All that you need to know that happened last week in Mutual Funds.
In a note published this week we ask what is the missing data in Mutual Fund Star ratings? There is no evidence that a 5 Star Rated Mutual Fund will outperform a 4 Star Rated Mutual fund. Not that the rating agencies themselves imply that star rating is predictive of future out performance. As Morningstar says, “We have always been very clear that it’s (Mutual Fund Star Rating) not intended to predict future performance.”
Investor inflows into Small Cap schemes continued as 2 of the 5 most bought schemes this week on Kuvera belonged to this category. The top two equity schemes bought by Kuverians over the last 3 months are also Small Cap Schemes. Investors will now have one more choice in the Small Cap space as BOI AXA Mutual fund gears up to launch its Small Cap fund.
Aug 2018 witnessed Rs 7,600 Crores in SIP inflows compared to Rs 3,469 Crores in Aug 2016 – a jump of 219% in two years. The total SIP inflows this Financial Year (April – Aug) is already at Rs 36,760 Crores, that is 54% of total inflow in the 2017-18 FY. Increased awareness of the simplicity and advantages of SIP is largely responsible for this growth.
Inflation reached a 10 month low of 3.69% in August, down from 4.17% in July. This despite Rupee falling to an all-time low of Rs 72.92 per USD during the last week. August was the first time in the past 10 months in which retail inflation was below RBI’s medium-term target of 4%.
What worked best:
BSE Sensex and NIFTY were down by -0.78% and -0.64% respectively. Small Cap Index was down by -1.34% whereas Mid Cap Index corrected by -0.94% for the week.
| Index | Weekly open | Weekly close | Change |
| BSE Sensex | 38,389.82 | 38,090.64 | -0.78% |
| Nifty | 11,589.10 | 11,515.20 | -0.64% |
| S&P BSE SmallCap | 16,896.95 | 16,670.93 | -1.34% |
| S&P BSE MidCap | 16,504.86 | 16,349.97 | -0.94% |
Source- BSE/NSE
Top 5 best performing funds:
| Name | Week | 3Y | Category |
| CANARA ROBECO GOLD | 2.6% | 4.8% | Fund of Funds |
| DSP WORLD AGRICULTURE | 2.0% | 7.4% | Fund of Funds |
| IDBI GOLD | 1.6% | 3.3% | Fund of Funds |
| ICICI PRU US BLUECHIP | 1.5% | 17.1% | Sectoral |
| EDELWEISS US VALUE | 1.3% | 13.0% | Fund of Funds |
Source – Kuvera.in
What investors bought:
We saw the most inflows last week in these 5 schemes –
| Name | 1Y | 3Y | Category |
| HDFC SMALL CAP | 19.2% | 23.3% | Small Cap |
| MIRAE ASSET EMERGING BLUECHIP | 4.7% | 20.6% | Large & Mid |
| L&T EMERGING BUSINESSES | 5.0% | 23.9% | Small Cap |
| MIRAE ASSET INDIA EQUITY | 8.7% | 17.3% | Multi Cap |
| HDFC MID CAP OPPORTUNITIES | 5.0% | 16.7% | Mid Cap |
Source – Kuvera.in
What investors sold:
We saw the most outflows last week in these 5 schemes (excluding liquid and short-term schemes) –
| Name | 1Y | 3Y | Category |
| ICICI PRU EQUITY ARBITRAGE | 6.5% | 6.7% | Arbitrage |
| HDFC EQUITY FUND | 8.5% | 14.8% | Multi Cap |
| SBI MAGNUM MULTICAP | 5.2% | 16.1% | Multi-Cap |
| ABSL FOCUSED EQUITY | 4.0% | 13.7% | Focused |
| ICICI PRU LARGE & MID CAP | 5.8% | 15.6% | Large & Mid |
Source – Kuvera.in
Movers and shakers at fund house:
1/ Exit load structure of Franklin India Equity Hybrid Fund has been revised by the AMC. Up to 10% of units allotted in past 1 year can now be redeemed/switched out without exit load.
2/Mahindra Mutual Fund has announced the appointment of Srinivasan Ramamurthy as fund manager of Mahindra Badhat Yojana – Multicap Fund, Srinivasan Ramamurthy will be stepping in shoes of Ratish Varier.
3/ Tata Mutual Fund has announced a change in fund management of Tata Ethical Fund and Tata Offshore India Shariah Scheme. Rupesh Patel takes over as fund manager from Pradeep Gokhale.
4/ Reliance Mutual Fund announced Anand Gupta’s appointment as fund manager of Reliance Arbitrage Fund.
Quote of the week:
More money has been lost trying to anticipate and protect from corrections than actually in them. – Peter Lynch
This market update was initially published by CNBCTV18 in the Personal Finance section.
Manvendra Singh Rathore is an Analyst at Kuvera.in: India’s first completely free Direct Mutual Fund investing platform.
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