing that the hybrid funds did not stand out apart from equity funds while equity corrected in the market. This is because aggressive equity portion of the hybrid funds corrected more severely than the better managed equity funds. It is fair to say that equity portion of hybrid funds are not very well managed like Equity funds therefore, as a general statement.

But the good news is that the equity portion of these funds recovered better through this week, as a result the hybrid funds averages on the Top 50 are improving. Also, more Aggressive Hybrid funds are dominating the list, chasing down the balanced and conservative hybrid funds.

The investment worthy funds are marked in green on both 1M and 1Y Top 50 lists above, not discussing their names, as they were similar names like earlier weeks. There is consistency of leadership in Hybrid Funds therefore.

14. Commodties had a good week this week. As a result the return averages further perked up on both the 1M and 1Y Top 50 lists. However very few funds made it to investment worthiness by having better than average returns for all time lines from 1M through 1Y. Since Silver perked up further on the last session (Friday night) we will see some more bullishness through next week, so one can be very confident to invest in the Silver Funds marked as green in the lists above.

15. One caution for the fresh investments in commodity is that there can be correction on commodities in short to medium term. Those who are more confident of jumping the wagon on such corrections ahead can invest aggressively now. 20% annual return promise on commodity funds is hard to ignore otherwise.

16. Debt funds remain boring till intestest rates start falling. It is interesting to note that there is no consistent performance leader in debt funds Top 50 across 1M and 1Y performance. Wonder whether is more of random accounting issue of attaching interest returns. At least one fund in 1M Top 50 made it to investment worthiness, which is more of an academic statement, and not useful for the individual investor.

17. Bottom line, if you wanted the right time to jump back to pump money to Indian equity funds, that time seems to have arrived for now.  Better returns may appear in weeks ahead unless there is major global risk appears.

I will make it a point to pump in some more money to some of the funds marked here, early next week.

- Best Regards

Nataraja Upadhya  

Top and Bottom 50 MF Analysis for the week ending May 10, 2024

Commentary:

1. The traditional annual leaders went through significant correction through last week. Hencne, there is a churn out of patterns in the top 50. This is bit unsettling, therefore it is advised to apply caution as to making new investments till the new pattern stabilizes for leadership.

2. Looking at the Top 50 based on 1M Return, one can see that average monthly return has shrunk to mere 3.5% out of 2.07% came through the last week, which confirms the churnout in the Top 50 list.

3. Because of this churn out, very few funds displayed investment worthiness, by having above average return for all the timelines from 1M through 1Y. They are marked in green and they are:

- ICICI Prudential Nifty Auto ETF

- Nippon India Nifty Auto ETF

- ICICI Prudential Nifty Auto Index Fund

4. Since the above funds have decent annual return too, one can invest in these funds right away, but caution is that such an investment needs to be treated as short term. Thematic funds can underperform when the slip from the favorite position, so in my case, I will make this as short term investment, meaning to hold till their domination lasts to be in the leaders list and annual return remains above 40% minimum.

Because the monsoon projection is good, rural India demand will perk up for auto, hence this is a safe short term bet if not longer term.

5. Looking at the Top 50 based on 1Y average, there has been a significant weekly correction to the level of 3%, reducing the monthly return average to less than 0.5% and taking approx 5% gain from the average annual gain.

6. In spite of the significant weekly correction, only one fund made it to be investment worthy by having above average return from 1M through 1Y. 

- CPSE ETF

I would wait for one or more weeks to ensure the correction is over for these funds.

7. The correction level on the Bottom 50 funds based on 1M Return is less than that of Top 50 based on 1Y Return. This reconfirms churn out in the leaders list in coming weeks.

In addition to certain hybrid, debt and commodity funds, this list includes some foreign equity and still some IT / Tech/ Digital funds.

8. Look at the Bottom 50 funds based on 1Y Return, and be happy that none of these funds are in your portfolio. Also, get a sense as to how some funds can be a dog in one's portfolio.

9. Overall, hybrid funds did worse than equity funds through this week, again due to the fact that the equity portion of their fund corrected more severely that the equity funds. This makes me to undestand that the hybrid funds are not well professionally managed like the equity funds.

A handful hybrid funds are worthy to complement the equity funds towards giving a balanced approach to equity investments. Otherwise, I am convinced that the hybrid funds are meant for those who are simply looking for up to double the FD returns in their funds for managing the risks against equity.

Unfortunately, my current analysis does not help much on choosing the best performers for the conservative hybrid funds. That is a disclaimer right there. So, I would suggest one to look for the conservative hybrid funds in the Top 50 given, and choose the best among them.  In this weeek, the following fit to such a criteria:

- HSBC Conservative Hybrid Fund

- SBI Magnum Children Benefit Plan - Savings Plan

These kind of funds usually do not appear in top 50, as the aggressive hybrid funds usually rule. Due to correction, these two have appeared, and one can make note for conservative investments, if that is the focus. I do not for now, but in future, I might move some of my FD amounts to such funds.

10. The following funds made investment grade by ensuring above average return across 1M through 1Y. Be wary of potential corrections in the weeks ahead though.

- SBI Magnum Children's Benefit Fund -Investment Plan

- JM Aggressive Hybrid Fund

- 360 One Balanced Hybrid Fund

- DSP Dynamic Asset Allocation Fund

11. Looking at the Top 50 Hybrid Funds based on 1Y return, we see weekly and monthly correction impacts taking away annual gains. Usually, this list is dominated by aggressive hybrid funds. This time we see some balanced funds too, which are bit less aggressive on equity.

The following made investment grade by having above average return on all timelines from 1M through 1Y:

- JM Aggressive Hybrid Fund

- Bank of India Mid and Small Cap Equity & Debt Fund - Direct Plan

- ICICI Prudential Retirement Fund - Hybrid Aggressive Plan

- SBI Magnum Children Benefit Fund - Investment Plan

- ICICI Prudential Child Care Fund - Gift Plan

- UTI Multi Asset Allocation Fund

- Mahindra Manulife Aggressive Hybrid Fund

- Invesco India Aggressive Hybrid Fund

12. There has been significant reovery of coomodity funds through last week resulting in some churn out of leaders.

13. Based on above average returns for timelines 1M thru 1Y, the following have made the investment grade:

- Tata Silver ETF

- Edelweiss Silver ETF

14. Since there is churn out of leadership in commodity funds, I got curious as to which funds make it investment worthiness in this list based on above average return from 1M through 1Y. Only one fund made the cut:

- Motilal Oswal Gold and Silver ETFs FoF

 

15. Though I do not yet invest in debt funds, I wanted to check investment worthy funds within that category based on above average return from 1M through 1Y. Surprisingly, niether on 1M Top 50 and 1Y Top 50, both in these two lists, no debt fund makes the cut. Wonder, why debt funds need to have so much churn out and volitility in the leaders list.

Special MF Analysis report for those asking for silver bullet investment choice answers without having to get into too much details.

 

This special quantitive analysis is to help those who want to make mutual fund investments for long term now and then forget about it for a very long term say 5-10 years ahead.

Currently, this is not my style of MF investment as I am comfortable to limit the performance upto 1 yr only as I am still building my portfolio from scratch for the last one year. However, I like to honor the request and come up with best possible answer quantitatively.  I am providing this answer in two ways:

Option 1. Top 50 funds based on top average return across 1Yr and 3 Yr timelines.

Option 2: Further restriction on Option 1, which is to select only the Top ones based on the average across 1 Yr, 3 Yr and 5 Yr returns.

Let me give the answers per this quantitative analysis first and then discuss the limitations of this analysis.

Option 1: Top 50 funds based on top average return across 1Yr and 3 Yr timelines.

1.1. The picture above provides the Top 50 mutual funds with best average return across 1 Yr and 3 Yr. Since the Indian equity market has shown a different character trend in the last 3 years, assumption here is that one can look into only the combination of 1 Yr and 3 Yr time horizons.

1.2. One can simply say that all these top 50 funds are worthy to be considered for investment ahead as the lowest combined average across 1Yr and 3 Yr is 42.92% which is quite impressive. However, the choices needed are a few, one could only focus on the funds with above average returns for this timeline combo, which are marked in green.

1.3. Again, one wants a few handful ones among these green rows. Therefore one can limit one or few choice per theme, in which case the following are the choices across 5 themes.

1.3.1 Power and Infra theme:

    CPSE ETF (Need to buy it as a stock script)

    Nippon India Power & Infra Fund

1.3.2 PSU theme:

    ABSL PSU Equity Fund

    SBI PSU Fund

    Kotak Nifty PSU Bank ETF

    Nippon India ETF Nifty PSU Bank BeES

    Invesco India PSU Equity Fund

1.3.3 Infrastructure theme:

    HDFC Infrastructure Fund

    Quant Infrastructure Fund

    Franklin Build India Fund

    Bandhan Infrastructure Fund

    Invesco India Infrastructure Fund

    LIC MF Infrastructure Fund

    ICICI Prudential Infrastructure Fund

    Tata Infrastructure Fund

1.3.4 Special themes:

    BHARAT 22 ETF

    ICICI Prudential BHARAT 22 ETF

    DSP TIGER Fund

    Franklin India Opportunities Fund

1.3.5 Cap based funds:

    Quant Mid Cap Fund

    Bandhan Small Cap Fund

    Quant Small Cap Fund

Now that I have done this analysis, I will ensure coverage for all these 22 funds in my portfolio as I build my portfolio through next one quarter. Since I do have a policy to churn 30% of my funds  with short term gain tax and exit load burdens for projected short term underperformance, and I thrive in details and complexity of portfolio, I am ok to have up to 50 funds in my portfolio. My personal commitment is to demonstrate in my portfolio, the returns above the entire equity funds universe of 820 plus funds amounting to 40% annual return for the current market dynamics.  As I mature over years ahead in my MF investments, I will reduce the portfolio to 20 funds or so later.

    Option 2. Top funds based on top average return across 1Yr, 3Yr and 5 Yr timelines.

One's arguement could be that my choices of investment are for very long term, so one wants to include 5 yr return too in computing the top return average. Therefore, option 2 is basically a subset of Option 1 where the funds with no 5 yr data are skipped.

2.1 In the table above, only 18 funds from option 1 make to the list as only these funds have 5 yr return data also.

2.2. One should be comfortable to invest in any of these 18 funds, as the lowest combined average return across 1, 3 and 5 yrs is 36.26%, but one may prefer to focus only on the above average returns, which is 43.24%. In such case, only 7 funds make the cut, and they belong to the following themes:

    2.2.1 PSU Theme

        Kotak Nifty PSU Bank ETF

        SBI PSU Fund

        Nippon India ETF Nifty PSU Bank BeES

    2.2.2 Power & Infrastructure Theme   

         Nippon India Power & Infra Fund

  2.2.3 Infrastructure Theme

        Quant Infrastructure Fund  

         LIC MF Infrastructure Fund

    2.2.4 Cap based Fund Theme

        Quant Mid Cap Fund

  One can reduce the overall choice to only four by picking one per theme here.

Methodology and limitaitons of this quantitative analysis:

1. Only equity funds long term data from Value Research is downloaded. The hybrid funds are ignored as they are unlikely to beat these top equity funds performance benchmarks

2. There are good number of funds with 5 year data but with no 3 year data. This could be a data error on part of Value Research. Since option 1 focuses on 3 Yr performance in addition to 1 Yr performance, such rows had to be ignored. Since option 2 is a subset of option 1, rows with 5 yr return data but with no 3 yr data had to be ignored again.

3. Since Long Term perofmance data of Value Research does not include 1 Yr return, that info is manually populated for the Top 50 funds with 3 yr returns.

4. Since none of the Top 50 funds in option 1 do not have data for  timeline beyond 10 yr, columns of 15 and 20 yr are hidden.