February 25, 2024
Funds

Top performing mutual funds of 2023 across market capitalisation: Large, mid and small cap


Any wealth manager worth their salt would tell you that the large cap funds are the safest investment followed by mid-cap, and the small caps are among the most volatile, offering unpredictable returns.

But when it comes to returns, small and mid-cap can outpace their larger peers, although for a short duration. In the year 2023, something similar took place.

While large cap funds, on an average, delivered an annual return of 16.15 percent. Mid cap funds delivered a return of 30.77 percent, and small caps gave the maximum average return of 34.29 per cent.

It is vital to note that the large cap funds, despite offering muted returns, have drawn the maximum investment with total AUMs (assets under management) amounting to 2,76,639 crore. And the smallest asset size amounting to 2,20,176 crore belongs to small cap mutual funds (shows the table below).

Mutual funds Schemes        No. of schemes AUM ( crore) 
Large                                 30 2,76,639
Mid                              29 2,64,277
Small                           26 2,20,176

(Source: AMFI, data as on Nov 30, 2023)

We further examine the data to sort out the top performing five mutual funds in each of the three categories across market capitalisation: large cap, mid cap and small caps.

Large cap mutual funds

Large cap mutual funds refer to the mutual fund schemes which invest a minimum of 80 percent of their AUMs in large cap stocks. The large cap stocks are the stocks of top 100 companies, ranked according to their market capitalisation.

The average one-year return given by large cap mutual funds stood at 16.15 percent as on December 21, 2023, reveals the MorningStar data.

Top performing large cap funds         Return (%)
Nippon India Large Cap Fund                         28.85
Bank of India Bluechip Fund                         27.05
HDFC Top 100 Fund                                      26.61
JM Large Cap Fund                                   26.16
Invesco India Largecap Fund                    24.45

(Source: AMFI; data as on Dec 21, 2023)

Mid Cap mutual funds

Mid cap mutual funds refer to the schemes which invest a minimum of 65 percent of their AUMs in large cap stocks. The mid cap stocks are the stocks of companies which are ranked between 101 to 250, as per market capitalisation.

The average one-year return for mid cap mutual funds stood at 30.77 percent, the MorningStar data shows.

Top performing Mid cap funds           Return (%)
Nippon India Growth Fund                         42.93
JM Midcap Fund                                        42.88
Mahindra Manulife Mid Cap Fund                41.31
HDFC Mid-Cap Opportunities Fund            41.11
WhiteOak Capital Mid Cap Fund                   38.53

Small Cap mutual funds

Small cap mutual funds refer to the schemes, which invest a minimum of 65 percent of their AUMs in small cap stocks. And the small cap stocks refer to the scrips of companies ranked lower than the top 250 companies, according to their market capitalisation.

The average one-year return for small cap mutual funds stood at 34.29 percent, the MorningStar data shows.

Top performing small cap funds                                    Return (%)
Mahindra Manulife Small Cap Fund                    53.22
Bandhan Small Cap Fund                                            49.48
Franklin India Smaller Companies Fund                    49.44
ITI Small Cap Fund                                                    48.54
Quant Small Cap Fund                                         44.90

Investing in a fund is essentially a function of an investor’s long term financial goals. An investor should opt for it only if that investment aligns with those goals and falls within the broader contours of asset allocation.

For example, when an investor ‘X’ is expected to have an exposure of 30 percent to equity and he has already invested 34 percent of his portfolio in different equity schemes, then it is not advisable to invest any more money only because one particular scheme is offering high return.

So, we can state that the high returns offered by a scheme is certainly a key determinant for choosing it, but it should not be the only criterion.

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