Market-Beating Equity Mutual Fund Classes!















Markets are still a long way from regaining lost ground. However, there are categories of equity mutual funds that have beaten the markets. Keep reading to learn more.





Nifty 50 broke through crucial resistance levels at 16,200-16,400 at the start of the week. Also, it broke through the extended neckline of the head and shoulders chart pattern from below, but failed to break through its 50-day exponential moving average (EMA). The Nifty 50 futures saw a bearish crossover of the 50-day EMA and the 200-day EMA on May 23, 2022. This is a bearish indicator known as a death cross.



At present, the Nifty 50 continues to struggle to trade convincingly above the aforementioned elongated neckline, as well as facing rejection between the 16,600 and 16,650 levels. As a result, to continue towards the north, he must cross this level, which will attract strong opposition at 17,000 levels. On the other hand, the closest support is between 16,200 and 16,400. Also, for the bulls to take the lead, the price must break above its 50-day EMA and its 200-day EMA.



However, the market (Nifty 500) and equity mutual funds have been crashing since October 19, 2021. The Nifty 500 Total Return Index (TRI) has fallen more than 10%.




























Category

Return (%) *

Theme – PSU

-4.21

Sector – Infrastructure

-6.10

small cap

-7.47

Theme – Consumption

-8.13

Theme – MNC

-9.24

Dividend yield

-9.64

Multicap

-9.65

Thematic

-9.92

Value/Cons

-9.99

Energy

-10.21

Average capitalization

-10.54

ELSS

-10.54

Flexi Cap

-10.87

Large Cap

-11.00

Large and mid caps

-11.29

Sector – Bank

-12.43

Thematic – ESG

-13.56

International

-13.72

Sectoral – Pharmaceutical

-13.54

Sector – IT

-18.59

Clever 500 TRI

-9.95

* Median returns for the period from October 19, 2021 to June 1, 2022.



Equity mutual fund categories such as Thematic – PSU, Sectoral – Infrastructure, Small-Cap, Thematic – Consumption, Thematic – MNC, Dividend Yield and Multi-Cap outperformed the Nifty 500 TRI as shown in the chart below above, while Sectoral – Banking, Thematic – ESG, International, Sectoral – Pharmaceuticals and Sectoral – IT underperformed the benchmark.



However, this does not mean that they will continue to dominate. As the markets work in cycles, the winners change. Therefore, it is essential to carry out due diligence before investing. In addition, the implementation of a solid asset allocation strategy is essential. With respect to equity funds, we believe that a long-term investment in flexible funds produces better risk-adjusted returns and would match most investors’ risk tolerance.
































Dolores W. Simon