Twenty mutual funds that have outperformed Nifty Next 50 Index

/ M. Pattabiraman / @pattufreefincal / 1 Comment

Published: March 1, 2019 at 10:08 am

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.

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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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 money management topics. 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 based on 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 paid articles, promotions, 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)
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