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Value and momentum mutual funds continue to perform consistently: Report
Value and momentum mutual funds continue to perform consistently: Report

Time of India

time8 hours ago

  • Business
  • Time of India

Value and momentum mutual funds continue to perform consistently: Report

In mutual fund categories such as largecap, midcap, ELSS, contra/value, large & midcap, and aggressive hybrid, funds favouring value investment style have emerged as consistent performers, while in smallcap and flexicap categories, funds high on momentum style were among the top performers, according to CRISP Mutual Funds Scorecard (second edition). Additionally, the report highlights that a few funds with 'High' performance consistency have been outliers in terms of risk. Individual Investors tend to emphasize performance or point-to-point returns of a fund, thereby creating a portfolio with high-risk concentration. Also Read | Jio Financial Services & Reliance Industries among stocks bought and sold by PPFAS Mutual Fund in July Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Indonesia: New Container Houses (Prices May Surprise You) Container House | Search ads Search Now Undo The scorecard revealed that among funds with 'High' performance consistency in categories such as Flexi Cap, ELSS, Focused and Aggressive Hybrid Funds, 25-30% of the funds were scored 'Too High' on Risk. Therefore, it becomes imperative for investors to consider risk as a factor along with performance consistency to build a resilient portfolio. Many investors believe holding funds across multiple categories and AMCs provides diversification. However, a single style exposure could also lead to significant portfolio underperformance. The report highlighted three important things. Firstly, around 40% of the total AuM of funds analysed are concentrated in funds that are 'High' on the Value investment style. Live Events Secondly, momentum, the second most dominant investment style among funds showing high performance consistency, commands only 14% of AuM. And lastly, approximately 28% of the assets are in funds that do not follow any particular investment style, and 22% are in funds that focus on buying high-quality companies. A smart combination of styles can help reduce volatility and ensure relatively smoother returns over time. To avoid style concentrations, the CRISP framework plays a crucial role in helping investors recognize and assess the underlying style exposures in their portfolios, the report said. The CRISP Scorecard identified the top AMCs by performance consistency, as Nippon India, HDFC, and ICICI Prudential were among the most consistent performers across multiple fund categories. Quant AMC showcased high-performance consistency across seven categories, though its funds showed significantly higher volatility, and HDFC AMC funds largely followed value style, while Nippon and ICICI Prudential had a mix of Value tilt and style-neutral funds. Lastly, Edelweiss with a strong Momentum tilt, and Franklin Templeton with a preference for Value style, delivered high performance consistency across five categories each. Also Read | Baroda BNP Paribas Aggressive Hybrid Fund turns Rs 10,000 SIP to nearly Rs 18 lakh in 8 years The scorecard covers analysis of funds in core equity and hybrid fund categories, based on the 5-year data ending June 2025. It leverages in-house fund evaluation framework, CRISP, to provide a comprehensive, data-driven analysis of mutual funds, offering insights on their performance, risk, and investment style. 'With the growing adoption of mutual funds, there is a clear need for simple yet relevant insights that go beyond past returns. At we developed the CRISP (Consistency, Risk and Investment Style of Portfolio) framework to offer investors a more holistic view that brings together performance, relative risk, and investment style,' said Nilesh D Naik, Head of Investment Products, (PhonePe Wealth). 'The CRISP Mutual Funds Scorecard is our way of empowering millions of investors with deeper, actionable insights on how their money is being managed. This second edition builds on that promise, and commitment guided by investor needs and driven by our belief in making data-backed investing more accessible for all,' Naik added.

Indian markets at a crossroads: Banking loses steam, IT and metals eye a comeback
Indian markets at a crossroads: Banking loses steam, IT and metals eye a comeback

Mint

time20-05-2025

  • Business
  • Mint

Indian markets at a crossroads: Banking loses steam, IT and metals eye a comeback

India's equity market is undergoing a subtle but critical sectoral shift as the latest Relative Rotation Graphs (RRG) from reveal evolving momentum patterns among key industries. While the banking sector continues to lead, its waning strength suggests the tide may be turning in favor of sectors like IT and metals. According to weekly Sector Rotation Report, which analyses sectoral movements relative to the Nifty 50 benchmark over a six-week period from April 4 to May 16, several sectors are showing signs of transition. Banking, private banking, and financial services indices have remained in the leading quadrant, outperforming the broader market with strong relative strength and momentum. However, recent trends show a decline in both, signaling that this leadership may not last much longer. Analysts suggest that while fundamentals remain solid, valuations and macro headwinds could be prompting investors to rotate out of these heavyweights. The IT sector, which had been underperforming, is now showing renewed strength. Rising momentum and improving relative performance indicate growing investor confidence, possibly driven by global tech demand and cost optimization initiatives. Metal stocks, while still in the lagging quadrant, have shown a modest improvement in momentum. While early, this may signal the beginning of a bottoming-out phase, especially if global commodity cycles turn supportive. The auto sector remains in the lagging zone but is witnessing a gradual pickup in momentum. Analysts interpret this as early signs of a cyclical rebound, though visibility remains low. In contrast, the pharma sector has slipped deeper into underperformance, moving from weakening to lagging with falling momentum and strength—indicating structural pressures may persist. Once seen as safe havens, FMCG and healthcare sectors have also drifted into the lagging quadrant. notes that these sectors have failed to sustain prior momentum, likely reflecting stretched valuations and tepid earnings growth. As of mid-May, the sectoral rotation paints a picture of a market in transition. 'Investors should watch out for emerging leadership from beaten-down sectors showing signs of revival. The IT and metal sectors deserve close attention, especially if momentum sustains,' the report said. The Relative Rotation Graph (RRG) framework used in the analysis is particularly helpful in identifying turning points, enabling investors to shift focus ahead of major sector rallies. Experts suggest that success in the current environment will depend on adaptability and timely sector rotation. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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