Indian markets witnessed heightened volatility in the month of July. Union budget failed to cheer up the equity market, but on the other hand resulted in a huge rally in debt markets. Benchmark indices Nifty 50 and Sensex fell by 5.7% and 4.9% respectively in July. Broader market indices witnessed higher losses. The budget failed to give a short term growth stimulus to the economy that markets were expecting.
Introduction of the super-rich tax by hiking surcharge led to a huge sell-off in Indian equities by the foreign investors. This was aggravated by muted first quarter corporate earnings results, weak monsoon and IMF cutting India’s growth outlook. On the contrary, the announcement that India will raise funds from overseas markets by issuing sovereign bonds, cheered up the debt market. This led to sharp increase in government bond prices on the expectation that the borrowing costs will come down going forward.
International gold and equity funds along with domestic Gilt funds which invest in government debt securities emerged as the best performing mutual funds in the month of July 2019. Benchmark yield i.e. the 10Y G-sec witnessed a 51 bps (100 bps = 1%) fall ending the month at 6.37%, thus delivering high returns.
Let’s take a look at the best performing mutual funds across categories in July, 2019:
Most of the equity category mutual funds gave negative returns in the last month due to losses posted by broad market indices. Among the popular equity categories, multi cap category funds performed better than the large cap, small cap and mid cap categories in the last one month. Although international funds outperformed all the major India focused equity funds over the last month, their 5 year returns are much lower. This reinforces the fact that you should not invest based on the short term returns only. Also, equities may be volatile in the short run but can be significant wealth generators over the long run.
Best performing large cap funds in July, 2019:
Best performing small cap funds in July, 2019:
Best performing mid cap funds in July, 2019:
Best performing multi cap funds in July, 2019:
Best performing ELSS Tax Saver Funds in July, 2019:
For any investor, it is most important to focus on consistency of returns rather than taking investment decisions based on very short term returns. Also, the interim volatility in equity funds make a stronger case of investing through SIP mode to take advantage of rupee cost averaging over your investment horizon.
As an investor you should take into account your investment objective, investment horizon and risk profile before making any investment decisions. Explore investment packs on Paytm Money app which are designed to take care of all your investment needs.