Consider equity mutual funds with good risk-to-reward profiles; these 12 MFs have beaten benchmarks
stocks with a market cap of over Rs.100 crore, 80.6% (or 2,425 stocks) delivered negative returns in October. Moreover, 1,999 stocks, or 66.4%, saw a price fall of more than 5%. The returns are calculated for closing values between 30 September and 25 October.
Strong FPI selling, driven by the Chinese stimulus, low Chinese stock valuations, Middle East tensions, and crude oil volatility have weighed on the equity markets.
Experts believe that the US election uncertainty, modest earnings growth in India amid weak demand, and high domestic valuations will keep volatility high in the near term. Of the 211 stocks that have declared their September quarter results so far, Reuters-Refinitiv has compiled estimates (for more than two analysts) for 132 stocks. Among these, 69 stocks, or 52.2%, missed the estimates.
The Nifty 50 index trades at a TTM PE of 22.7 times, which is 0.5% higher than the past one-year average. On the other hand, the Nifty Midcap 100 and Nifty Small Cap 100 indices trade at TTM PEs of 40.3 times and 34.3 times, respectively. Compared to the past one-year average, the valuation premium of the mid- and small-cap benchmarks stood at 19.4% and 18.9%, respectively.
The data is sourced from Trendlyne.
The recent volatility has also dented the performance of equity diversified mutual funds, with all 188 funds delivering negative returns in the past month. However, the resilience of equity funds is visible as 150 out of the 188 funds have lost less than their respective benchmark indices in the past month, according to data compiled from the ACE MF database. The data is based on 25 October NAVs.
