These Eight Large and Midcap Mutual Funds are consistent outperformers

Published: September 26, 2020 at 11:11 am

These eight large and midcap mutual funds have consistently outperformed the Nifty Largemidcap 250 TRI over every possible three, four and five-year windows since 1st Jan 2013.

The analysis was carried out with 24 large and midcap mutual funds and the shortlist was done using the Equity Mutual Fund Performance Screener September 2020. Readers must not consider this as a shortlist for investing and should exercise due diligence of the history of each fund taking into account their personal requirements.

How the funds were selected: We consider every possible 3,4 and 5-year investment windows bet 1st Jan 2013 and Sep 8th 2020. We shall define a, return outperformance consistency = no of times fund beat index/tot no returns. For example, say we have a hundred 4-year return data points and a fund got a return higher than the index in 73 of those instances. Then the four-year return outperformance consistency = 73/100 = 73%.

The following eight large and midcap mutual funds had a three, four and five-year return outperformance consistently greater than 70% with respect to the Nifty Largemidcap 250 TRI. Due to SEBI regulations, scheme mandates may have changed in the recent past. This has not been factored in the calculations.

Readers may wonder why this index was used instead of the more common Nifty 200 TRI which includes 100 large cap and 100 midcap stocks. The answer lies in concentration risk due to market cap weighting. The Nifty 200 has, as per the latest factsheet, 10.52% of RIL, 7.71% of HDFC Bank and 5.43% of Infosys. Read more: Do index fund returns depend upon just a few stocks (Concentration risk)?

In contrast, the Nifty Largemidcap 250 has only 5.93%, 4.36% and 3.06% of the above stocks respectively. This is because the aggregate weight of the 100 large cap stocks and 150 midcap stocks are capped at 50% each. Over longer durations, this is a tougher benchmark to beat than the Nifty 200.

Eight Consistent Large and Midcap Mutual Funds

These are the eight funds with more than 70% return outperformance consistency.

Canara Robeco Emerging Equities
DSP  Equity Opportunities Fund
Invesco India Growth Opportunities Fund
Kotak Equity Opportunities Fund
LIC MF Large & Mid Cap Fund
Mirae Asset Emerging Bluechip Fund
Principal Emerging Bluechip Fund
Sundaram Large and Midcap Fund

We can define a downside protection consistency using the downside capture ratio. This measures how much of a benchmark’s monthly losses (if monthly return < 0) a fund captures. A downside of 80% means a fund has captured only 80% of the index losses. Read more: Do active mutual funds offer downside protection? Or is it a myth?

Downside protection consistency is defined as the number of investment periods for which the fund fell less than the index (suffered lower losses) divided by the total no of periods. This is computed for every possible 3,4 and 5-year windows.

The exact opposite metric is the upside protection consistency defined as the number of investment periods for which the fund returned more than the index (experienced greater gains) divided by the total no of periods. The nature of the fund can be revealed by inspecting both up and downside protection consistency.

Take, for example, Canara Robeco Emerging Equities. As can be seen from the below table, the fund is an upside performer (moves up more than then index) rather than a downside protector (falls lesser than the index).

FundCanara Robeco Emerging Equities
upside performance consistency (1 year)72%
downside protection consistency (1 year)56%
upside performance consistency (2 years)80%
downside protection consistency (2 years)51%
upside performance consistency (3 years)81%
downside protection consistency (3 years)47%
upside performance consistency (4 years)98%
downside protection consistency (4 years)56%
upside performance consistency (5 years)94%
downside protection consistency (5 years)48%

On the other hand, Invesco India Growth Opportunities Fund is more of a downside protector than an upside performer.

FundInvesco India Growth Opportunities Fund
upside performance consistency (1 year)41%
downside protection consistency (1 year)81%
upside performance consistency (2 years)51%
downside protection consistency (2 years)87%
upside performance consistency (3 years)39%
downside protection consistency (3 years)96%
upside performance consistency (4 years)58%
downside protection consistency (4 years)98%
upside performance consistency (5 years)67%
downside protection consistency (5 years)100%

Sometimes (for the period under consideration), funds can do neither with distinction, for example, DSP Equity Opportunities Fund. Or they can do both with distinction, for example, Mirae Asset Emerging Bluechip Fund and some funds cannot be categorized.

If use our ‘usual’ filter of more than 70% return outperformance consistency and more than 70% downside protection consistency is applied we have a surprising list!

Invesco India Growth Opportunities Fund
LIC MF Large & Mid Cap Fund
Principal Emerging Bluechip Fund
Sundaram Large and Midcap Fund

On the other hand, if we demand more than 70% return outperformance consistency and more than 70% upside performance consistency, we get these three funds.

Canara Robeco Emerging Equities
Mirae Asset Emerging Bluechip Fund
Principal Emerging Bluechip Fund

The full data is available in the screener linked above. Finally, investors should keep in mind, no matter how we screen, the list could change from month to month!


Sign up for a new course on How to get people to pay for your skills! This discusses a simple framework for consistently growing your business with online visibility! Suitable for passive income seekers, small business owners and bloggers. Use this form to sign up for 60% early bird discount! You will be intimated upon launch (1st October 2020).


Do share if you found this useful

Did you know? We have more than 900+ videos on YouTube to explore! Join our YouTube Community!

Use our Robo-advisory Excel Template for a start-to-finish financial plan!

Join our courses in exclusive Facebook Groups!

  • 500+ members are now part of our new course, How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner wanting more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills, building a community that trusts you and pays you!
  • 1822 members have signed for Goal-based portfolio management (watch 1st lecture for free). This is an online course to reduce fear, uncertainty and doubt while investing for a financial goal. Learn how to plan for your goals before and after retirement with confidence.

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!) or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners on a monthly basis
About the Author Pattabiraman editor freefincalM. 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 Twitter or 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, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements write to pattu [at] freefincal [dot] com
About freefincal & its 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. Follow us on Google News 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 investingPublished by CNBC TV18, this 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 Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis 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

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new 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 Rs 199 (instant download)
Free android apps