Equity Mutual Funds Offer Up to 9% Returns in October: Is the Rally Here to Stay?
In October, equity mutual funds showcased an impressive performance, delivering returns of nearly 9%. This surge significantly outpaced benchmark indices such as the Nifty50 and BSE Sensex, which recorded increases of approximately 4.9% and 5% respectively. The remarkable growth can be largely attributed to sectoral and thematic funds that dominated the return charts.
Key Highlights:
– Performance Overview:
– Returns: Equity mutual funds achieved a striking 9% return in October.
– Benchmark Indices: The Nifty50 and BSE Sensex rose by about 4.90% and 4.95%.
– Funds Analysis:
– Out of 578 equity mutual funds, 568 reported positive returns, while only 10 funds experienced losses, primarily among international funds.
– Top Performers:
– Motilal Oswal Nasdaq 100 FOF: 9.02%
– WOC Digital Bharat Fund: 7.58%
– HDFC Technology Fund: 7.05%
– Motilal Oswal Business Cycle Fund: 6.97%
– Several funds from Mirae Asset Mutual Fund achieved returns ranging from 6.68% to 6.71%.
– Lowest Performers:
– ICICI Pru Strategic Metal and Energy Equity FOF: -5.07%
– Mirae Asset Hang Seng TECH ETF FOF: -3.11%
Will the Rally Continue?
Experts suggest that the solid performance of equity mutual funds in October follows a sluggish September. The ongoing earnings season indicates a steady growth trajectory:
– Large-cap companies are projected to see earnings growth of 6–7%.
– Mid and small-cap firms could achieve impressive growth rates of 14–16% year-on-year.
Shweta Rajani, Head of Mutual Funds at Anand Rathi Wealth, highlights that macroeconomic factors, including an anticipated GDP growth of 7.8% in Q1 FY26 and favorable inflation adjustments, bolster positive market sentiment.
Investment Strategy Recommendations:
– Diversification: Aim for a balanced mix of large-cap, mid-cap, and small-cap funds, ideally in a 55:23:22 ratio.
– Focus on Stability: Choose funds based on your risk tolerance, investment horizon, and financial objectives. This approach will help you navigate market cycles effectively.
In conclusion, equity mutual funds’ robust returns in October indicate an optimistic market outlook. Investors are encouraged to stay informed and explore diversified strategies to enhance their portfolios. Continuously monitoring market developments will be vital, as these factors may significantly influence future performance.