The equity mutual funds on an average have generated good returns as compared to their benchmark indices in the ongoing calendar year 2015, said brokerage house SMC Investment and Advisors.
Mutual funds like Birla Sun Life MNC fund, SBI Magnum Midcap fund, Motilal Oswal MOST Focused Midcap Fund and Reliance Small Cap Fund gave return of 29.65 per cent, 16.94 per cent, 21.71 per cent and 13.65 per cent in the past one year till November 10, 2015. During the period, indices such as BSE Sensex and BSE Smallcap declined 7.65 per cent and 0.78 per cent at 25,743.26 and 11,047.71, respectively. On the other hand, the BSE Midcap index jumped 6.75 per cent during the same period.
The equity mutual funds on an average have generated good returns as compared to their benchmark indices in the ongoing calendar year 2015, said brokerage house SMC Investment and Advisors.
Market experts are bullish on Indian equity market in the coming months as India still seems to be best promising emerging market in current global environment and the market valuations are attractively placed now. Hence, the performance of equity mutual funds would also reflect the same.
DK Aggarwal, chairman and managing director, SMC Investments and Advisors, said, “Domestic equity markets are expected to provide best returns among all assets classes on multiyear time frame and trigger will be healthy corporate earnings growth on the back of right policy announcements, quick implementation by the government, relatively stronger currency among emerging markets, lower current account deficit, industrial growth gaining momentum resulting into higher foreign portfolios inflows and return of more domestic investors.”
However, risk to inflation, declining exports, and higher interest rates will remain a concern besides global volatility on the back of expected interest rates hike by US FED during 2015 and uncertainty in China and Euro Zone.
Saibal Ghosh, chief investment and business development officer, AEGON Religare Life Insurance, said, “In the present market scenario, one has to be overweight on the sectors and stocks that will be most benefiting from turning around of the economy. My advice would be to go overweight on demand aggregators like banks, cement and auto companies, especially commercial vehicles. However I must warn here that the market will be extremely volatile going forward till we see traction in the earnings. Therefore, one has to be careful in allocating his/her fund in equity. If one has identified the fund that he or she will not require in next 3-5 years then only that much fund should be invested in equity market. But once such fund is committed then one has to be patient through the volatility.”
With the help of some brokerage houses we have identified five mutual funds which could give you good return in the long run.
Mirae Asset India Opportunities
Recommended By: Vidya Bala, head of mutual fund research, FundsIndia.com
Why Buy: An equity diversified fund with a trait of being highly consistent across market phases. The fund has a large-cap bias with limited exposure to mid-caps. It has consistently beaten its benchmark on a rolling return basis over the past 3 and 5 years. The fund seeks to stay invested in equities across market phases, including down markets. That way it is among the first to capitalise when markets move up post a downturn. Mirae Asset India Opportunities can be called all-seasons fund as a result of its above traits. Vidya Bala, head of mutual fund research, FundsIndia.com, said,” This fund is suitable for investors whose risk appetite is not high. You may consider the fund to be one notch higher than large-cap funds in terms of its risk-return profile, and lower than other opportunity funds.”
Franklin India Bluechip
Recommended By: FundsIndia.com
Why Buy: Franklin India Bluechip is a true-blue large-cap fund; a large-cap fund that does not deviate from its mandate of being invested in large caps at all times. It is not one of those funds that is meant to deliver flashy returns; nor does it promise to generate superior returns in every bull market. The fund is suitable for any long-term portfolio, where the primary aim of the investor is to build wealth with limited volatility. First-time equity investors and investors who are building a portfolio of funds can hold this fund for limited volatility and add other marginally high beta funds to such a portfolio. Given that large-cap stocks have correctly quite a bit in 2015, a large-cap fund addition, at this stage may also deliver well.
ICICI Pru Value Discovery
Recommended By: FundsIndia.com
Why Buy: ICICI Pru Value Discovery will be a contrarian call at this stage as the funds take a value approach in investing. This fund cannot be called a true mid-cap fund but has a mid-cap bias with a value focus. As a value fund, this fund may shy away from high premium stocks especially in a rallying market. As a result, short-term underperformance is possible in up markets. However, the fund has demonstrated its ability to buy and hold contrarian stocks and generate returns over the long term. It also holds a sound record of containing declines well during volatile market phases. This fund can be part of one’s mid-cap exposure in a long – term portfolio.
SBI Magnum Midcap Fund & Tata Pure Equity Fund
Recommended By: SMC Investments and Advisors
Why Buy: On a year-to-date basis, SBI Magnum Midcap Fund gave return of 8.82 per cent till November 10. The benchmark index BSE Mid Cap index jumped 5.47 per cent during the same period. A monthly SIP of Rs 1,000 started in December 2012 (1,000 X 36) turned Rs 59,000 till November 2015.
Tata Pure Equity Fund declined marginally 0.14 per cent on a year-to-date basis till November 10. The benchmark Sensex slid 6.39 per cent during the same period. The present value of a monthly SIP of Rs 1,000 started in December 2012 is now at Rs 43,919 till November 10, 2015.
Aggarwal of SMC Investments and Advisors, said, “Both of these funds are the star performers in their respective categories. These funds have generated above average returns for their investors across all time frame while maintaining the risk ratios under control, hence one can invest in any of these funds with the longer investment horizon.”
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