Commentary:
1. Context of this special report:
The Indian equities have been recovering for the last two weeks including this week. The recent equity correction before that has been attributed two major facts: i. Indian GDP growth and the company revenue/profits slowed down thru Q2. ii. Trump win at the US presidential election has sent a bullish wave for the US market, attracting funds flow away from emerging markets, dollar strength is historically high now, can go further high in short future.
After the worst is over, India is recovering slowly on equities in anticipation of Q3 recovery. Rupee is slowly depreciating against dollar, which may be good news for exports, but bad news for imports, and overall India's imports overweighing exports, it is a concern.
In the mean time, the current governer of the RBI's term ends by Dec 12th, and this is the last major announcement of RBI before that on Dec 6th.
The market has already anticipated the following as part of this Dec 6th announcement by RBI:
1. Major boost to the liquidity in the economy by cutting the CRR rate by 50%
2. Due to inflation concerns and Rupee devaluation concerns, the Repo rate will not be cut now, and maintained at 6.5%.
Indian equity market went bullish in the last four sessions of the week, in anticipation of the above announcement. So, post RBI announcement, the following outcomes could be there:
1. Disappointment to the market, causing a significant correction, especially if the CRR rate is not cut.
2. Jubiliation by the market if the rate cut extends to Repo Rate too, in which case there will be jubiliation for the export oriented sectors like IT and interest rate sensitive sectors like real estate, and some correction on import heavy sectors.
3. Neutral reaction as the market has anticipated the announcements, therefore market will behave sideways with a neutral stance on the announcements, with some profit taking for the week may be, leading to a minor pull back.
So, the objective is to take a snapshot of mutual fund performance prior to the announcement and then assess the kneejerk reaction if any, after the last session of the week. Therefore, one more special report will emerge a day after, assessing the knee jerk reaction to the RBI announcement.
Also, another objective is whether to pre-invest in some specific mutual funds with reasonable risk. This is important for me as I have waited against post correction equity mutual fund investments till now, for better clarity as to consistency in the rebound of mutual funds. So, I am ready to make some investment today (which may get invested by funds only on Monday) ahead of the RBI announcements. Please check my assessment statement in this regard at the end of this report.
1. Top 50 Mutual Fund lists
Green and Amber marked mutual funds in the list: Since the focus is not only looking for the performance leaders, but also consistent above average performance across all the timelines from 1W thru 1Y, the consistency of performance is highlighted for eligible funds with green and amber color as follows:
1. Green: If the returns for all the available timelines is above the average within the list. The fund can not be marked green even with this rule if the returns are not available beyond a month, in which case the fund is marked as amber only.
2. Amber: If the returns for all the available timelines is above the average within the list except for one timeline. For this exception, if any of the weekly and monthly returns are above average, then both timelines are considered to have above average return.
These color codes help to avoid investing in a fund due to a furious short term bullishness and then getting stuck beyond with underperformance.
1.1. Weekly Top 50:
1.2. Monthly Top 50:
1.3. Annual Top 50:
2. Conclusion as to pre-investment before RBI announcement on Dec 6, 2024:
It is clear to me that the following mutual fund investments prior to the announcement are reasonable and risk balanced as follows:
2.1. US equity based funds, especially the Mirae Asset NYSE FANG+ETF one, being the top in all three Top 50 lists above.
2.2. Motilal Oswal Mid Cap fund, which is green in the annual list, and amber in the other two lists with reasonable short term returns across 1W and 1M.
3. Whether it is a weekly Top 50 MF report or special MF report, these are availble in the blog indicated below. Blogs are also rendered as videos (on Youtube and Instagram) for those not prefering to read.
Blog: NatsFunCorner! on Blogger
https://natsfuncorner.blogspot.com/
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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.
- The author can not be responsible for the ommissions or errors in the data from Value Research or the data processing errors if any by the author.
- All your investment decisions need to be based on your decision finally, with no blame to anyone else later.
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