Before we get to the top performing equity funds in 2019, let us first zero in on the benchmark to be considered. Clearly, the Nifty would be a good benchmark for the large cap funds and the NSE 200 would be a good benchmark for multi cap funds. So how exactly did these two benchmarks perform in the year 2019?
Data Source: NSE
Here we look at two benchmarks i.e the Nifty 50 and the Nifty 200. The Nifty 50 has given a pure return of 11.96% YTD in 2019 while the Nifty 200 has given an YTD return of 8.52%. However, for the purpose of mutual fund benchmarking, the total returns index (TRI), inclusive of dividend yield, is a better measure. While the Nifty 50 has a dividend yield of 1.24%, the Nifty 200 has a dividend yield of 1.21%. Now, that takes the TRI to 13.20% in case of Nifty 50 and 9.73% for the Nifty 200. It is against this TRI that the top performers of the large cap funds and the multi cap funds will be benchmarked.
Top performing large cap funds in CY 2019
One can argue that 1-year is a relatively short period to evaluate the performance of large cap equity funds. But the reason, this 1-year performance becomes relevant is that even in 2018 the active funds had struggled to outperform the benchmark indices. We look at a cross section of large cap funds (as per the new SEBI definition) and the top performers over the last one year. For the sake of consistency, we consider only the regular plans and not direct plans. Also, we take into account growth option and ignore the dividend option.
| Large Cap Funds | 1-Year Return | Benchmark (Nifty-50 TRI) | Fund Performance |
| Axis Blue Chip Fund (G) | 20.95% | 13.20% | Outperformer |
| BNP Paribas Large Cap (G) | 19.77% | 13.20% | Outperformer |
| Canara Robeco Blue Chip (G) | 18.01% | 13.20% | Outperformer |
| HSBC Large Cap Equity (G) | 17.99% | 13.20% | Outperformer |
| LIC Large Cap Fund (G) | 17.36% | 13.20% | Outperformer |
| DSP Top 100 Equity (G) | 17.18% | 13.20% | Outperformer |
| Kotak Blue Chip (G) | 16.56% | 13.20% | Outperformer |
| L&T India Large Cap (G) | 15.52% | 13.20% | Outperformer |
| Mirae Large Cap (G) | 14.31% | 13.20% | Outperformer |
| Tata Large Cap Fund (G) | 14.12% | 13.20% | Outperformer |
Data Source: Morningstar
Out of the 33 large cap funds available in India, 16 large cap funds did better than the Nifity-50 TRI, giving a success ratio of about 50%. That means if you were to select a large cap fund at random then you stood a 50% chance of beating the Nifty TRI index. That would surely go down as an average year. However, what must not be forgotten is that many of the above funds have taken additional risk exposure to a handful of stocks and that could be the reason for alpha. One thing is certain that the top-10 funds (regular plans) have outperformed the Nifty TRI by a comfortable margin.
Top performing Multi Cap funds in CY 2019
Here again, 1-year is a relatively short period to evaluate the performance of multi-cap funds. The reason we are looking at multi cap funds as a distinct asset class is that they have been seeing heavy inflows in the last one year. We look at a cross section of multi cap funds (as per the new SEBI definition) and the top performers over the last one year. Again, we consider only regular plans and take into account the growth option only.
Out of the 33 large cap funds available in India, 16 large cap funds did better than the Nifity-50 TRI, giving a success ratio of about 50%. That means if you were to select a large cap fund at random then you stood a 50% chance of beating the Nifty TRI index. That would surely go down as an average year. However, what must not be forgotten is that many of the above funds have taken additional risk exposure to a handful of stocks and that could be the reason for alpha. One thing is certain that the top-10 funds (regular plans) have outperformed the Nifty TRI by a comfortable margin.
Top performing Multi Cap funds in CY 2019
Here again, 1-year is a relatively short period to evaluate the performance of multi-cap funds. The reason we are looking at multi cap funds as a distinct asset class is that they have been seeing heavy inflows in the last one year. We look at a cross section of multi cap funds (as per the new SEBI definition) and the top performers over the last one year. Again, we consider only regular plans and take into account the growth option only.
| Multi Cap Fund | 1-Year Return | Benchmark (Nifty-200 TRI) | Fund Performance |
| Axis Multi Cap Fund (G) | 19.40% | 9.73% | Outperformer |
| DSP Equity Fund (G) | 19.25% | 9.73% | Outperformer |
| JM Multi Cap Fund (G) | 18.99% | 9.73% | Outperformer |
| LIC MF Multi Cap (G) | 15.56% | 9.73% | Outperformer |
| BNP Paribas Multi Cap (G) | 14.42% | 9.73% | Outperformer |
| Kotak Standard Multi Cap (G) | 14.16% | 9.73% | Outperformer |
| Union Multi Cap (G) | 13.72% | 9.73% | Outperformer |
| UTI Equity Fund (G) | 12.89% | 9.73% | Outperformer |
| Tata Multi Cap Fund (G) | 12.38% | 9.73% | Outperformer |
| SBI Magnum Multi Cap (G) | 12.26% | 9.73% | Outperformer |
Data Source: Morningstar
Two things stand out about the performance of multi cap funds. Out of a total of 36 multi cap funds, 15 have managed to outperform giving an outperformance ratio of 40% as compared to 50% for the large cap funds. However, in the case of large cap funds and mid cap funds, the variation is huge. For example, in large fund performance, the variation is over 600 bps in case of large cap funds and over 700 bps in case of multi cap funds. That makes past data less predictable as a barometer of future returns. That could be the important takeaway as investors look at 2019 data to take cues for the calendar year 2020.
Two things stand out about the performance of multi cap funds. Out of a total of 36 multi cap funds, 15 have managed to outperform giving an outperformance ratio of 40% as compared to 50% for the large cap funds. However, in the case of large cap funds and mid cap funds, the variation is huge. For example, in large fund performance, the variation is over 600 bps in case of large cap funds and over 700 bps in case of multi cap funds. That makes past data less predictable as a barometer of future returns. That could be the important takeaway as investors look at 2019 data to take cues for the calendar year 2020.
0 comments:
Post a Comment
Please add comment