Last Updated on December 29, 2021 at 12:06 pm
Here are 5 large cap funds that have beat the Nifty 100 Total Returns Index. Rather, only 5 out of 36 large cap funds studied in the Dec 2018 freefincal equity fund screener have managed to beat Nifty 100 consistently over 3, 4, 5 years in terms of risk and reward. I am quite surprised more than half the active large cap funds have difficulty in offering consistent downside protection!
Screening steps
- Download the screener from the above link
- Select category as “large cap”
- For this study, I have removed all Sensex and Nifty based index funds as the comparison is with Nifty 100 and it would not be fair. I have retained 2 Nifty Next 50 Index funds (you don’t have to do this). This leaves us with 36 funds or 34 active funds.
- Demand: a downside protection consistency score of greater than or equal to 90% with regard to the Nifty 100 Total Returns Index. So here we compare the monthly returns of the fund with the index over every possible 5Y. The fund should have fallen less than the index when the index monthly return was negative with a consistency of 70% or more. See the screener download post for a technical definition.
- If we apply this downside filer for 5Y, the number drops from 36 to 20!
- Apply the same downside filter for 4Y (in addition to 5Y), the number drops from 20 to 15.
- Apply the same downside filter for 3Y (in addition to 5Y and 4Y), the number drops from 15 to 14.
- This is a bit surprising that less than half the no of funds studied is able to deliver consistent downside protection!!!
- With these filter on, ask how many funds have a rolling return outperformance score of greater than or equal to 70% with regard to the Nifty 100 Total returns index. This means that suppose we compute the return over 3Y in 700 different periods, the fund (direct plan) should have beat the index at least 490 times or more.
- Apply the rolling return filter over 5Y then the 14 funds drop to 6!!!
- Apply the rolling returns filter over 4Y and 5Y, the number remains at 6.
- Apply over 3Y,4Y and 5Y, we finally get 5 funds!!
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Want to create a complete financial plan? Learn goal-based investing? Exclusive access to our DIY tools? Increase your income with your skills? Enjoy massive discounts on our robo-advisory tool & courses! 🔥
Five Large Cap funds that have comfortably beat Nifty 100 TRI
| ICICI Prudential Bluechip Fund – Direct Plan – Growth |
| Reliance Large Cap Fund – Direct Plan Growth Plan – Growth Option |
| SBI BLUE CHIP FUND-DIRECT PLAN -GROWTH |
| Edelweiss Large Cap Fund – Direct Plan-Growth option |
| Motilal Oswal Focused 25 Fund – Direct Plan |
- These 5 funds have beat Nifty 100 TRI at least 70% of 634 to 720 3Y returns studied with at least 70% downside protection consistency
- These 5 funds have beat Nifty 100 TRI at least 70% of 388 to 478 4Y returns studied with at least 70% downside protection consistency
- These 5 funds have beat Nifty 100 TRI at least 70% of 146 to 246 5Y returns studied with at least 70% downside protection consistency
If we ignore downside protection
Suppose we ignore the downside protection filer and only require rolling return outperformance consistency of 70% or above over:
- 5Y. We get 20 funds
- 4Y and 5Y, we still get 20 funds
- 3Y, 4Y and 5Y, we get 17 funds. Not bad, but two of then are Nifty next 50 index funds. So only 15 of the 34 active large cap funds qualify. Again less than half!
| HDFC Top 100 Fund -Direct Plan – Growth Option |
| Aditya Birla Sun Life Focused Equity Fund – Growth – Direct Plan |
| Aditya Birla Sun Life Frontline Equity Fund – Growth – Direct Plan |
| Axis Bluechip Fund – Direct Plan – Growth |
| Axis Focused 25 Fund – Direct Plan – Growth Option |
| ICICI Prudential Bluechip Fund – Direct Plan – Growth |
| ICICI Prudential Nifty Next 50 Index Fund – Direct Plan – Growth |
| IDBI Nifty Junior Index Fund Growth Direct |
| Indiabulls Bluechip |
| Invesco India Largecap Fund – Direct Plan – Growth |
| Kotak Bluechip Fund – Growth – Direct |
| Reliance Large Cap Fund – Direct Plan Growth Plan – Growth Option |
| SBI BLUE CHIP FUND-DIRECT PLAN -GROWTH |
| JM Core 11 Fund (Direct) – Growth Option |
| Canara Robeco Bluechip Equity Fund – Direct Plan – Growth |
| Edelweiss Large Cap Fund – Direct Plan-Growth option |
| Motilal Oswal Focused 25 Fund – Direct Plan |
Summary
I am surprised that only 14 out of 34 active large cap funds have managed to provide downside protection with respect to Nifty 100 TRI. Forget about beating the index, downside protection is the bare minimum a fund manager should do! If you do want to shift from large cap funds to 50% nifty 50 + 50% nifty next 50, I think it is time to consider aggressive hybrid or balanced advantage funds or combine active funds with nifty next 50. At least they provide pretty much guaranteed downside protection (wrt Nifty 100). Readers must keep in mind that even if you assume downside protection is not necessary, the results are promising enough. Only 50% beat the index consistently and this does not bode well for the future.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: To get in touch, use this contact form. (Sponsored posts or paid collaborations will not be entertained.)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)