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Did You Own The Best Funds Of Q1?

Author: Kumar Shankar Roy/Wednesday, July 8, 2020/Categories: Exclusive

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Did You Own The Best Funds Of Q1?

The April to June period of 2020 marked a time of recovery for the markets, which were seriously impacted in March. Even though the coronavirus outbreak is far from getting controlled, the markets started marching ahead and have now gained quite a bit of lost steam. Mutual funds (MFs) are a popular investment route for all types of investors. In step with markets, funds regained Net Asset Value (NAV) and delivered wealth to investors, who were patient and had chosen to repose their faith. Let us see how equity, debt, hybrid, and gold funds performed in April to June 2020 time period.

Equity funds

Gold equity funds, pharma funds, smallcap funds, US funds, and thematic funds were the top gainers in April to June period. The top-10 performers in the equity fund space were DSP World Gold Fund with 51.86 per cent gain, ICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund with 37.11 per cent rise, Edelweiss US Technology Equity Fund of Fund 36.88 per cent uptick, DSP World Mining Fund with 35.48 per cent gain, ICICI Prudential Commodities Fund 35.31 per cent jump, Quant Small Cap Fund with 35.20 per cent boost, UTI Transportation and Logistics Fund with 34.37 per cent spurt, PGIM India Global Equity Opportunities Fund with 34.26 per cent uptick, Franklin India Feeder Franklin US Opportunities Fund with 32.41 per cent advance and Mirae Asset Healthcare Fund with 32.16 per cent jump.

As many as 150 equity schemes clocked a minimum 20 per cent return, as the market rallied from lows in March. Even though economic recovery chances in FY21 are shallow, markets hoped that the growth rebound in FY22 would be meaningfully strong. As many 290 equity funds gave between 10.00-19.99% return between April 1 and June 30.

The laggards in the equity fund mart were mainly PSU funds, The worst performers were SBI PSU Fund up 9.56 per cent, CPSE Exchange Traded Fund up 9.44 per cent, JM Large Cap Fund up 9.09 per cent, Aditya Birla Sun Life Global Real Estate Fund - Retail Plan up 8.67 per cent, Baroda Banking and Financial Services Fund up 7.97 per cent, Kotak PSU Bank ETF up 7.58 per cent, Nippon India ETF PSU Bank BeES up 7.58 per cent and Nippon India ETF Hang Seng BeES up 4.15 per cent.

There was no equity fund that logged a negative return in this period.

Debt funds

Gilt funds (which invest in government securities) were the best debt fund performers in Q1 of the new financial year. Some dynamic bond funds also chipped in. The top-10 debt fund performers in April to June period were ICICI Prudential Gilt Fund (up 5.44%), IDFC Government Securities Fund - Investment Plan (up 5.40%), ICICI Prudential Constant Maturity Gilt Fund (up 5.33%), Aditya Birla Sun Life Government Securities Fund (up 5.27%), UTI Dynamic Bond Fund (up 5.16%), IDFC Dynamic Bond Fund (up 5.16%), IDFC Government Securities Fund - Constant Maturity Plan (up 5.15%), UTI Gilt Fund (up 5.15%), DSP 10Y G-Sec Fund (up 5.07%) and UTI Bond Fund (up 5.05%).

Nearly 50 schemes generated returns between four per cent and 4.99%. About 70 schemes clocked between three per cent and 3.99 per cent in the same period. Debt funds, of course, lack the punch delivered by equity schemes. However, debt funds are for capital protection and are expected to deliver higher than bank returns.

As many 18 debt schemes delivered negative returns in April to June 2020 period. The biggest laggards were Baroda Credit Risk Fund - Plan A down 3.51 per cent, Principal Low Duration Fund down 3.97 per cent, L&T Credit Risk Fund down 4.42 per cent, Principal Credit Risk Fund down 5.29 per cent, Baroda Treasury Advantage Fund down 5.81 per cent, HSBC Short Duration Fund down 6.81 per cent, HSBC Low Duration Fund down 7.31 per cent, BOI AXA Short Term Income Fund down 7.63 per cent and BOI AXA Credit Risk Fund down 50.93 per cent.

Hybrid funds

In the hybrid fund space, where schemes invest in both equity and debt as per mandate, the top performers during April -June 2020 were ICICI Prudential Thematic Advantage Fund (FOF) up 27.09 per cent, Tata Young Citizens Fund up 20.35 per cent, Quant Absolute Fund up 20.02 per cent, ICICI Prudential Multi Asset Fund up 19.38 per cent, Kotak Asset Allocator Fund up 18.53 per cent, Essel 3 in 1 Fund up 17.75 per cent, UTI Hybrid Equity Fund up 17.72 per cent, HDFC Multi Asset Fund up 17.46 per cent, Kotak Balanced Advantage Fund up 16.83 per cent and ICICI Prudential Asset Allocator (FOF) Fund up 16.81 per cent.

About 87 hybrid schemes generated over 10 per cent return in April-June 2020 period, thanks to the rebound in equity component. About 52 schemes clocked between five per cent and 9.99 per cent in the same period.

As many as six schemes, however, clocked negative returns in the hybrid fund space. These include the biggest laggards; they are Essel Arbitrage Fund down 0.20 per cent, Franklin India Life Stage Fund of Funds 30s down 2.34 per cent, Franklin India Dynamic Asset Allocation Fund of Funds down 3.66 per cent, Franklin India Life Stage Fund of Funds 40s down 10.73 per cent, Franklin India Multi Asset Solution Fund down 15.89 per cent and Franklin India Life Stage Fund of Funds 50s Plus down 21.03 per cent. The overwhelming presence of Franklin schemes is due to the investor redemption linked to concerns about the fund house’s schemes after it abruptly decided to shut down 6 long-running debt funds.

Gold funds

Gold has been the safe asset for the last 12 months. As financial markets suffered, it is gold that shone all the way through. In April to June 2020 period, gold funds again delivered nice gains.

The best performers were Invesco India Gold Fund up 11.91 per cent, Nippon India Gold Savings Fund up 11.41 per cent, ICICI Prudential Regular Gold Savings Fund (FOF) up 11.17 per cent, Kotak Gold Fund up 10.57 per cent and HDFC Gold Fund up 10.47 per cent.

Over 90 per cent of gold funds delivered more than 10 per cent return in Q1. In this, the laggards were IDBI Gold Fund up 9.7 per cent, Quantum Gold Savings up 9.38 per cent and SBI Gold Fund up 7.65 per cent.

The writer is a journalist with 14 years of experience

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