Twenty mutual funds that have outperformed Nifty Next 50 Index

Published on / By M. Pattabiraman Twitter: @pattufreefincal / 1 Comment

Published: March 1, 2019 at 10:08 am

Last Updated on August 22, 2022

Here are twenty mutual funds (out of 144) that have consistently outperformed Nifty Next 50 total returns index. I did the short-listing using the same criterion followed in the freefincal equity mutual fund consistency screener. Readers may recall a List of Equity Mutual Funds with most consistent performance (Feb 2019) published with the respective category benchmarks based on this screener.

In this post, I compare ELSS, Large and mid cap, mid cap, small cap and value oriented funds with Nifty Next 50 TRI. This as we have seen before is one hard benchmark to beat as it has a concentrated mix of large and mid cap stocks (although officially considered as a large cap index). As discussed earlier: Nifty Next 50 is NOT a large cap index, it is a more mid-cap like fund.

Articles on Nifty Next 50

Twenty mutual funds that have outperformed Nifty Next 50 Index

Criterion used for short listing

We expect a fund to beat Nifty Next 50 Total Returns Index over 3,4 and 5-year periods. Since we consider every possible 3,4 and 5 year periods from Jan 2013  to Feb 2019, we expect 70% or higher outperformance.  This means, if we compare 100 index and fund returns, the fund must have beat the index at least 70% of the time.

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    Twenty mutual funds that have outperformed Nifty Next 50 Index

    CategoryFund
    EQ-ELSSQuant Tax Plan-Growth Option-Direct Plan
    EQ-L&MCMirae Asset Emerging Bluechip Fund – Direct Plan – Growth
    EQ-L&MCPrincipal Emerging Bluechip Fund – Direct Plan – Growth Option
    EQ-L&MCCanara Robeco Emerging Equities-Direct Plan-Growth Option
    EQ-MCKotak Emerging Equity Scheme – Growth – Direct
    EQ-MCHDFC Mid Cap Opportunities Fund -Direct Plan – Growth Option
    EQ-MCL&T Mid Cap Fund-Direct Plan-Growth
    EQ-MCSundaram Mid Cap Fund – Direct Plan
    EQ-MCDSP BlackRock Midcap Fund – Direct Plan – Growth
    EQ-MLCQuant High Yield Equity Plan – Growth Option-Direct Plan
    EQ-SCDSP BlackRock Small Cap Fund – Direct Plan – Growth
    EQ-SCSBI Small Cap Fund – Direct Plan – Growth
    EQ-SCHSBC Small Cap Equity Fund – Growth Direct
    EQ-SCReliance Small Cap Fund – Direct Plan Growth Plan – Growth Option
    EQ-SCFranklin India Smaller Companies Fund – Direct – Growth
    EQ-SCAditya Birla Sun Life Small Cap Fund – Growth – Direct Plan
    EQ-SCKotak Small Cap
    EQ-VALL&T India Value Fund-Direct Plan-Growth
    EQ-VALTata Equity P/E Fund -Direct Plan Growth
    EQ-VALInvesco India Contra Fund – Direct Plan – Growth

    Funds (from above 20) with poor downside protection

    If you want your actively managed fund to beat Nifty Next 50, consistent downside protection may have to be sacrificed. You cannot consistenly expect your fund to beat NN50 during months when NN50 falls (-ve return). However funds with consistently poor downside protection is a problem.

    Sundaram Mid Cap Fund – Direct Plan (read review here) has consistently les than 50% downside protection consistency.  The following funds have < 50% downside protection over 3Y.

    Invesco India Contra Fund – Direct Plan – Growth
    DSP BlackRock Midcap Fund – Direct Plan – Growth
    Kotak Small Cap

    Funds (from above 20) with 70% or more downside protection

    These ten funds (or I should say only these ten) funds have 70% + return outperformance and 70%+ downside protection wrt NN50 TRI

    EQ-L&MCMirae Asset Emerging Bluechip Fund – Direct Plan – Growth
    EQ-L&MCPrincipal Emerging Bluechip Fund – Direct Plan – Growth Option
    EQ-MCKotak Emerging Equity Scheme – Growth – Direct
    EQ-SCDSP BlackRock Small Cap Fund – Direct Plan – Growth
    EQ-SCSBI Small Cap Fund – Direct Plan – Growth
    EQ-SCHSBC Small Cap Equity Fund – Growth Direct
    EQ-SCReliance Small Cap Fund – Direct Plan Growth Plan – Growth Option
    EQ-MLCQuant High Yield Equity Plan – Growth Option-Direct Plan
    EQ-SCFranklin India Smaller Companies Fund – Direct – Growth
    EQ-ELSSQuant Tax Plan-Growth Option-Direct Plan

    Download the full data set

    Summary

    Nifty Next 50 TRI should be a benchmark for mid-cap and small cap fund investors as it is readily available as an index fund. If your mid cap or small cap fund has a poor track record wrt NN50, and you do not care about downside protection you can consider switching to NN50, If you like volatility managed better, then an aggressive hybrid fund would be a better choice: Why Aggressive Hybrid (balanced) Mutual Funds score over diversified funds

    Before you make changes, use the Freefincal Robo Advisory Software Template, create an automated plan for investing and then consider my Handpicked Mutual Funds January 2019 (PlumbLine)

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