[Weekly Update] Equity MFs Continue the Winning Streak; Debt Fund Recovers!
If you are not updated, you are outdated.
-Anonymous
This quote goes 100% right with the mutual fund market. You just can’t wake up one day and diversify your assets following the concept of ‘Eeny, Menny, Miny, Moe’ while keeping your hope for scoring good returns alive. Undoubtedly, market fluctuation happens as frequently as you blink your eye, but the overall trend is what a good investor should look forward to. Moreover, the market performance in the month of July is an indicator that the Indian mutual fund market has some big surprises in stock for you.
Table Of Content
- Mutual Fund Market Performance in July 2021
- Latest News & Updates from Mutual Fund Market
- Experts’ Suggestions
Hello, investors! Welcome to the blog, which shares all the latest news, trends, and performance reports of the mutual fund market. Let’s begin!
Mutual Fund Market Performance in July 2021
Equity Mutual Funds
Equity MFs continued the winning streak and came out as the best performer, with small-cap mutual funds surpassing all. All thanks to the exceptional earning results of top IT giants like Infosys, Mindtree, and TCS, the sectoral IT funds are on a bull run. And, that’s not all! The infrastructure and banking sector funds have also shown positive returns. Here is a complete analysis of the performance:
| Equity | 1W% | Year to Date% |
| Large Cap | 1.41 | 16.07 |
| Flexi Cap | 1.76 | 20.45 |
| Mid Cap | 1.99 | 32.21 |
| Small Cap | 3.33 | 46.76 |
| ELSS | 1.93 | 21.37 |
| Sectoral-Banking | 1.94 | 16.62 |
| Sectoral-Infrastructure | 2.38 | 37.01 |
| Sectoral-Pharma | 1.6 | 19.26 |
| Sectoral-Technology | 2.98 | 29.4 |
| Thematic-Consumption | 1 | 24.54 |
| Thematic-Energy | 1.89 | 39.89 |
| Thematic-PSU | 0.44 | 29.69 |
| International | 0.88 | 12.12 |
*as on 18th July, 2021
Debt Mutual Funds
Investors took a sigh of relief this week as debt mutual funds started showing signs of recovery. The medium-duration bonds, corporate bonds, and credit risk funds gave marginally high returns. The government relaunched the bond purchase program, which proved as a motivating factor behind the gains. And, if the demand continues to increase, then debt funds might show some more recovery. Check out the complete analysis here:
| Debt | 1W% | YTD% |
| Long Duration | -0.03 | 0.69 |
| Medium Duration | 0.25 | 2.66 |
| Short Duration | 0.2 | 1.65 |
| Low Duration | 0.13 | 1.98 |
| Ultra Short Duration | 0.08 | 1.89 |
| Liquid | 0.06 | 1.69 |
| Corporate Bond | 0.22 | 1.71 |
| Credit Risk | 0.2 | 4.02 |
| Gilt | 0.1 | 0.37 |
*as on 18th July, 2021
Gold Investment
Not much improvement was witnessed in Gold investment. The coming weeks will clear the picture more.
| Investment | 1W | YTD |
| Gold | 0.9 | -4.06 |
*as on 18th July, 2021
So, this was the market performance in the previous week of July. Now, let’s talk about the latest news which turned the heads in the D-street.
Latest News & Updates from Mutual Fund Market
Economic News
- Slow economic growth of China in the last 3 months will bring positive news for US and India.
- Inflation continues to spike, and it raised to 6.26% in June, which is far ahead of the RBI target. The RBI believes that the hike is traditional and due to a rise in prices of food and fuel, as the supply chain got hampered in lockdown. If inflation doesn’t meet the target, then the interest rate can increase.
- The weak position of the Indian Rupee against the dollar is good news for exports and bad news for imports.Resultant, the current account deficit is increasing, which will prove to be a monsoon shower for the corporate market and share market.
- The Indian export is up, but the rise in fuel prices will skyrocket the import cost. As a result, the trade deficit was seen in June month.
Overall, there is a tug of war happening between economic growth and inflation, yet the market sentiments are normal so far. However, if the consumer demand growth increases, then the tables can turn.
Political & Social News
- The low number of fully-vaccinated population, i.e., 5% in India has doubled the chances of the third wave coming.
- The delayed monsoon will put farmers under stress, which will ultimately damage the rural economy, and food inflation will increase.
- As per the SBI credit card report, as soon as the fuel price touched 100, people have limited their expenditure on non-essential items. If this continues, then the economic growth on the consumer side will suffer.
- The expansion of the cabinet by the Indian government has ignited a fire in the political streets.
In short, the sentiments look negative, and we might see big bumps ahead.
Technical News
- The first-quarter returns from the IT companies look promising. In fact, companies like TATA Elxsi, Mindtree, Wipro, Infosys have shown good revenue growth (30%), resulting in stocks rally.
- As per the corporate survey of CII, 60% of CEOs believe that the sales recovery rate after the second wave is better than the first COVID wave.
- With Zomato and Paytm leading the game, it is the season of IPO. It will be very early to decide the future growth, as many such IPO’s fail to live upto the expectations in the USA market.
- FIIs continue to be the sellers, whereas DIIs emerged as the buyers.
- Due to high bond supply, the yield is increasing in the bond market. But the good news is that retail investors can soon be allowed to purchase bonds from the government bond auction directly.
Summing up, the sentiments are positive, provided we discard news from the bond market.
So, these were the latest mutual fund news. Now, let us highlight some suggestions from the experts to the investors.
Experts’ Suggestions
- Investors can expect corrections in the equity mutual fund market due to high valuations and fear of inflation.
- IT and Multicap or Flexible funds can be picked in search of high returns.
- In debt investment, low duration and short duration funds are a good pick.
So, this was the complete market analysis of July so far. The information has been collected by the experts of MySIPonline after examining the market movements critically. For more information regarding the Indian mutual fund market, contact: 9660032889.