Category: Your Money

Mutual Fund Top 10 Lists

shyam October 18, 2015

Top 10 funds over the years

Based on our RS-Spead metric, we ranked mutual funds based on their relative outperformance vs. CNX 500 over a one year period. See if you can find a pattern here.

Best Fund 2010
Religare Invesco MID N SMALL CAP Fund – Growth Option
Birla Sun Life MNC Fund-Plan B (Growth)
HDFC MID-CAP OPPORTUNITIES FUND – Growth Option
Reliance Equity Opportunities Fund-Growth Plan-Growth Option
Axis Long Term Equity Fund – Growth
DSP BlackRock Small and Mid Cap Fund – Regular Plan – Growth
HDFC Equity Fund – Growth Option
Birla Sun Life India Gennext Fund-Growth Option
HDFC Capital Builder Fund – Growth Option
HDFC Long Term Advantage Fund – Growth Option

Best Fund 2011
UTI Opportunities Fund-Growth Option
Canara Robeco Large Cap+ Fund – Regular Plan – Growth
Birla Sun Life MNC Fund-Plan B (Growth)*
UTI India Lifestyle Fund – Growth Option
Birla Sun Life India Gennext Fund-Growth Option*
Axis Long Term Equity Fund – Growth*
Mirae Asset Emerging Bluechip Fund – Regular Plan – Growth Option
BNP PARIBAS Tax Advantage Plan (ELSS)-Growth Option
Franklin India Taxshield-Growth
Canara Robeco Equity Diversified – Regular Plan – Growth

Best Fund 2012
Principal Emerging Bluechip Fund – Growth Option
Axis Midcap Fund – Growth
BNP Paribas Mid Cap Fund-Growth Option
Franklin India Smaller Companies Fund-Growth
Kotak-Mid-Cap-Growth
Taurus Discovery Fund – Growth Option
Canara Robeco Emerging Equities – Regular Plan – GROWTH
Kotak Emerging Equity Scheme – Growth
HSBC Progressive Themes Fund – Growth
HSBC Midcap Equity Fund – Growth

Best Fund 2014
SBI Smal & Midcap – Regular Plan – Growth
Sundaram S.M.I.L.E.Fund-Growth
DSP BlackRock Micro Cap Fund – Regular – Growth
Birla Sun Life Pure Value Fund – Growth Option
Reliance Small Cap Fund – Growth Plan – Growth Option
Canara Robeco Emerging Equities – Regular Plan – GROWTH*
Franklin Build India Fund Growth Plan
Franklin India Smaller Companies Fund-Growth*
Kotak Emerging Equity Scheme – Growth*
ICICI Prudential MidCap Fund – Regular Plan – Growth

Best Fund 2015
Birla Sun Life MNC Fund – Growth – Regular Plan
MOSt Focused Midcap 30-Regular Plan-Growth Option
SBI Smal & Midcap – Regular Plan – Growth*
DSP BlackRock Micro Cap Fund – Regular – Growth*
MOSt Focused Multicap 35-Regular Plan-Growth Option
JPMorgan India Mid and Small Cap Fund – Regular Plan – Growth Option
Canara Robeco Emerging Equities – Regular Plan – GROWTH*
L&T India Value Fund-Growth Option
Sundaram Select Midcap-Growth
BNP Paribas Mid Cap Fund-Growth Option

*We have stared the fund that made it to the top-10 list the previous year.

Thoughts

There is no unqualified “best” fund out there. Among the top 5 fund houses (HDFC, ICICI Pru, Birla Sun Life, Reliance and UTI,) all funds within a class (large-cap, mid-cap, Top-100, etc…) will eventually put in roughly the same performance numbers. They will all revert to mean. Investors are probably better served with a negative list of funds and fund houses to avoid than a list of the “best” funds.

Categories Investing Insight, Your Money Tags mutual funds

Weekly Recap: When Evidence Fails

shyam October 17, 2015October 17, 2015

Equities

Major
DAX(DEU)	+0.08%
CAC(FRA)	+0.03%
UKX(GBR)	-0.59%
NKY(JPN)	-0.80%
SPX(USA)	+1.14%

MINTs
JCI(IDN)	-1.47%
INMEX(MEX)	+0.07%
NGSEINDX(NGA)	-1.10%
XU030(TUR)	-1.05%

BRICS
IBOV(BRA)	-3.27%
SHCOMP(CHN)	+6.54%
NIFTY(IND)	+0.59%
INDEXCF(RUS)	-0.66%
TOP40(ZAF)	-0.73%

Commodities

Energy
Brent Crude Oil	-4.00%
Ethanol	-0.20%
Natural Gas	-3.08%
RBOB Gasoline	-6.00%
WTI Crude Oil	-4.35%
Heating Oil	-5.54%

Metals
Copper	-0.41%
Palladium	-1.68%
Gold 100oz	+1.96%
Platinum	+3.61%
Silver 5000oz	+2.53%

Currencies

USDEUR:+0.18% USDJPY:-0.69%

MINTs
USDIDR(IDN)	+0.95%
USDMXN(MEX)	-0.17%
USDNGN(NGA)	-0.05%
USDTRY(TUR)	-0.71%

BRICS
USDBRL(BRA)	+5.00%
USDCNY(CHN)	+0.14%
USDINR(IND)	+0.12%
USDRUB(RUS)	-0.53%
USDZAR(ZAF)	-1.93%

Agricultural
Cotton	+3.23%
Feeder Cattle	+2.54%
Lean Hogs	-11.45%
Wheat	-2.75%
Orange Juice	+18.33%
Soybeans	+1.64%
Cocoa	+1.34%
Coffee (Arabica)	-4.16%
Coffee (Robusta)	-0.49%
Corn	-1.24%
Soybean Meal	+1.76%
Sugar #11	+0.70%
Cattle	+4.10%
Lumber	+5.94%
White Sugar	+0.05%

Credit Indices

Index	Change
Markit CDX NA HY	-0.72%
Markit CDX NA IG	+3.83%
Markit iTraxx Asia ex-Japan IG	-4.14%
Markit iTraxx Australia	-2.90%
Markit iTraxx Europe	-1.84%
Markit iTraxx Europe Crossover	+4.46%
Markit iTraxx Japan	-0.38%
Markit iTraxx SovX Western Europe	+0.27%
Markit LCDX (Loan CDS)	+0.00%
Markit MCDX (Municipal CDS)	+0.56%

Risk ON like Donkey Kong this week. All that money that fled EMs fearing a Fed rate hike is finding its way back…

Global ETFs (USD)

Nifty Heatmap

Index Returns

For a deeper dive into indices, check out our weekly Index Update.

Market Cap Decile Performance

Decile	Mkt. Cap.	Adv/Decl
1 (micro)	+1.34%	76/59
2	+3.26%	81/53
3	+3.42%	72/62
4	+3.84%	73/62
5	+2.85%	75/59
6	+2.42%	76/58
7	+2.29%	72/63
8	+2.89%	73/61
9	+0.95%	73/61
10 (mega)	+0.47%	75/60

Midcaps outperformed large caps…

Top Winners and Losers

RCOM	+8.23%
TATAMOTORS	+8.35%
NMDC	+9.10%
INFY	-6.21%
TCS	-5.93%
CONCOR	-5.79%

IT guys got hit buy a bus…

ETF Performance

INFRABEES	+3.03%
BANKBEES	+1.98%
PSUBNKBEES	+1.66%
GOLDBEES	+1.50%
NIFTYBEES	+0.67%
JUNIORBEES	+0.55%
CPSEETF	+0.32%

Green zoned…

Yield Curve

Bond Indices

Sub Index	Change in YTM	Total Return(%)
0 5	-0.01	+0.16%
5 10	+0.02	+0.05%
10 15	+0.03	-0.04%
15 20	+0.00	+0.13%
20 30	-0.03	+0.41%

The curve remained unchanged…

Investment Theme Performance

ADAG stocks	+6.64%
The RBI Restricted List	+6.35%
High Beta	+4.09%
Magic Formula	+3.83%
PPFAS Long Term Value	+3.49%
Quality to Price	+3.15%
Financial Strength Value	+1.48%
Momentum	+1.38%
Velocity	+0.87%
Tactical CNX 100	+0.06%
Balance Sheet Strength	-0.30%
Next Trillion	-0.42%
ASK Life	-0.52%
Enterprise Yield	-0.71%
Low Volatility	-1.50%

High beta took off like a rocket…

Equity Mutual Funds

Best
Mirae Asset China Advantage Fund – Regular Plan Growth Option	+3.81%
JM Core 11 Fund – Growth option	+3.08%
Religare Invesco PSU Equity Fund – Growth	+2.83%
JM Basic Fund – Growth Option	+2.45%
DSP BlackRock Small and Mid Cap Fund – Regular Plan – Growth	+2.24%
Mirae Asset Emerging Bluechip Fund – Regular Plan – Growth Option	+2.13%
HDFC INFRASTRUCTURE FUND-GROWTH OPTION	+2.10%

Worst
Birla Sun Life India Opportunities Fund – Growth – Regular Plan	-0.58%
Birla Sun Life Commodity Equities Fund – Global Agri Plan – Growth – Regular Plan	-0.59%
L&T Global Real Assets Fund-Growth Option	-0.67%
Taurus Ethical Fund – Growth Option	-0.79%
LIC NOMURA MF Taxplan-Growth	-0.80%
Axis Midcap Fund – Growth	-0.96%
Franklin India Feeder – Franklin European Growth Fund – Growth	-1.76%

Bond Mutual Funds

Best
Escorts Income Plan-Growth	+0.43%
L&T Resurgent India Corporate Bond Fund – Growth Option	+0.34%
Baroda Pioneer Credit Opportunities Fund -Plan B-Growth Option	+0.33%
Baroda Pioneer Credit Opportunities Fund -Plan A -Growth Option	+0.31%
Birla Sun Life Corporate Bond Fund – Regular Plan – Growth	+0.28%
Sundaram Flexible Fund -Flexible Income Plan Regular – Growth	+0.27%
DWS Medium Term Income Fund- Regular Plan- Growth	+0.24%

Worst
JM G-Sec Fund – Growth Option	-0.09%
BNP Paribas Government Securities Fund – Growth	-0.09%
DSP BlackRock Government Securities Fund – Regular Plan – Growth	-0.10%
Canara Robeco Gilt PGS – Regular Plan – Growth	-0.11%
UTI – GILT ADVANTAGE-LONG TERM-GROWTH	-0.12%
DSP BlackRock Constant Maturity 10Y G-Sec Fund – Regular Plan – Growth	-0.14%
IDBI Gilt Fund Growth	-0.18%

Thought for the weekend

The investing cycle of good ideas goes something like this:

Early adopters find an anomaly and exploit it for huge gains. More and more smart money begins to figure out this apparent loophole and competition means lower profits to go around. Next come the academics with their research papers that get published in the trade journals and such. Finally, Wall Street picks up on the trend and does their part to create more products than are needed to help everyone else finally jump in on the fad, usually just as the cycle is about to turn.

Source: When Evidence Fails

Categories Your Money Tags weekly

Mutual Fund Alpha Charts

shyam October 17, 2015

Charting Alpha

Most mutual fund investors chase recent performance. However, experience shows that alpha, or out-performance, is rarely sustained in the fund universe. To visualize how alpha fluctuates across different time-periods, we extended the relative strength spread notion of stocks to mutual funds. By normalizing performance across multiple funds vs. a single benchmark, the CNX 500 index, we can get a sense for how stable the alpha is.

Exhibits

Have a look at the RS-Spread chart of the HDFC Growth Fund:

Notice how 1-year alpha was below zero between Oct’2012 and May’2014 and is now back below zero again. This should indicate that whatever strategy the fund is employing is not that great in generating sustainable alpha. Now compare that to the Birla Sun Life Frontline Equity Fund:

Notice how the fund has managed to outperform over the last 5-years. Here’s the MNC fund’s RS-Spread chart:

The FundCompare Tool

We update these charts daily for more than 100 funds. You can access them through our FundCompare tool. If you have any questions, give us a call or Whatsapp us!

Categories Investing Insight, Your Money Tags mutual funds, quant

Index Update 17.10.2015

stockviz October 17, 2015October 17, 2015

MOMENTUM

We run our proprietary momentum scoring algorithm on indices just like we do on stocks. You can use the momentum scores of sub-indices to get a sense for which sectors have the wind on their backs and those that are facing headwinds.

Traders can pick their longs in sectors with high short-term momentum and their shorts in sectors with low momentum. Investors can use the longer lookback scores to position themselves using our re-factored index Themes.

You can see how the momentum algorithm has performed on individual stocks here.

Here are the best and the worst sub-indices:

Relative Strength Spread

Refactored Index Performance

50-day performance, from August 05, 2015 through October 16, 2015:

Equally Weighted		Market Cap. Weighted
CNX PHARMA (EQUAL)	+2.75%	CNX PHARMA (CAP)	+5.01%
CNX REALTY (EQUAL)	+1.57%	CNX REALTY (CAP)	+0.57%
CNX IT (EQUAL)	-2.27%	NI15 (CAP)	-0.58%
CNX ENERGY (EQUAL)	-2.77%	CNX MEDIA (CAP)	-0.81%
NI15 (EQUAL)	-2.84%	NSE QUALITY 30 (CAP)	-1.25%
NSE QUALITY 30 (EQUAL)	-3.24%	CNX IT (CAP)	-1.61%
CNX MEDIA (EQUAL)	-3.27%	CNX FMCG (CAP)	-3.15%
CNX INFRA (EQUAL)	-3.74%	CNX CONSUMPTION (CAP)	-3.58%
CNX SERVICE (EQUAL)	-4.38%	CNX SERVICE (CAP)	-3.76%
CNX FINANCE (EQUAL)	-4.92%	CNX FINANCE (CAP)	-4.16%
LIX15 Midcap (EQUAL)	-5.00%	LIX15 Midcap (CAP)	-5.06%
CNX CONSUMPTION (EQUAL)	-5.13%	CNX ENERGY (CAP)	-5.38%
CNX COMMODITIES (EQUAL)	-5.94%	CNX BANK (CAP)	-5.47%
LIX 15 (EQUAL)	-6.50%	CNX AUTO (CAP)	-5.94%
NV20 (EQUAL)	-6.72%	NV20 (CAP)	-6.15%
CNX BANK (EQUAL)	-6.74%	CNX COMMODITIES (CAP)	-7.72%
CNX PSE (EQUAL)	-7.40%	LIX 15 (CAP)	-7.98%
CNX AUTO (EQUAL)	-7.49%	CNX MNC (CAP)	-8.60%
CPSE INDEX (EQUAL)	-8.32%	CNX INFRA (CAP)	-9.06%
CNX PSU BANK (EQUAL)	-8.45%	CNX PSE (CAP)	-9.41%
CNX MNC (EQUAL)	-8.57%	CNX PSU BANK (CAP)	-9.89%
CNX FMCG (EQUAL)	-8.98%	CPSE INDEX (CAP)	-10.29%
CNX METAL (EQUAL)	-10.22%	CNX METAL (CAP)	-13.97%

Trend Model Summary

Index	Signal	% From Peak	Day of Peak
CNX AUTO	LONG	9.15	2015-Jan-27
CNX BANK	SHORT	12.86	2015-Jan-27
CNX COMMODITIES	LONG	34.08	2008-Jan-04
CNX CONSUMPTION	SHORT	5.14	2015-Aug-05
CNX ENERGY	LONG	32.46	2008-Jan-14
CNX FMCG	SHORT	8.34	2015-Feb-25
CNX INFRA	LONG	51.93	2008-Jan-09
CNX IT	LONG	88.13	2000-Feb-21
CNX MEDIA	LONG	15.16	2008-Jan-04
CNX METAL	LONG	65.79	2008-Jan-04
CNX MNC	SHORT	9.23	2015-Aug-10
CNX NIFTY	SHORT	8.43	2015-Mar-03
CNX PHARMA	SHORT	4.54	2015-Apr-08
CNX PSE	LONG	32.11	2008-Jan-04
CNX PSU BANK	SHORT	39.36	2010-Nov-05
CNX REALTY	SHORT	90.28	2008-Jan-14
CNX SERVICE	SHORT	9.35	2015-Mar-03

A retracement is underway for most indices. CNX 100 broke about its 50-day SMA, activating the Tactical CNX 100 Theme. With most companies yet to announce their results, curb your enthusiasm.

Categories Your Money Tags index, momentum, weekly