All that you need to know about Mutual Funds this week
Tax Harvesting is a technique that utilises the ₹1 Lakh annual LTCG exemption by selling and buying back part of your investment such that you “realise” gains and not pay taxes on them. At a 10% LTCG tax rate, you could save up to Rs 10,000 in LTCG taxes every year by doing this diligently. You can learn the details here.
The Mutual Fund industry AUM increased 5% in May to Rs 25.43 lakh crores. 5.54 lakh new folios were added in May bringing the total folio count to 8.32 lakh crore. Mutual funds saw a net inflow of Rs 77,000 crore in May. Inflows into equity funds, including ELSS, stood at Rs 4,969 crore. Net inflows into index funds surged more than 12 times from ₹18 crore in April to ₹220 crore in May.
Inflows into Index Funds have increased as evidence mounts that active funds fail to outperform their benchmark indices. S&P Index versus Active or SPIVA has been the trusted name globally to this comparison. They report annually on how active funds have performed against benchmark indices. What gives SPIVA report credibility is that they correct the data for survivorship bias. The SPIVA 2018 report shows that 64% of large-cap active funds underperformed S&P BSE 100 index over the past 10 years. The complete table is below.
You can access the complete report here.
DHFL has repaid Rs 962 crore in delayed interest payments on Non-Convertible Debentures. The company also clarified that the payments were made within the cure period of seven working days in its release filed with the exchanges on June 11. Credit rating agencies including ICRA and Crisil have removed the company from the watch with negative implications. Per SEBI guidelines, once security is rated ‘D’, the rating agencies would have to wait for three months before evaluating any upgrade.
Howard Marks, the legendary investor at Oaktree Capital, in his recent newsletter described the three stages of a bull market as –
- Stage 1: when only a few forward-looking people begin to believe things will get better
- Stage 2: when most investors realize improvement is actually underway
- Stage 3: when everyone concludes that things can only get better forever
A quick twitter survey revealed, 25% of investors think we are in Stage 1, 35% in Stage 2 and 40% think we are in Stage 3. What do you think?
You can read the complete newsletter here.
Index Returns
| Index | Weekly open | Weekly close | Change |
| BSE Sensex | 39,615.90 | 39,452.07 | -0.41% |
| Nifty | 11,870.65 | 11,823.30 | -0.40% |
| S&P BSE SmallCap | 14,657.09 | 14,365.93 | -1.99% |
| S&P BSE MidCap | 14,906.38 | 14,720.99 | -1.24% |
Source- BSE/NSE
Top 5 best performing funds
| Name | Week | 3Y | Category |
| DHFL MEDIUM TERM | 5.0% | -16.5% | Medium Duration |
| BNP LOW DURATION | 4.9% | 7.4% | Low Duration |
| EDELWEISS GR CHINA | 3.3% | 13.3% | Fund of Funds |
| DSP WORLD MINING | 2.9% | 11.2% | Fund of Funds |
| HSBC ASIA PACIFIC | 2.8% | 11.6% | Fund of Funds |
Source – Kuvera.in
Top 5 worst performing funds
| Name | Week | 3Y | Category |
| BOI AXA CREDIT RISK | -18.5% | -3.2% | Credit Risk Fund |
| INVESCO INDIA CREDIT | -4.2% | 3.6% | Credit Risk Fund |
| BOI AXA ST INCOME | -4.0% | 6.4% | Short Duration Fund |
| BOI AXA HYBRID | -3.7% | 4.9% | Conservative Hybrid |
| BOI AXA EQUITY DEBT | -3.0% | 5.4% | Balanced Advantage |
Source – Kuvera.in
Top 5 best performing ELSS funds
| Name | Week | 3Y | Category |
| HDFC TAX SAVER | -0.1% | 13.4% | ELSS |
| KOTAK TAX SAVER | -0.1% | 16.2% | ELSS |
| TATA INDIA TAX SAVING | -0.1% | 16.2% | ELSS |
| LIC MF TAX | -0.1% | 14.3% | ELSS |
| MOTILAL OSWAL LTE | -0.1% | 17.2% | ELSS |
Source – Kuvera.in
What investors bought
We saw the most inflows in these 5 Funds –
| Name | 1Y | 3Y | Category |
| MIRAE EMER BLUECHIP | 11.3% | 19.6% | Large & Mid Cap |
| MIRAE LARGE CAP | 11.6% | 17.5% | Large Cap |
| UTI NIFTY INDEX | 11.0% | 14.8% | Index |
| KOTAK STD MULTICAP | 10.4% | 17.1% | Multi Cap |
| HDFC SMALL CAP | -5.6% | 18.1% | Small Cap |
Source – Kuvera.in
What investors sold
We saw the most outflows in these 5 Funds –
| Name | 1Y | 3Y | Category |
| HDFC HYBRID EQUITY | 7.7% | 11.5% | Aggressive Hybrid |
| SBI BLUE CHIP | 6.0% | 12.1% | Large Cap |
| FRANKLIN SMALLER COM | -8.1% | 9.7% | Small Cap |
| HDFC BALANCE ADV | 11.6% | 16.4% | Balanced Advantage |
| SBI SMALL CAP | -3.3% | 17.5% | Small Cap |
Source – Kuvera.in
Movers & Shakers
1/SBI Mutual Fund has announced that Binod Kumar Mishra has ceased to be the Chief Operating Officer and Key Personnel of SBI Funds Management Private Limited. Naveen Kumar Jha has been appointed in his stead.
2/ DHFL Pramerica Mutual Fund has announced that Rakesh Suri – Fund Manager – Fixed Income has ceased to be the Fund Manager and Key Personnel of DHFL Pramerica Asset Management Private Limited, with effect from 07 June 2019.
Quote of the week:
A fit body, a calm mind, a house full of love. These things cannot be bought – they must be earned.
: Naval Ravikant
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