Top 10 Mutual Fund Companies – A golden rule of investing in stocks is to refresh your portfolio at regular intervals. Once every 12 months or so, you should compare and contrast the recent performance of the various stocks and mutual fund units in your portfolio, eliminating chronic underperformers and accounting gains on high performers. It will ensure that your portfolio remains relevant and does not lag behind changes in the broader market.
The end of each calendar year is the perfect time to tweak your portfolio and prepare it for the new money-making opportunities that will emerge in the coming year.
Top 10 Mutual Fund Companies
This is especially true for New Year’s Eve 2022. The Indian equity market is turning around after an unprecedented rally in the last year and a half. The recent drop in stock prices across all sectors also means little to no potential loss if you choose to sell a portion of your portfolio and move some of this money into other stocks or funds.
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The recent decline in the broader market means that most stocks and equity mutual funds are much cheaper than they were a few months ago.
The benchmark BSE Sensex index is currently trading at a price-to-earnings multiple of around 27X, down 10 per cent from nearly 30X at the end of October this year.
And if you follow the old rule of thumb of investing, buying at a lower valuation maximizes long-term returns, and vice versa.
While we’re not sure about individual stocks, here are the top diversified mutual funds that have the potential to shine in the New Year. These new mutual funds have been shortlisted based on the fund’s score on a number of parameters, including short-term and long-term performance, volatility of returns, overall portfolio valuation, portfolio concentration, and what More importantly, the fund’s expense ratio.
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The funds that topped our list have not only been consistent performers over the past five years, but have also had the lowest volatility and a high degree of portfolio diversification.
His portfolio is still relatively cheap for new investors. And to top it off, all of these funds have some of the lowest expense ratios or management fees in the industry, meaning investors make the lion’s share of profits in their fund.
Most of these funds also have fairly large assets under management (AUM) that ensure consistency in performance and few negative impacts if one of the stocks in the portfolio crashes.
The analysis is based on the latest monthly mutual fund data on all index and diversified equity funds from ICRA Analytics MutualFundIndia.com. Here are the mutual funds that topped our charts:
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1. HDFC Index Fund – Plan Sensex – At the top is the HDFC Index Fund of mutual funds which tracks the BSE Sensex. The HDFC Sensex index fund has given annualized returns of 17.6 percent over the past five years and 17.8 percent over the past three years. This may seem like a lag compared to the 20-plus percent returns that high-yield actively managed diversified mutual funds provide, but a good chunk of the additional returns from active funds are eaten up by their higher expense ratio. Net of the expense ratio, index funds could prove to be winners in the long run.
2. UTI Nifty Index Fund. The UTI mutual fund index fund based on the Nifty50 index ranks second with 5-year CAGR returns of 17.2 percent and one of the lowest expense ratios in the industry of 0.3 percent. One of the biggest benefits of index funds like the UTI Nifty plan is that you no longer have to worry about the quality and competence of the fund manager and it frees you from the burden of shaking your portfolio every year.
3. Nippon India Small Cap Fund ranks third with a 5-year CAGR of 23.7% and a 3-year CAGR of 29.1%. It also shines with an expense ratio of 1.8 percent, which is among the lowest in its peer group. Its valuation is also quite reasonable with a P/E multiple of 47.44X at the end of November 21.
4. DSP Small Cap Fund ranks fourth on our list with CAGR returns of 28.4 percent over the last 3 years. Its portfolio is also among the cheapest in the industry with a P/E multiple of 33.6X.
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5. Parag Parikh Flexi Cap Fund ranks fifth with a 5-year CAGR of 23 percent and a 3-year CAGR of nearly 30 percent. The fund also scores highly on valuation with a P/E of just 34.7X and an expense ratio of 1.8 percent, making it an all-rounder.
6. Mirae Asset Emerging Bluechip Fund is another consistent performer and ranks sixth on the best funds list. It has delivered a category-leading CAGR of 22.3 percent and 25 percent return over the past 5 and 3 years, respectively. The fund also scores highly for its relatively low expense ratio and high risk-adjusted return (Sharpe ratio).
7. Kotak Emerging Equity Fund is seventh on our list with a 5-year CAGR of 19.6% and a 3-year CAGR of 25.4%. The fund also scores well in terms of risk-adjusted returns and expenses.
8. SBI Small Cap Fund is in 8th place with 5-year CAGR returns of 24.1 percent and 3-year CAGR returns of 28 percent. The fund has one of the best Sortino indices in the industry, which means a high degree of downside protection. It’s precious in the current market environment. The fund also scores highly on the expense ratio, but loses a bit on the valuation front with a P/E of nearly 59X.
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9. SBI Focussed Equity Fund ranks 9th on our list with a 5-year CAGR of 20.4% and a 3-year CAGR of 24.2%. The fund also scores highly for the low volatility of its returns and relatively low expense ratio. However, it loses some points for having some of the most expensive portfolios in the industry with a P/E of 75.6X.
10. Axis Midcap Fund ranks 10th on our list with a 5-year CAGR of 23.3% and a 3-year CAGR of 25.9%, respectively. It’s another all-rounder with a competitive expense ratio and one of the best Sharpe and Sortino ratios among diversified mutual funds.
As usual, don’t limit yourself to the top-ranked funds, but spread your money across 5-6 funds to reap the benefits of diversification.
(Tip: This article is for informational purposes only. Readers are advised to consult a certified financial advisor before investing in any of the funds or securities listed above.) Register Now: Join us for the AWS TRANSFORMING A BILLION LIVES Webinar on Wednesday, April 25, 2023 | 15:00 onwards.
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The 10 Most Popular Small-Cap Stocks Held by Mutual FundsThese 10 Stocks Hold Up Across All Stock Fund Categories
After putting up a tepid show in 2018 and 2019, small-cap stocks made a strong comeback. Over the last 15 months, the Nifty Smallcap 100 – TRI gained 207 percent and outperformed all other benchmarks by huge margins. Even other categories of equity funds accumulated small-cap stocks (within their prescribed limits). Here we list the most popular small-cap stocks across categories of open-ended stock-oriented mutual funds (651 schemes). Data as of July 31, 2021. Market capitalization is defined by AMFI.
There were 66 equity-oriented schemes that held UTI AMC shares. The schemes that recently added these stocks to their portfolio during the month of July were: HDFC Banking & Financial Services, IDFC Large Cap, Sundaram Small Cap, Tata Flexi Cap, L&T Large and Midcap and L&T Tax Advt Fund.
There were 66 equity-oriented schemes that held shares of PNC Infratech. The schemes that recently added these stocks to their portfolio during the month of July were: Invesco India Dynamic Equity, Edelweiss Small Cap, HSBC Small Cap Equity, HSBC Large & Mid Cap Equity and ICICI Pru Flexicap.
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There were 63 equity-oriented schemes that held shares in KNR Constructions. ICICI Pru Flexicap recently added this stock to its portfolio during the month of July. Other schemes that increased equity exposure were: Canara Rob Small Cap, BOI AXA Small Cap, SBI Small Cap, L&T India Value and Union Value Discovery.
There were 60 equity oriented plans that held shares of the Multi Commodity Exchange Of India. The schemes that recently added these stocks to their portfolio during the month of July were: PGIM India Hybrid Equity, PGIM India Small Cap, Aditya Birla SL Multi-Cap and PGIM India Equity Savings. Principal Small Cap and HSBC Small Cap Equity added to this stock significantly during the month.
There were 60 equity-oriented schemes that held shares in Brigade Enterprises. Schemes that recently added this stock to their portfolio during the month of July were: BOI AXA Flexi Cap, Tata Multi Asset Opp and ICICI Pru Large & Mid Cap. Axis Flexi Cap and Aditya Birla SL Multi-Cap added to this stock significantly over the month.
There were 57 equity oriented schemes that held shares of JB Chemicals & Pharmaceuticals. The schemes that recently added these stocks to their portfolio during the month of July were: L&T Large and Midcap, L&T Tax Advt, PGIM India Midcap Opp, and Axis Quant. Mirae Asset Healthcare added this
