9 mins read . 02 Aug 2023
The Nifty overall gained 2.94% in the month of July 2023 taking the Nifty tantalizingly close to the 20,000 mark but struggling to breach. However, considering that the VIX (volatility index) of the NSE is still very low at around 10.20, the chances of a Nifty rally appear to be quite strong. However, what is true about July 2023 is that the FPI flows continued to be robust with another $5.7 billion of net inflows into equity markets from foreign portfolio investors. With the latest month flows, FPIs have infused nearly $17 billion into Indian equities in the last 3 months. But how did the various indices perform in July 2023 amidst the deluge of FPI inflows? While the Nifty rallied by 2.94% to the 19,754 level, the aspiring Nifty Next-50 index also gained 3.51% in the month of July 2023. But the real action was seen in alpha hunting. The Mid-Cap 100 rallied by 5.50% in July 2023, while the Small Cap 100 index rallied a whopping 7.99% in the month. Let us now turn to the debt markets.
While our focus here is on equity funds, the bond yields continue to be a critical factor in determining the attractiveness of equities and so we will focus on the bond market yield movements too. Bond markets saw a bounce in yields in July 2023, with the rally in the last week of July being the sharpest weekly rally since February 2023. For the month of July 2023, the 10-year benchmark bonds closed with yields of 7.18%, higher than the closing levels of May and June 2023. There were several reasons. The 25 bps rate hike by the Fed in its July policy boosted yields in the US markets combined with a sell-off in bonds. In India, higher than expected inflation in June plus prospects of higher vegetables and cereals inflation in July and August have also pushed bond yields higher. That is keeping equity markets also slightly ambivalent.
Here is a quick summary of how the 7 major categories of equity funds performed in July 2023 in terms of 1-year, 3-year and 5-year returns. We look at 6 actively managed funds and 1 passive equity fund for the purpose of analysis.
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
Canara Robeco Blue-Chip (G) | 17.687% | 22.116% | 15.125% |
Nippon India Large Cap (G) | 26.292% | 31.144% | 15.090% |
Baroda BNP Paribas Large (G) | 18.374% | 21.705% | 14.475% |
BSE 100 (TR) Index | 16.528% | 23.400% | 13.105% |
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
Quant Active Fund (G) | 21.782% | 36.253% | 23.477% |
Mahindra Manulife Multi (G) | 25.017% | 32.070% | 19.154% |
Nippon India Multi Cap (G) | 32.317% | 40.103% | 17.927% |
BSE 500 (TR) Index | 17.415% | 15.151% | 13.502% |
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
Quant Flexi Cap Fund (G) | 26.411% | 38.727% | 22.492% |
PPFAS Flexi Cap Fund (G) | 23.262% | 26.383% | 19.324% |
PGIM India Flexi Cap Fund (G) | 15.993% | 25.861% | 18.030% |
BSE 500 (TR) Index | 17.415% | 25.151% | 13.502% |
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
Quant Mid-Cap Fund (G) | 29.015% | 41.497% | 23.849% |
PGIM India Mid-Cap Fund (G) | 13.009% | 35.759% | 21.619% |
SBI Magnum Midcap Fund (G) | 23.496% | 37.003% | 19.357% |
BSE Midcap (TR) Index | 27.998% | 31.787% | 14.992% |
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
Quant Small Cap Fund (G) | 41.779% | 53.304% | 29.001% |
Axis Small Cap Fund (G) | 25.527% | 38.271% | 24.136% |
Nippon Small Cap Fund (G) | 37.040% | 48.588% | 23.420% |
BSE Midcap (TR) Index | 30.470% | 40.179% | 17.193% |
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
Quant Tax Plan (G) | 21.241% | 40.047% | 25.448% |
Mirae Asset Tax Saver (G) | 18.359% | 27.264% | 17.559% |
Bandhan Tax Advantage (G) | 25.094% | 34.439% | 16.788% |
BSE 200 (TR) Index | 16.180% | 24.127% | 13.388% |
Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23) with 1-year and 3-year returns for comparative reference. The benchmark has been shaded:
Name of Fund | 1-Year Return | 3-Year Return | 5-Year Return |
DSP Nifty-50 Equal Weight (G) | 18.669% | 28.306% | 13.166% |
Nippon India Sensex Fund (G) | 16.759% | 22.043% | 13.083% |
ICICI Pru Sensex Fund (G) | 16.664% | 21.911% | 13.076% |
Benchmark Index | N.A. | N.A. | N.A. |
Here is what we read from the equity funds story for July 2023.
With the equity indices like the Nifty and Sensex close to peak levels, outperformance by the equity funds is axiomatic. It is the extent of outperformance that is the icing on the cake!
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