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All you need to know about mutual funds last week


Only 6 percent of trading days since 1990 produced new market highs i.e for 94 percent of trading days the market was in a drawdown.

All you need to know about mutual funds last week
A drawdown is defined as: "A drawdown is a peak-to-trough decline during a specific period for an investment." For example, the Nifty 50 went from 12,088 to 10,980 since early June or a Drawdown of 10 percent. The markets are almost always in a drawdown. Only 6 percent of trading days since 1990 produced new market highs i.e for 94 percent of trading days the market was in a drawdown. The average drawdown for NIFTY 50 over the past 29 years has been -18%!!
The chart below shows how much the Nifty index was down on that date from the last all-time high. Spend some time in understanding it properly.
So what about a -10 percent drawdown.
Nifty 50 has been in a -10 percent or worse drawdown in 59 percent of the trading days since 1990.
Read the above sentence again.
How about 1-years return after a -10 percent or worse drawdown? There is a 68 percent chance that the 1-year return after a -10 percent drawdown will be positive. The average 1-year return observed over the past 30 years post a -10% or worse draw is 21%. Of course, your odds improve considerably the longer you are willing to hold equity index. Remember, invest for the long run. 
If that sounds exciting, do know the downside too. The worst 1-year return observed post a -10 percent or worse draw is -50 percent!! You can still lose half of what is left. But, the best 1-year return observed post a -10 percent or worse draw is 312 percent.
What if the market sinks another 10 percent for a drawdown of 20 percent? 39 percent of the time Nifty has been in a -20 percent or worse draw since 1990. Avg 1-year return is 27 percent, and you can still lose 44 percent from there in the worst recorded case.
So, there you go. It is never as bad as it seems. The historical odds are good and the only requirement from the investor is to avoid the behaviour gap.
Top news headline
DSP Mutual Fund has marked down its investment in non-convertible debentures (NCDs) of Coffee Day Natural Resources Pvt Ltd (CDNRPL) by half. In communication by the fund house, it was specified that DSP Credit Risk Funds exposure to NCDs of CDNRPL was Rs 69 crores as on July 29, 2019. The fund house also said that the exposure is secured by a pledge on the listed shares of CDEL and a land parcel.
As per a Finance Ministry Statement, the National Housing Bank (NHB) is infusing an additional ₹10,000 crore in NBFCs from Friday with a view to improving the flow of funds for housing loans. This would be in addition to two existing refinance schemes of the NHB.
On Thursday, US President Donald Trump announced that he would impose a 10 percent tariff on $300 billion of Chinese imports. On the other hand, Beijing has promised to respond if the US insists on additional tariffs on Chinese imports. Amidst the abrupt escalation of the trade war between the world’s largest economies stocks across nations were trading low during the week.
Index returns
 Index  Weekly open  Weekly close  Change 
 BSE Sensex37,882.7937,118.22-2.02%
 S&P BSE SmallCap13,060.3412,496.35-4.32%
 S&P BSE MidCap13,856.1913,546.92-2.23%
Source- BSE/NSE
Top 5 best performing funds
ABSL Gold3.30%3.70%Fund of Funds
Reliance Gold Saving1.90%3.00%Fund of Funds
Kotak Gold1.90%3.50%Fund of Funds
Quantum Gold Saving1.90%3.20%Fund of Funds
IDBI Gold1.70%1.80%Fund of Funds
Source –
Top 5 worst performing funds
HSBC Infrastructure-5.40%-4.00%Sectoral
IPRU India Opp-5.30%NASectoral
Reliance Tax Saver-5.10%2.30%ELSS
Canara Robeco Small Cap-5.00%-8.90%Small Cap
DSP World Mining-4.80%8.10%Fund of Funds
Source –
What investors bought
We saw the most inflows in these 5 Funds –
Mirae Asset Large Cap1.80%12.10%Large Cap
Mirae Asset MidcapNANAMid Cap
HDFC Small Cap -13.60%10.40%Small Cap
Mirae Asset Emerging Bluechip3.10%13.90%Large & Mid Cap
Parag Parikh LTE0.10%11.60%Multi Cap
Source –
What investors sold
We saw the most outflows in these 5 Funds
HDFC Mid Cap-12.30%12.10%Mid Cap
ABSL Equity Hybrid 95-3.80%NAHybrid
Reliance Equity Hybrid -7.10%10.40%Hybrid
SBI Blue Chip-1.70%13.90%Large Cap
Kotak Standard Multicap-0.90%11.60%Multi Cap
Source –
Movers & Shakers
1) SBI Mutual Fund has appointed Milind Agrawal (Equity Research Analyst) as Fund Manager of SBI Banking & Financial Services Fund.
2) G Narayanan and Jaideep Singh have been appointed as Independent Directors on the board of Canara Robeco Asset Management Company Limited.
3) Sandip Ghose has been appointed as Independent Director on the board of Motilal Oswal Trustee Company Limited.
4) Aditya Birla Sun Life Mutual Fund has appointed Balasubramanian (Chief Executive Officer) as Managing Director of the AMC.
Quote of the week:
You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.
— Peter Lynch

Market Movers

Adani Ports694.35 47.45 7.33
Bajaj Auto4,167.10 113.20 2.79
HUL2,482.90 65.20 2.70
Bharti Airtel538.75 10.10 1.91
Grasim1,480.75 22.55 1.55
HUL2,480.75 63.85 2.64
Bajaj Auto4,164.95 105.95 2.61
Bharti Airtel538.90 10.20 1.93
Bajaj Finserv11,998.00 179.95 1.52
IndusInd Bank994.90 10.65 1.08
Adani Ports694.35 47.45
Bajaj Auto4,167.10 113.20
HUL2,482.90 65.20
Bharti Airtel538.75 10.10
Grasim1,480.75 22.55
HUL2,480.75 63.85
Bajaj Auto4,164.95 105.95
Bharti Airtel538.90 10.20
Bajaj Finserv11,998.00 179.95
IndusInd Bank994.90 10.65


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