Houthi Drone attack causes loss of Rs. 1.78 lakh crore in Dalal Street
On Friday, 13th September 2019, stock markets across the Globe were coasting along nicely.
This prompted Rakesh Jhunjhunwala, the Badshah of Dalal Street, to issue the all-clear signal.
“Markets have bottomed out,” the Badshah ruled, giving us clearance to go to Dalal Street for shopping.
However, thereafter, the Houthis, a group of Shia militants backed by Iran, launched a deadly drone attack on Saudi Arabia’s oil refineries, destroying their production facilities.
President Trump threatened to attack Iran in retaliation and cripple it for life.
This sorry state of affairs caused crude oil prices to surge to the upper circuit.
BREAKING: Brent crude oil surges more than 17%, WTI crude oil surges more than 14% after attack on Saudi oil facility cut production over the weekend https://t.co/5pjnGl9LzW pic.twitter.com/DQWun1L6wO
— CNBC Now (@CNBCnow) September 15, 2019
This in turn caused the Indian rupee to plunge against the US dollar over fears that the higher oil prices would cause inflation, depress economic growth and increase the fiscal deficit.
Naturally, the stock markets sunk like a stone.
The Sensex sank 642 points while the Nifty kept pace with a fall of 186 points.
The Bank Nifty plunged 723 points.
By the EOD, investors were poorer by a mammoth Rs. 1.78 lakh crore.
#MarketAtClose | Market sees a major sell-off, #Nifty erases 2019 gains; #Sensex slips 642 points to end at a 2-week closing low pic.twitter.com/ojhLC2EFcP
— CNBC-TV18 (@CNBCTV18Live) September 17, 2019
Market Selling Intensifies
Nifty mkt cap wipeout 1.78 lk cr in 2 sessions
Nifty Trades below 10850
Nifty Bk down by more than 650 pts
Financials like Axis, HDFC Twins drag
Banks, Auto, Metal, Realty tanked most
Uncertainty on crude remains
Rupee falls further, bond yields inch up— Deepali Rana (@deepaliranaa) September 17, 2019
Sumaira Abidi, the charming anchor with CNBC-TV18, was spooked by the savage plunge.
She postponed her programme, realizing sensibly that her viewers would not be much interested in talk about wealth creation at a time like this.
Because of the big fall in the #market this afternoon.. We will move this show to 2pm on Thursday #mutualfunds @feroze_azeez @ARWealth @CNBCTV18Live @CNBCTV18News
— Sumaira Abidi (@SumairaAbidi) September 17, 2019
Mutual Fund investors rejoice as gains gush in
However, in sharp contrast to the morose mood in Dalal Street, another group of investors is rejoicing.
These investors have reason to rejoice because their investments in mutual funds have yielded an eye-popping gain of 400%+ over the past 10 years.
Avneet Kaur of ET Online has revealed, after much back-breaking research, that over the past 10 years, 21 equity schemes have more than quadrupled investors’ money.
In the last five years, three mutual fund schemes have more than doubled investors’ money.
The names of these worthies are Mirae Asset Emerging Bluechip Fund, SBI Small Cap Fund and Aditya Birla SL Banking & Financial Services Fund.
Six-year Toppers
| Schemes | Rs 1 lakh invested 10 years ago became | Absolute return (%) |
| Mirae Asset Emerging Bluechip | 4,21,067 | 321 |
| SBI Small Cap Fund | 4,08,305 | 308 |
| Reliance Small Cap Fund | 4,07,809 | 308 |
| Canara Robeco Emerging Equities Fund | 3,84,991 | 285 |
| DSP Small Cap Fund | 3,50,449 | 250 |
| Kotak Emerging Equity Scheme | 3,49,341 | 249 |
| L&T Midcap Fund | 3,25,922 | 226 |
| DSP Midcap Fund | 3,25,766 | 226 |
| Principal Emerging Bluechip Fund | 3,25,444 | 225 |
| ICICI Pru Banking & Fin Serv Fund | 3,24,698 | 225 |
| ICICI Pru Midcap Fund | 3,18,237 | 218 |
| Franklin Build India Fund | 3,10,895 | 211 |
| Invesco India Contra Fund | 3,08,119 | 208 |
| Edelweiss Mid Cap Fund | 3,07,805 | 208 |
| Franklin India Smaller Cos Fund | 3,07,389 | 207 |
| Axis Midcap Fund | 3,06,989 | 207 |
| Invesco India Midcap Fund | 3,06,711 | 207 |
| HSBC Small Cap Equity Fund | 3,03,618 | 204 |
| HDFC Mid-Cap Opportunities Fund | 3,02,496 | 202 |
| Tata Mid Cap Growth Fund | 3,00,938 | 201 |
Three schemes multiplied investor’s wealth by more than four times in the last six years.
Around 17 equity schemes tripled invested money in the same time period.
Not surprisingly, the winning schemes have invested in mid and small cap stocks, proving the theory that stocks from these categories are wealth creators.
What is most impressive is that none of the equity schemes have generated negative returns in the last six years.
Avneet Kaur has also pointed out that over the past 10 years (since the deadly Lehman crisis crash of 2008-09), mutual fund schemes have given stupendous returns to their investors.
Three schemes including Canara Robeco Emerging Equities, Aditya Birla SL MNC Fund and ICICI Prudential FMCG Fund grew investors’ wealth by over five times.
10-year Toppers
| Schemes | Rs 1 lakh invested 10 years ago became | Absolute return (%) |
| Canara Robeco Emerging Equities Fund | 5,36,955 | 437 |
| Aditya Birla SL MNC Fund | 5,02,635 | 403 |
| ICICI Pru FMCG Fund | 5,01,804 | 402 |
| ICICI Pru Technology Fund | 4,96,293 | 396 |
| SBI Small Cap Fund | 4,88,444 | 388 |
| SBI Focused Equity Fund | 4,86,861 | 387 |
| DSP Small Cap Fund | 4,79,891 | 380 |
| HDFC Mid-Cap Opportunities Fund | 4,69,041 | 369 |
| Invesco India Multicap Fund | 4,65,281 | 365 |
| ICICI Pru Banking & Fin Serv Fund | 4,49,709 | 350 |
| Aditya Birla SL India GenNext Fund | 4,43,438 | 343 |
| Invesco India Midcap Fund | 4,37,321 | 337 |
| UTI MNC Fund | 4,34,342 | 334 |
| Reliance Pharma Fund | 4,33,784 | 334 |
| Franklin India Smaller Cos Fund | 4,31,161 | 331 |
| Edelweiss Mid Cap Fund | 4,27,081 | 327 |
| Franklin India Prima Fund | 4,23,790 | 324 |
| BNP Paribas Mid Cap Fund | 4,21,507 | 322 |
| UTI Transportation & Logistics Fund | 4,18,968 | 319 |
| DSP Midcap Fund | 4,12,967 | 313 |
| Mirae Asset Large Cap Fund | 4,01,158 | 301 |
Around 18 equity schemes more than quadrupled investors’ money in the last 10 years.
As many as 63 schemes tripled the invested sum in the same time period.
“Equity mutual funds help you to create wealth over a long period,” Avneet Kaur has rightly concluded, sending us also the subtle message that we have to hold on tight and stay invested despite all calamities!
