Budget, Growth, Record US Economic Expansion & Other MF News

All that you need to know about Mutual Funds this week

India’s first woman FM presented her maiden budget yesterday. The highlight was a commitment to grow our economy from $3 Trillion this year to $5 Trillion in 5 years i.e a growth of 10.75% in nominal USD terms every year. Historically the fastest that any economy has grown from $3 Trillion to $5 Trillion is China in 4 years from 2005 to 2008. Let us know if the growth is achievable in our online poll.

Here are our top picks for investors on what is proposed in this budget:

  • Infrastructure spending of Rs 100 lakh crore over the next 5 years 
  • Rs 70,000 Crore allocated for public sector bank recapitalization
  • Increase the minimum public shareholding limit in listed companies to 35% (from 25%)
  • Customs duty on gold increased from 10% to 12.5%
  • Tax on buybacks by listed companies at 20% to bring parity with dividend distribution tax

 

The US economy has grown for 121 consecutive months, since June 2009, following the Great Recession, marking the longest economic expansion in American history. The US stock market has followed the economy with the S&P 500 and Nasdaq 100 both making new all-time highs this week.

We have had an international allocation since the start in our recommended portfolio through the ICICI Prudential US Bluechip Fund, and we reiterate the importance of international diversification.

The AUM of the mutual fund industry increased 11.4% YoY to Rs 23.79 lakh crore in March 2019, shows the Economic Survey of India 2019. However, Mutual Funds witnessed net inflows of Rs 1.1 lakh crore in FY 2018-19, down 60% YoY from the net inflows of Rs 2.7 lakh crore in the previous financial year.

Sundaram Mutual Fund will amend the minimum investment/redemption limit for all equity funds (excluding ELSS) to Rs 100. The proposed changes will come into effect from 8th July.

 

Index Returns
Index Weekly open Weekly close Change
BSE Sensex 39,394.64 39,513.39 0.30%
Nifty 11,788.85 11,811.15 0.19%
S&P BSE SmallCap 14,239.33 14,141.83 -0.68%
S&P BSE MidCap 14,808.34 14,725.65 -0.56%

Source- BSE/NSE

 

Top 5 best performing funds
Name Week 3Y Category
HSBC Brazil 2.3% 16.4% Fund of Funds
Reliance Nivesh Lakshya 2.2% NA Long Duration
DSP World Agriculture 2.0% 6.3% Fund of Funds
Edelweiss Greater China 1.9% 16.1% Fund of Funds
Principal Global Opp 1.9% 12.4% Fund of Funds

Source – Kuvera.in

 

Top 5 worst performing funds
Name Week 3Y Category
Tata Digital India -2.4% 16.6% Sectoral
JM Core 11 -2.2% 17.0% Focused Fund
IPRU Dividend Yield -1.8% 11.0% Dividend Yield
Baroda Mid Cap -1.8% 10.5% Mid Cap
Tata Infrastructure -1.8% 11.6% Sectoral

Source – Kuvera.in

 

What investors bought

We saw the most inflows in these 5 Funds –

Name 1Y 3Y Category
Mirae  Large Cap 14.8% 17.1% Large Cap
Kotak Standard Multicap 13.4% 16.1% Multi-Cap
Parag Parikh LTE 7.3% 14.8% Multi-Cap
HDFC Small Cap 0.6% 17.3% Small Cap
Mirae Emerging Bluechip 16.3% 18.8% Large & Mid Cap

Source – Kuvera.in

 

What investors sold

We saw the most outflows in these 5 Funds –

Name 1Y 3Y Category
Invesco India Contra 7.8% 17.2% Contra Fund
DSP Equity Opp 9.5% 13.8% Large & Mid Cap
ABSL Frontline Equity  8.4% 12.2% Large Cap
SBI Blue Chip 9.9% 12.0% Large Cap
UTI Nifty Next 50 Index -2.3% NA Index Fund

Source – Kuvera.in

 

Movers & Shakers

1/ Axis Mutual Fund has announced that Vijayalakshmi Rajaram Iyer has been appointed as an Independent Director on the board of Axis Mutual Fund Trustee Limited.

2/ Union Mutual Fund has appointed Vinay Paharia as a Co-Fund Manager of Union Large-cap Fund and Union Tax Saver Schemes.

3/ Principal Mutual Fund has announced that V S Mathur and H M Singh have ceased to be independent directors of the board of the Trustee Company.  Raman Uberoi and Ameet Parikh have been appointed in their stead.

 

Quote of the week:

Budgeting has only one rule: Do not go over budget.

: Leslie Tayne

 

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