Equity mutual fund categories that are beating the market!

Markets are still a long way from regaining lost ground. However, there are equity mutual fund categories that beat the markets. Continue reading to learn more.

Nifty 50 broke over crucial resistance levels of 16,200 to 16,400 as the week began. Furthermore, it broke through the extended neckline of the Head and Shoulder chart pattern from below but failed to break through its 50-Day Exponential Moving Average (EMA). Nifty 50 futures saw a bearish crossing of the 50-Day EMA and the 200-Day EMA on May 23, 2022. This is a bearish indicator known as death crossover.

As of present, the Nifty 50 continues to struggle to trade convincingly above the aforesaid extended neckline, as well as facing rejection between 16,600 and 16,650 levels. As a result, in order to continue northward, it must break through this level, which will attract heavy opposition at 17,000 levels. On the flip side, the nearest support lies between 16,200 and 16,400. Furthermore, for bulls to seize the lead, the price must surpass its 50-Day EMA and 200-Day EMA.

However, the market (Nifty 500) and equity mutual funds have been sinking since October 19, 2021. The Nifty 500 Total Returns Index (TRI) fell over 10 per cent.

Equity mutual fund categories such as Thematic – PSU, Sectoral – Infrastructure, Small-Cap, Thematic – Consumption, Thematic – MNC, Dividend Yield, and Multi-Cap outperformed the Nifty 500 TRI, as shown in the table above, whilst Sectoral – Banking, Thematic – ESG, International, Sectoral – Pharmaceuticals, and Sectoral – IT underperformed the benchmark.

However, this does not imply that they will continue to dominate. Because markets operate in cycles, winners change. As a result, conducting due diligence before investing is critical. Furthermore, having a solid asset allocation strategy in place is critical. Concerning equity funds, we feel that long-term investment in flexi-cap funds yields better risk-adjusted returns and would fit most investors' risk tolerance.