How have the Indices changed??

The media is flashing across every medium that the markets are hitting their all time highs every day, and the crystal ball that some of the experts gaze into is showing further rise in the coming days. Yet, the refrain remains – How come my mutual fund is not doing so well?To answer this crucial question, I looked up how have the major indices as well as the sectoral indices performed. As can be seen from the chart above, this is a stock pickers market and the movements in the indices, along with the stocks that make up these indices have been anything but uniform.It’s not to say that the markets have always been moving in a pack. There have been disparities. But the last one year has been specially so. And on top of that the timings are also so varied that it is now extremely demanding of the fund managers and the stock pickers.

In terms of the day when the markets were at their lowest in the last one year, the 10TH. Of December 2018 and the 22nd of August 2019 have been the black days. On the 10th. Of December last year, the narrow index as well as the broad index saw its worst point. But that is nearly a year back. From there on till yesterday (24.11.2019), the recovery has been quite good — nearly 17% for the Sensex and a little less for the BSE 200. However if we looking for a day when the markets really felt the blow in its solar plexus, it is the 22nd. Of August. Of the 16 indices that I have tracked over this time, 6 of them had their worst day on the 22nd. Of August —-just a couple of months back. So obviously the exposure to stocks that made up these sectors are lagging those that have seen their lows nearly a year back.
Even more telling is the rebound. From just two months back, where the Auto sector was at its lowest one year, the growth in the last 60days is a staggering 20% and the Oil and gas sector which saw its lowest point in late August, the rebound has been more than 21%. BUT, the growth of the participants making up these two are very very varied.

So to sum up, the movements of nearly all the constituents (except FMCG, Tech and Capital Goods) have been stellar. If your fund had exposure to the leaders in the other segments then they are returning very encouraging returns. For the funds that have been invested in the frontline stocks of the major sectors they would have made money. But for a sector pick – Oil & Gas, Realty, Banks and Auto are the clear winners.

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