Monthly Top 50 mutual funds analysis as on Aug 2, 2024

 

Commentary:

1. Mutual funds, on average had a positive week for all fund types and a positive month except for the commodities. Equity Monthly Top 50 average returns is subdued to 9.2%.  Equity Annual Top 50 average was subdued to 74.29%. However, the equity MF universe average return prevailed at an impressive 41.34% annually while the monthly average was bit subdued at 2.63%. What this tells is that equity mutual funds returns on average is discelerating.

 

2. Looking at the Equity Monthly Top 50, the pharma / healthcare funds are ruling the list. Some FMCG, Tech, and PSU funds are also in the list. The one in the green are those with above average returns in all timelines from 1M thru 1Y, those with Amber color are those with above average return in all timelines from 1M thru 1Y except for one timeline. It is prudent to invest in pharma funds now, especially for those who are short term investors in mutual funds. The pharma funds are the Beta funds when the market takes a breather from bull run, and they can quickly go out of fashion when the bull run returns. The lower annual returns of the pharma funds indicate the same. But, the pharma funds may do well thru next one or two months.

3. We look at the Monthly Bottom 50 funds list to identify the potential bearish reversals of some funds. For this we look for the annual return to be above average (marked in Bold Black) and the monthly or weekly returns below average (Marked in Bold Red). The fudns meeting this criteria are marked in Bold Red.  The worthy ones to note here are the HDFC Defence Fund, UTI BSE Housing Index Fund, ICICI Prudential Commodities Fund, Mirae Asset NYSE FANG+ ETF. Related fund categories need to be viewed with suspecion for further corrections ahead.

4. Looking at the Equity Annual Top 50 list above, the one in the green are those with above average returns in all timelines from 1M thru 1Y, and the one in Amber are those with above average returns in all timelines from 1M thru 1Y except for one timeline.

5. We look at the Equity Annual Bottom 50 funds for the bullish reversal of underperforming funds. (The Title Equity Bottom Top 50 should be read as Equity Annual Bottom 50). The potential bullish reversal candidates are marked in bold for having an above average return in Weekly or Monthly timelines and also the above average return in the Annual timeline. Sad news is that the bunch of Nifty Bank ETF funds at the bottom of the list are yet to show the bullish reversal sign, ideally they should not have been in this list. But for being in this list, they should have had a bullish reversal sign, which they do not have, which means they will continue to drift with sub par performance ahead.

6. In both the Hybrid Monthly Top 50, and the Hybrid Annual Top 50 lists above the green and amber lines are marked for the funds per the same critieria as explained in the equity funds.

7. Looking at the Monthly Top list of Commodity funds, none of the funds made it to the green status and only one made it to the Amber status. There is clearly a leadership divergence across different timelines causing this anamoly. Because the Commodty funds had a good week of bullish reversal, may be it is safer now to reenter them for an annual average return of 10% for the short term.

Disclaimer:

- This is not a solicitation for mutual fund investment nor an advice. It is only an insight to help investment decisions based on the free MF performance data downloaded from Value Research. Investment decisions are only yours to make.

- Mutual fund investments are subjected to market risk. Read the propsectus of a mutual fund for all the risk information associated prior to investment.

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