18 mutual funds with better than index return & lower than index risk!

Published: March 5, 2019 at 10:20 am

Last Updated on

Here are 18 mutual funds with better than index return & lower than index risk over the last 1,2,3,4 and 5 years! I have calculated this with trailing returns and trailing standard deviation (a measure of volatility) using the freefincal equity mutual fund consistency screener. This is an alternative way of short-listing mutual funds. However, it may not be as rigorous as this shortlist made with rolling returns and downside protection: List of Equity Mutual Funds with most consistent performance (Feb 2019).

How the list was prepared

  1. Compute fund return and index return over the last 1,2,3,4 and 5 years
  2. Compute fund and index standard deviation over the last 1,2,3,4 and 5 years
  3. Find fund return minus index return over each of these periods
  4. Fund fund standard deviation minus index standard deviation over each of these periods
  5. Plot (fund return minus index return) in the vertical axis versus (fund standard deviation minus index standard deviation) in the vertical axis
  6. This will provide four sections as shown below and we shortlist funds that fall in the upper left quadrant (yellow text) to choose funds with lower than index risk and higher than index returns over 1,2,3,4 and 5 years

mutual fund risk vs reward map

Relative Risk vs Reward of Mutual Funds: three years

We consider 268 equity mutual funds. To get a full list of the funds and the benchmarks used, consult the freefincal equity mutual fund consistency screener.

Relative Risk vs Reward of Mutual Funds: three years

We shortlist funds within the white rectangle over 1,2,3,4 and 5 years.

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

Relative Risk vs Reward of Mutual Funds: five years

Relative Risk vs Reward of Mutual Funds: five years

List of 18 mutual funds with better than index return & lower than index risk!

So these are funds that were always found in the upper left quadrant.Notice the prominent absence of large cap funds and thinly populated other categories! Only Small cap funds are well represented perhaps because it is easy to stay less volatile than the index and that alone can beat the index during downturns.

List of 18 mutual funds with better than index return & lower than index risk!

 

CategoryBenchmarkFund
EQ-ELSSNifty Largemidcap 250 TRIInvesco India Tax
EQ-L&MCNifty Largemidcap 250 TRIInvesco India  Opportunities Fund
EQ-MCNiftyMidcap150TRIAxis Midcap Fund
EQ-MCNiftyMidcap150TRIInvesco India Midcap Fund
EQ-MLCNifty Largemidcap 250 TRIKotak Standard Multicap Fund
EQ-MLCNifty Largemidcap 250 TRIMirae Asset India Equity Fund
EQ-S INFRANSE Infra TRIFranklin Build India Fund
EQ-S INFRANSE Infra TRILIC MF Infrastructure Fund
EQ-S INFRANSE Infra TRITaurus Infrastructure Fund
EQ-SCNiftySmallCap50-TRIAditya Birla Sun Life Small Cap Fund
EQ-SCNiftySmallCap50-TRIDSP BlackRock Small Cap Fund
EQ-SCNiftySmallCap50-TRIFranklin India Smaller Companies Fund
EQ-SCNiftySmallCap50-TRIHSBC Small Cap Equity Fund
EQ-SCNiftySmallCap50-TRIICICI Prudential Smallcap Fund
EQ-SCNiftySmallCap50-TRIKotak Small Cap
EQ-SCNiftySmallCap50-TRIReliance Small Cap Fund
EQ-SCNiftySmallCap50-TRISBI Small Cap Fund
EQ-SCNiftySmallCap50-TRISundaram Small Cap Fund

How to use this information

This is yet another way to shortlist mutual funds – another blind man touching the elephant. They are certainly good funds. Are they consistently good funds? To answer this, I will find a way to including rolling returns and risk study into this. The shortlist should be used only if you understand how it was calculated and how it differs from downside protection. For the moment, the non-small cap funds in this list can look at more closely by readers. Let me know your thoughts on this method -which is well known by analysts, you can get this information for each fund at Morningstar India. From the next edition of the freefincal screener, the full data will be available each month.

Do share if you found this useful
Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Linkedin
Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & Content Policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site.
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications


You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingMy first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.  It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantGamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)  

Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

1 Comment

  1. How does it differ from downside protection?

    Other than that the downside protection only looks at the instances of a negative return in the benchmark index?

Leave a Reply

Your email address will not be published. Required fields are marked *