All that you need to know about Mutual Funds this week
Investors on Kuvera continued to invest with discipline despite the fact that Indian indices faced their biggest weekly fall since August 11, 2017. In line with time tested financial advice to stick to their plans and ignore short term market movements, 70% of investors on Kuvera did nothing. We did see some elevated lumpsum buying to take advantage of better buying levels later in the week.
The BSE Sensex and the NSE Nifty 50 closed lower in all four sessions this week. Friday saw an intraday 3% plunge after reports of DHFL defaulting on its commercial paper. The markets recovered after DHFL clarified the company had not defaulted. DHFL stock still closed down 42.43%. Yes Banks shares fell 28.71% on Friday dragging the NIFTY Bank index down 2.59% after RBI denied current CEO and MD Rana Kapoor a three year extension.
SEBI, in a move to support and boost investments in Mutual Funds, has capped the Total Expense Ratio (TER) of mutual funds on the basis of fund size. The newly announced TER cap is as below:
| AUM Slab (₹ Cr) | TER For Equity Schemes | TER For Non-Equity Schemes (Other than Index, ETFs and FoFs) |
| 0-500 | 2.25% | 2.00% |
| 500-750 | 2.00% | 1.75% |
| 750-2,000 | 1.75% | 1.50% |
| 2,000-5,000 | 1.60% | 1.35% |
| 5,000-10,000 | 1.50% | 1.25% |
| 10,000-50,000 | Reduction of 0.05% in TER with addition of Rs 5,000 crore in AUM | Reduction of 0.05% TER with addition of Rs 5,000 crore in AUM |
| Over 50,000 | 1.05% | 0.80% |
Index Returns:
BSE Sensex and NIFTY were down by -3.28% and -3.23% respectively. Small Cap Index was down by -5.45% whereas Mid Cap Index corrected by -4.61% for the week.
| Index | Weekly open | Weekly close | Change |
| BSE Sensex | 38,090.64 | 36,841.60 | -3.28% |
| Nifty | 11,515.20 | 11,143.10 | -3.23% |
| S&P BSE SmallCap | 16,670.93 | 15,763.10 | -5.45% |
| S&P BSE MidCap | 16,349.97 | 15,595.63 | -4.61% |
Source- BSE/NSE
Top 5 best performing funds:
| Name | Week | 3Y | Category |
| DSP WORLD MINING | 7.2% | 16.4% | Fund of Funds |
| ABSL GLOBAL COMMODITIES | 5.7% | 7.8% | Fund of Funds |
| DSP WORLD GOLD | 5.5% | 6.3% | Fund of Funds |
| RELIANCE JAPAN EQUITY | 3.0% | 10.2% | Sectoral |
| FRANKLIN INDIA FEEDER EUROPEAN | 3.0% | 7.5% | Fund of Funds |
Source – Kuvera.in
What investors bought:
We saw the most inflows in these 5 schemes –
| Name | 1Y | 3Y | Category |
| MIRAE ASSET INDIA EQUITY | 7.1% | 16.2% | Multi Cap |
| L&T EMERGING BUSINESSES | 3.7% | 22.8% | Small Cap |
| KOTAK STANDARD MULTICAP | 4.9% | 15.2% | Multi Cap |
| HDFC SMALL CAP | 16.8% | 22.6% | Small Cap |
| CANARA ROBECO EMERGING EQUITIES | 3.7% | 18.2% | Large & Mid |
Source – Kuvera.in
What investors sold:
We saw the most outflows in these 5 schemes (excluding liquid and short-term schemes) –
| Name | 1Y | 3Y | Category |
| HDFC MID CAP | 2.3% | 15.7% | Mid Cap |
| RELIANCE SMALL CAP | 8.7% | 22.4% | Small Cap |
| RELIANCE EQUITY HYBRID | 4.5% | 13.5% | Aggressive Hybrid |
| SBI BLUE CHIP | 3.2% | 12.4% | Large Cap |
| DSP SMALL CAP | -5.2% | 13.2% | Small Cap |
Source – Kuvera.in
Movers and shakers at fund house:
1/ IDBI Mutual Fund seeks SEBI approval for launching two new schemes to be managed by Ashish Mishra: IDBI Healthcare Fund and IDBI Dividend Yield Fund
2/ UTI Mutual Fund seeks Regulatory approval for launching a new Fund of Funds scheme, UTI Global Focused Growth Equity Fund, that will invest largely in T Rowe Price Funds SICAV Global Focused Growth Equity Fund.
Quote of the week:
Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether. – 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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