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

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.

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!


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

About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of freefincal.com.  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, 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. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media

Content Policy

Freefincal has original unbiased, conflict-of-interest-free,  topical reports, reviews, commentary and analysis on all aspects of personal finance like mutual funds, stocks, insurance etc. All guest authors and contributors to the site also do not have any conflict of interest. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. No promotional content We do not accept sponsored posts and link exchange requests from content writers and agencies. This is our privacy policy Our website is non-profit in nature. The revenue from the advertisement will only be used for hosting charges, domain registration charges, specific plugins necessary for traffic growth and analytics services for search engine optimisation.

Do check out my books

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)

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. 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 *