India’s best performing mutual funds for January 2022

For the month of January 2022, Nifty and Mid-Cap Nifty closed flat with marginal losses of -0.1% and -0.2% respectively. However, these monthly returns may not be indicative of the larger pain that specific sectors like IT and FMCG went through in the month of Jan-22. The lower operating margins continued to be an overhang on  most sectors.

For the month of Jan-22, FPIs sold heavily to the tune of Rs33,304cr as the spectre of rising Fed rates spooked global investors. Apart from a rush to safety, most FPIs have been sceptical about Indian markets due to a combination of rich valuations and relatively cheaper Asian markets. High inflation has also been a headwind.

The 10-year benchmark bond yields spiked by almost 30 bps during Jan-22 to scale 6.8%, before settling lower. However, with the US Fed embarking on an aggressive time table of 4-5 rate hikes, fiscal deficit likely to remain high and oil prices on the rise; bond yields are likely to remain on the higher side. That has hit debt fund returns in Jan-22.

1. Equity Large-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 31st Jan-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Axis Blue-Chip Fund (G)	19.316%	18.793%	17.805%
Canara Robeco Blue-Chip (G)	23.147%	21.183%	17.059%
Mirae Asset Large Cap (G)	24.499%	18.006%	15.613%
Data Source: Morningstar

2. Equity Multi-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 31st Jan-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	54.979%	34.512%	24.804%
Sundaram Multi-Cap Fund (G)	44.478%	21.486%	16.764%
Baroda Multi Cap (G)	44.683%	23.476%	15.685%
Data Source: Morningstar

3. Equity Mid-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 31st Jan-22):

In Jan-22 equity fund returns were negatively impacted across large caps and mid-caps. While the overall indices may have closed flat in Jan-22, the FPI selling at Rs33,304cr was focused on the most liquid stocks. This impacted 1-year returns of most equity oriented funds in Jan-22.

The tapering of debt fund returns continued especially on longer duration funds. However, liquid funds and floaters did better. The key triggers for bond funds in the coming months will be the completion of Fed taper, rate hike timetable, WPI inflation, RBI Policy and the Fed outlook on balance sheet trimming. At a macro level, oil and fiscal deficit numbers will also hold the key.