Which mutual funds have fallen the least in this market correction? Should you switch?
This article shows you which funds have not fallen the most now that the stock market has corrected by 10-15% from life-time highs.
Which mutual funds have fallen the least in this market correction? Should you switch?
Posted on 20 Nov 2024
Author: Sayan Sircar
10 mins read
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This article shows you which funds have not fallen the most now that the stock market has corrected by 10-15% from life-time highs.
Disclaimer: The fund names are not recommendations to invest/exit investment in them
📚 Topics covered:
- Why is the stock market falling from its all-time high?
- How much have different mutual funds fallen from 52-week highs?
- How do you manage your recently fallen portfolio?
- Should you switch to these funds?
Why is the stock market falling from its all-time high?
One of the first things that many new investors forget is that:
Stock markets do not grow like an FD
The recent market correction of 10-15% was not unexpected given that the October earnings season had started weak. We hinted at this just a month back: How much money will you lose if the stock market falls in the short term?.
To understand where the markets have fallen and to know the impact on your portfolio, we have shown the fall from a 52-week high for various equity mutual fund categories using data from AMFI.
This is the sister article to this one: Are you invested in these mutual funds which have fallen the most in this market correction? What to do now?
How much have different mutual funds fallen from 52-week highs?
In each category, we have shown the best 5 performing funds. In each row, we have given the fund house names since in most categories, there would be only one fund.
Flexicap funds
| Fundhouse | Fall % |
|---|---|
| PPFAS Mutual Fund | -3.99% |
| Helios Mutual Fund | -6.56% |
| Trust Mutual Fund | -6.60% |
| HDFC Mutual Fund | -7.27% |
| WhiteOak Capital Mutual Fund | -7.89% |
Here the performance of PPFAS Flexi Cap fund is not surprising given the nearly 20% cash holding in this fund as per October 2024 portfolio declaration. Whether that is good or bad depends on whether you are using your equity funds to manage your asset allocation or you prefer to do so yourself.
Midcap funds
| Fundhouse | Fall % |
|---|---|
| Motilal Oswal Mutual Fund | -6.00% |
| Kotak Mahindra Mutual Fund | -6.30% |
| WhiteOak Capital Mutual Fund | -6.31% |
| HDFC Mutual Fund | -7.47% |
| Franklin Templeton Mutual Fund | -7.66% |
ELSS funds
| Fundhouse | Fall % |
|---|---|
| Taurus Mutual Fund | -6.00% |
| PPFAS Mutual Fund | -6.51% |
| WhiteOak Capital Mutual Fund | -6.53% |
| Quantum Mutual Fund | -6.86% |
| Baroda BNP Paribas Mutual Fund | -7.64% |
Multicap funds
| Fundhouse | Fall % |
|---|---|
| Motilal Oswal Mutual Fund | -6.13% |
| WhiteOak Capital Mutual Fund | -6.81% |
| Baroda BNP Paribas Mutual Fund | -7.01% |
| DSP Mutual Fund | -7.95% |
| LIC Mutual Fund | -8.01% |
Large & Midcap funds
| Fundhouse | Fall % |
|---|---|
| SBI Mutual Fund | -7.54% |
| LIC Mutual Fund | -7.87% |
| WhiteOak Capital Mutual Fund | -8.02% |
| Edelweiss Mutual Fund | -8.12% |
| Sundaram Mutual Fund | -8.25% |
Focused funds
| Fundhouse | Fall % |
|---|---|
| HDFC Mutual Fund | -7.06% |
| SBI Mutual Fund | -7.10% |
| HSBC Mutual Fund | -7.49% |
| Union Mutual Fund | -7.64% |
| Mirae Asset Mutual Fund | -7.65% |
Value funds
| Fundhouse | Fall % |
|---|---|
| DSP Mutual Fund | -4.97% |
| Quantum Mutual Fund | -6.89% |
| HSBC Mutual Fund | -7.64% |
| ICICI Prudential Mutual Fund | -8.25% |
| Union Mutual Fund | -8.45% |
Largecap funds
| Fundhouse | Fall % |
|---|---|
| Motilal Oswal Mutual Fund | -7.44% |
| Nippon India Mutual Fund | -8.05% |
| DSP Mutual Fund | -8.25% |
| Franklin Templeton Mutual Fund | -8.92% |
| WhiteOak Capital Mutual Fund | -8.96% |
Dividend Yield funds
| Fundhouse | Fall % |
|---|---|
| Franklin Templeton Mutual Fund | -8.47% |
| SBI Mutual Fund | -8.61% |
| UTI Mutual Fund | -8.65% |
| Sundaram Mutual Fund | -9.28% |
| Aditya Birla Sun Life Mutual Fund | -9.38% |
Smallcap funds
| Fundhouse | Fall % |
|---|---|
| HDFC Mutual Fund | -6.46% |
| Motilal Oswal Mutual Fund | -6.71% |
| UTI Mutual Fund | -7.20% |
| Bank of India Mutual Fund | -7.24% |
| Tata Mutual Fund | -7.37% |
We have deliberately excluded contra funds since there are only three of those and their ranking is already covered in the worst-performer article.
How do you manage your recently fallen portfolio?
A correction in the equity market allows savvy investors to make more money by rebalancing.
Rebalancing allows you to systematically buy low and sell high
To implement rebalancing, you must first create a portfolio-level asset allocation plan using a tool like the Arthgyaan goal-based investing tool that covers your main goals like retirement / FIRE, children’s college education/marriage, house purchase etc.
We will consider a typical investor portfolio with some stocks, mutual funds, and a mix of EPF, PPF and NPS investments. Say you have assets of ₹50 lakhs and a SIP amount of ₹50,000/month. Your investing plan will have:
- your current asset allocation to equity and debt: say this is ₹30 lakhs in debt and the rest in equity or 40:60
- your target asset allocation of 60:40
To interpret this, the portfolio has:
- ₹20L in equity and ₹30L in debt
- it should have ₹30L in equity and the rest ₹20L in debt (60% of 50 = 30 to reach the 60:40 ratio)
- to rebalance, ₹10L has to be sold from the debt portfolio and invested in equity
In this case, rebalancing is being triggered since the asset allocation is to be changed by 20% points from 40:60 to 60:40. We should, however, rebalance before the gap becomes so vast. For example, a typical value called the corridor can be taken as 5%, i.e. rebalance, when the asset allocation becomes either 55:45 or 65:35 with a target of 60:40.
Using a goal-based investing calculator, identify the amount of equity you need to buy. Then, sell that amount from your debt assets (unless they are locked like EPF and PPF) and invest that amount into equity in one go. If you are not comfortable investing in one shot, do it in a few parts over the next 3-4 weeks. If your debt assets are locked, like PPF and EPF, adjust your SIP amount to be equity-heavy over the next few months.
If you are retired, you should look at your bucket allocation strategy and use this opportunity to transfer some assets from your debt to your equity bucket. Of course, this assumes you have enough in your cash bucket for the next five years’ expenses.
Should you switch to these funds?
If you already have invested in these funds then congratulations are in order. Leaving aside the ability of the fund manager’s ability, it is also a testament to the research performed before entering the fund. That being said, outperformance of certain active funds vs. their own peers is a temporary phenomenon. If you are not invested in these funds, there is no real reason to switch given that performances of funds always oscillate between best and worst with index funds being in the middle. Given that capital gains tax is 12.5% on profits, there is no logic to switch from the worst to the best performers based on one-time underperformance.
Related Articles
- Are you invested in these mutual funds which have fallen the most in this market correction? What to do now?
- The worst performing mutual funds of 2021: are you invested in these funds?
- The worst performing mutual funds of 2022: are you invested in these funds?
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This post titled Which mutual funds have fallen the least in this market correction? Should you switch? first appeared on 20 Nov 2024 at https://arthgyaan.com
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