List of funds that have outperformed Nifty 200 & Nifty Midcap 150 Total Return Indices

Last Updated on December 29, 2021 at 11:56 am

Here is a list of mutual funds that have outperformed Nifty 200 & Nifty Midcap 150 Total Return Indices as on October 2018. The data is sourced from the October 2018 Equity Mutual Fund Performance Screener. The Nifty 200 is a common benchmark in the ELSS, large and midcap, and multi-cap categories. Nifty 200 consists of all the stocks in NIFTY 100 and NIFTY Full Midcap 100. The Nifty Midcap 150 has 150 stocks that have lower market capitalization than the Nifty 100  (top 100). The total returns indices (dividends are treated as reinvested) as used for comparison. Let us find out how easy or hard these indices are to beat.

We define the demand the following as “outperformance”. For every 3,4,5 year period considered between Jan 1st 2013 to Oct 15th 2018, the fund should have beat the benchmark index at least 70% of the time. For example, if there are 1000 3-year durations considered, the fund should have had a higher return for at least 700 durations.

In addition to the above reward-outperformance, we shall define a risk-outperformance. For each of those 3, 4,5 year periods, the fund should have registered a loss that is lower than the benchmarks at least 70% of the time. In other words, if over a single 3Y period, the benchmark registered a loss of say 20%, the fund should have registered a loss less than 20%. This is known as downside protection. The fund should have exhibited such downside protection at least 70% of the 3,4,5 year durations considered.

While the return outperformance is measured point to point (start date to end date), the risk outperformance is measured monthly between the start and end dates. This is because returns are in hindsight and risk is in real-time.

List of funds that have outperformed Nifty 200 TRI

A total of 86 funds were considered from the ELSS, Large and Midcap and Multicap categories. Only 40 out of those 86 came out as “performers” as defined above! This is quite poor as the chances of your fund beating Nifty 200 essential becomes a coin-toss: Heads you lose, tails you lose. We earlier saw that the situation is similar with Nifty 100: Will large cap mutual funds struggle to beat Nifty 100 Equal Weight Index?

Thus, it is time to move to index funds (stay away from ETFs). At least young investors with small portfolios should seriously consider this. Ravikiran Suryanarayana suggested a portfolio of 50% Nifty 50 and 50% nifty next 50 as a Nifty 100 or Nifty 200 index fund is not available. I will backtest this 50:50 portfolio rigorously in the next post.

• 17 out of 28 ELSS funds were performers
• 8 out of Large and Midcap funds were performers
• 15 out of 39 multicap funds were performers.

Here is the full list of outperformers

Here is the list of non-performers wrt Nifty 200 TRI

List of outperformers wrt Nifty Midcap 150 TRI

• Only two out of 18 midcap funds tested were outperformers. This reiterates what we found earlier: Why we badly need a Midcap & Smallcap Index Fund :Performance Comparison with Nifty Midcap 100 & Nifty Next 50
• 8 out of 10 smallcap funds were outperformers (perhaps because I used a midcap index!)
• overall 10 out of 18 funds were outperformers.

List of non-performers wrt Nifty Midcap 150 TRI

Summary

It is now becoming increasingly clear that active mutual funds (remember only direct plans were tested. If they were regular, it would be even worse) are finding it difficult to beat even broad market indices and indexing is the way forward. However, as of now, practical options are index funds based on Nifty 50 or Sensex, Nifty 50 equal weight, Nifty 100 Equal-weight.

If you are worried about the N100 Equal weight index funds from Sundaram and Principal as they have low AUM, a mix of Nifty 50 and Nifty Next 50 as per your risk appetite and goal requirements will keep volatility at with low costs. Else you can use aggressive hybrid funds or dynamic asset allocation funds where the fund manager fee is a lot more justified.

If you are interested you can explore the

• List of Index Mutual Funds and ETFs in India: What to choose and what to avoid
• Watch my talk on index investing: Can we get higher returns with lower risk?

Download the  October 2018 Equity Mutual Fund Performance Screener.