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Only 15 equity schemes outperformed their benchmark with positive returns last year

Many toppers in various mutual fund categories were offering negative returns in the last year.

, ET Online|
Feb 12, 2019, 12.19 PM IST
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It may sound odd, but true: many toppers in various mutual fund categories were offering negative returns in the last year. For example, SBI Bluechip Fund, the topper in large cap category, has offered -3.7 per cent in the last year. Similarly, L&T Midcap Fund, the topper in the mid cap category, offered -13.36 per cent in the same period. In fact, 85 per cent of the equity schemes gave negative returns last year, and 71 per cent schemes underperformed their respective benchmark.

No wonder, some mutual fund investors were amused by the tag of toppers for these schemes. However, to be fair, these schemes have indeed topped the chart and they also managed to beat their respective benchmark. So, they truly deserve the title. But etmutualfunds.com gets drift. That is why we tried to prepare a list of schemes that managed to beat their benchmark with positive returns.

We looked at 265 equity schemes, including large cap, large & mid cap, mid cap, multi cap, small cap, ELSS, value funds, sector schemes, thematic funds, contra funds and dividend yield schemes. While most equity schemes were struggling, we found that 15 equity mutual fund schemes managed to navigate volatility better than their peers. These 15 schemes outperformed their respective benchmark and also delivered positive returns.

Investors must remember that there is a difference between beating the benchmark and delivering positive returns. A scheme which is giving lower negative returns than its benchmark is also outperforming the benchmark.

Digging deeper, we found that the 15 outperformers included two large cap schemes, two ELSS, one contra, one mid cap, five multi cap, one sector and three thematic schemes. (See table below for the outperformers).

They beat their benchmark and offered positive returns.

Scheme name 1-yr return* (%) 3-yr return* (%) 5-yr return* (%) 1-yr outperformance from their benchmark Category
Axis Bluechip Fund 10.48 15.69 15.92 5.58 large cap
Axis Long Term Equity Fund 3.40 12.77 19.93 2.35 ELSS
Axis Midcap Fund 6.79 14.07 21.37 19.88 mid cap
Axis Multicap Fund 10.55 - - 12.40 multi cap
Canara Rob Bluechip Equity Fund 4.19 14.66 14.52 1.26 large cap
Canara Rob Equity Diver Fund 3.30 15.20 15.08 2.26 multi cap
Canara Rob Equity Tax Saver Fund 4.65 14.47 15.80 1.72 ELSS
ICICI Pru US Bluechip Equity Fund 19.62 16.01 11.56 14.71 Thematic
Kotak India EQ Contra Fund 4.33 16.62 15.17 1.71 Contra
Mirae Asset India Equity Fund 1.43 17.64 19.26 0.39 multi cap
Parag Parikh Long Term Equity Fund 2.82 14.16 17.63 4.67 multi cap
Reliance Pharma Fund 8.94 3.79 12.42 10.88 sector
Reliance US Equity Opp Fund 21.82 18.83 - 16.91 thematic
UTI Equity Fund 5.64 13.30 15.80 4.60 multi cap
UTI MNC Fund 0.88 11.60 20.15 6.48 thematic
*1-year returns are annualised, 3- and 5- year returns are CAGR
Returns data as on Feb 09, 2019
Source: Ace MF

This exercise is to only point out the outlier schemes that managed better than the peers. Equity funds are meant for long term investment. One should not take an investment decision based on one-year returns. Also, remember to invest as per your risk appetite. The list also contains sectoral and thematic funds. They are highly risky due to their concentrated investment approach. These schemes do not suit all risk profiles.

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