Special MF Report: Post event knee-jerk reaction valuation after RBI monitory policy announcement & weekly Top 50 funds analysis combined as on Dec 06, 2024

 

Commentary:

1. Post event Knee-jerk reaction summary:

For this we are comparing the mutual fund performance summary as of  EOD on Dec 6, 2024 against as of EOD Dec 5, 2024 and evaluating the gain or loss on Dec 6, 2024 due to the RBI monitory policy announcement.

As anticipated, RBI announcement was in line with majority expectations of the market with CRR rate reduced by 50 basis point leading to liquidity for the banks. No change in reverse repo rate as anticipated. So, bottom line the market corrected a bit post announcement as the news was already accounted before and some profit booking occurred.

Looking at the summary of two tables above, the overall equity mutual funds return average reduced from 3.08 to 2.74 for the week, 2.97 to 1.70 for the month. So, there was a knee jerk reaction as anticipated, primarily due to the correction equities held by the funds.

Weekly Top 50 made better gains though as the distinction between weekly winners Vs. the rest became more pronounced.

There is some uncertainity as to whether the equity funds will maintain the upward trajectory for the next two weeks, so caution suggested.

2. Equity Top 50 Analysis

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:

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.

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.

2.1. Weekly Top 50:

To assess the knee jerk reaction, one can compare with the weekly Top 50 a day before as given before, and it is evident that some funds like Motilal Oswal Mid Cap fund slipped from top 50 list due to post event correction, which benefitted IT based funds to come into the list.

2.2. Monthly Top 50:

To assess the post event knee jerk reaction, one can compare with the Monthly Top 50 list a day before, and can see the impact. For example, White Oak Bharat Digital fund saw erosion of gains both weekly and monthly.

2.3. Annual Top 50:

To assess the knee jerk reaction post event, one can compare with the annual top 50 list a day before. For example, the Motilal Oswal Mid Cap fund on the third row saw loss of gains both on weekly and monthly basis though it did not impact the annual gains, which means short term gainers corrected within the fund while the long term gainers did not.

3. Equity Bottom 50 Analysis:

Weekly and monhly bottom 50 funds are used to recognize potential bearish reversal. This is done by identifying below average weekly and monthly returns and above average annual returns. Funds with above average annual return and with both weekly and monthly return below average are marked in darker red, while any one of the weekly and monthly return is below average, marked with light red.

Annual bottom 50 funds list is used to recognize potential bullish reversal. Any fund with above average return for both the week and the month in the list is marked as grey indicating potential bullish reversal.

3.1. Weekly Bottom 50:

3.2. Monthly Bottom 50:

3.3. Annual Bottom 50:

4. Hybrid Funds:

4.1. Hybrid Funds Summary:

4.2. Hybrid Funds Monthly Top 50:

5. Debt Funds

5.1. Debt Funds Summary:

5.2. Debt Monthly Top 50:

6. Commodity Funds

6.1. Commodity Funds Summary:

6.2. Commodity Monthly Top 50:

7. 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.