Predict Mutual Fund Direction

[Pravi]

Hello

By having the information of the:
1) Percentage of each stock holding in an MF scheme and
2) Market Capitalization of each stock in that MF scheme

Can I not easily predict whether that particular mutual fund scheme would go up or down on that particular day, despite knowing that I'm beating the very purpose of mutual funds by not leaving it with the advisors?

Thanks

 

[tachniki]

Obviously you can. By seeing Nifty Index, you can guess Nifty Index fund approximate price. by seeing Sensex, you can guess Sensex funds price. Similarly you will be able to estimate price of active funds by seeing their price change of individual stocks which are part of that fund.

But what do you want to do with that prediction? Selling / Buying based on that? Then yes, you have time usually till 3 pm (or whatever cutoff time funds have mentioned) to make that decision on that day.

 

[its_karan]

Can I not easily predict whether that particular mutual fund scheme would go up or down on that particular day,

Yes, you can, but not with 100 %accuracy.

I do this all the time. I'll share some tips below on how this theory can actually be implemented:

1. Applicable only to schemes with very low Portfolio Turnover.: Why so schemes like of AMC Quant cannot be predicted as they can change the complete portfolio in a day. Where you can use this is where churning is very less
   For example:
   • Parag Parikh Flexi Cap Fund
   • Parag Parikh Tax Saver Fund
   • Quantum Flexi Cap Fund
   • (Only consider Portfolio Turnover excluding Arbitrage Positions)
2. Use Google Sheets, as Google Finance will provide the Current Market Price (CMP).

Even if you follow Rules 1 and 2 above, you can only predict with reasonable accuracy. Here's why:

• The % Holding/Number of shares at the end of the last month is made available by the 10th of the subsequent month.
• If the fund manager made value purchases during the month, those won't be accounted for because you are working with outdated data.
• Bull market main chalega ye, Bear Market main nahi as in a Bear market evryone shops for Discounted stocks to their Fail value and thus Holding will change from ur data

Ultimately, this exercise is futile in my opinion because you can only take advantage of it once or twice a year. Examples in 23-24-25 what I have seen is:

• When U.S. Treasury yields crossed 5%
• On the Indian election date

I'll share an extract from Parag Parikh Tax Saver Fund for today, 6th December 2024. Overall the Fund NAV should be at par from tomorrow

 

[Pravi]

Yes, you can, but not with 100 %accuracy.

I do this all the time. I'll share some tips below on how this theory can actually be implemented:

1. Applicable only to schemes with very low Portfolio Turnover.: Why so schemes like of AMC Quant cannot be predicted as they can change the complete portfolio in a day. Where you can use this is where churning is very less
   For example:
   • Parag Parikh Flexi Cap Fund
   • Parag Parikh Tax Saver Fund
   • Quantum Flexi Cap Fund
   • (Only consider Portfolio Turnover excluding Arbitrage Positions)
2. Use Google Sheets, as Google Finance will provide the Current Market Price (CMP).

Even if you follow Rules 1 and 2 above, you can only predict with reasonable accuracy. Here's why:

• The % Holding/Number of shares at the end of the last month is made available by the 10th of the subsequent month.
• If the fund manager made value purchases during the month, those won't be accounted for because you are working with outdated data.
• Bull market main chalega ye, Bear Market main nahi as in a Bear market evryone shops for Discounted stocks to their Fail value and thus Holding will change from ur data

Ultimately, this exercise is futile in my opinion because you can only take advantage of it once or twice a year. Examples in 23-24-25 what I have seen is:

• When U.S. Treasury yields crossed 5%
• On the Indian election date

I'll share an extract from Parag Parikh Tax Saver Fund for today, 6th December 2024. Overall the Fund NAV should be at par from tomorrow

View attachment 76572

Thanks for your guidance