India’s best performing mutual funds for February 2023

1 Mar 2023 , 09:26 AM

The month of February 2023 saw markets once again under pressure amidst strong FPI selling and traders lightening positions in the market. At a macro level, rising inflation, weak Q3 results and anticipated hawkishness of central banks were some of the key challenges. In the month of February 2023, the fall was across the board. Mid cap index fell by -1.82%, the large cap Nifty-50 by -2.03% while the Small Cap index fell by -3.64%. 

The selling was predominant in metals, PSU banks and oil & gas stocks. FPI selling was not as intense as January, but they remained sellers on most of the day in February too. On the debt side, the benchmark 10-year yields, which were hovering in the range of 7.2% to 7.3%, surged sharply to 7.46% in the last week of February 2023 after fairly hawkish indications came out from the RBI and the US Fed. Here is the mutual fund show; on equity and debt.

1. Equity Large-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Canara Robeco Blue-Chip (G)	3.009%	16.548%	13.968%
Edelweiss Large Cap Fund (G)	7.139%	16.754%	12.280%
Kotak Bluechip Fund (G)	5.843%	17.513%	12.268%
Category Average	3.152%	14.840%	10.157%
BSE 100 (TR) Index	4.397%	17.406%	13.407%
Data Source: Morningstar

1. Equity Multi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	6.624%	34.992%	19.363%
Mahindra Manulife Multi (G)	3.444%	22.594%	15.040%
Nippon India Multi Cap (G)	16.132%	21.331%	12.254%
Category Average	6.452%	19.965%	12.434%
BSE 500 (TR) Index	2.919%	17.974%	10.892%
Data Source: Morningstar

1. Equity Flexi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Flexi Cap Fund (G)	9.947%	37.025%	16.802%
PPFAS Flexi Cap Fund (G)	3.323%	24.103%	16.563%
PGIM India Flexi Cap Fund (G)	-0.252%	24.266%	15.078%
Category Average	2.200%	16.181%	10.699%
BSE 500 (TR) Index	2.919%	17.974%	10.892%
Data Source: Morningstar

1. Equity Mid-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Mid-Cap Fund (G)	14.914%	35.694%	19.591%
PGIM India Mid-Cap Fund (G)	5.274%	32.250%	18.202%
MOSL Mid-Cap 30 (G)	17.997%	23.794%	16.183%
Category Average	6.455%	20.955%	11.806%
BSE Midcap (TR) Index	4.731%	19.667%	9.057%
Data Source: Morningstar

1. Equity Small-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Small Cap Fund (G)	13.896%	51.807%	23.689%
Axis Small Cap Fund (G)	7.524%	23.923%	18.760%
Kotak Small Cap Fund (G)	3.871%	30.077%	16.516%
Category Average	7.704%	27.839%	12.754%
BSE Midcap (TR) Index	3.418%	27.008%	9.571%
Data Source: Morningstar

1. Equity Linked Savings Schemes (Tax Saving)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Tax Plan (G)	7.807%	38.513%	21.016%
Canara Robeco Tax Saver (G)	2.609%	18.864%	15.045%
Mirae Asset Tax Saver (G)	3.410%	20.479%	14.567%
Category Average	3.771%	16.277%	9.874%
BSE 200 (TR) Index	2.878%	17.498%	11.302%
Data Source: Morningstar

1. Index Funds (Equity)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Nippon India Sensex Fund (G)	5.957%	16.587%	12.864%
HDFC India Sensex Fund (G)	5.932%	16.468%	12.463%
ICICI Pru Sensex Fund (G)	5.912%	16.662%	12.448%
Category Average	1.363%	15.942%	11.755%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

1. Balanced Funds (Aggressive Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Absolute Fund (G)	10.163%	30.101%	18.254%
ICICI Pru Equity & Debt (G)	8.835%	22.842%	13.945%
Baroda BNP Paribas AEH (G)	5.662%	14.450%	12.977%
Category Average	4.211%	14.564%	9.716%
CRISIL MIF Blended Index PR	3.084%	7.383%	8.160%
Data Source: Morningstar

1. Balanced Funds (Conservative Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Kotak Debt Hybrid (G)	6.059%	11.433%	9.936%
Canara Robeco Hybrid (G)	4.126%	9.036%	9.303%
ICICI Pru Regular Savings (G)	5.611%	9.114%	8.940%
Category Average	5.221%	8.240%	6.665%
CRISIL MIP Blended Index PR	3.084%	7.383%	8.160%
Data Source: Morningstar

1. Dynamic Asset Allocation Funds (BAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HDFC BAF (G)	16.057%	20.414%	12.065%
Edelweiss BAF (G)	4.310%	15.212%	11.558%
ICICI Prudential BAF (G)	7.651%	13.071%	10.307%
Category Average	4.937%	10.526%	7.951%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

1. Arbitrage Funds (Cash-Futures)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Edelweiss Equity Arbitrage (G)	5.353%	4.901%	5.741%
Nippon Arbitrage Fund (G)	5.213%	4.748%	5.686%
Invesco Arbitrage Fund (G)	6.080%	4.946%	5.629%
Category Average	4.570%	3.991%	4.920%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

1. Government Securities Funds (Gilt Funds)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
DSP G-Sec Fund (G)	3.747%	5.783%	8.732%
IDFC G-Sec Fund (G)	1.892%	5.323%	8.557%
ICICI Prudential Gilt Fund (G)	5.412%	6.505%	8.539%
Category Average	3.115%	4.801%	7.306%
I-SEC MIBEX Index TR	2.883%	5.271%	7.446%
Data Source: Morningstar

1. Corporate Bond Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HSBC Corporate Bond (G)	2.657%	5.398%	7.679%
ABSL Corporate Bond (G)	4.526%	6.453%	7.497%
ICICI Pru Corporate Bond (G)	5.422%	6.386%	7.407%
Category Average	3.422%	5.412%	6.661%
CRISIL ST Bond Fund Index PR	3.712%	5.617%	6.977%
Data Source: Morningstar

1. Credit Risk Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Credit Risk Fund (G)	5.256%	7.168%	8.154%
HDFC Credit Risk Fund (G)	4.358%	7.191%	7.836%
Baroda Credit Risk Fund (G)	5.340%	8.944%	7.651%
Category Average	12.715%	6.091%	4.554%
CRISIL ST Bond Fund Index PR	3.712%	5.617%	6.977%
Data Source: Morningstar

1. Liquid Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 28th Feb-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Liquid Plan (G)	5.383%	4.876%	5.873%
IDBI Liquid Fund (G)	5.381%	4.357%	5.560%
Mahindra Manulife Liquid (G)	5.466%	4.323%	5.417%
Category Average	4.684%	3.723%	4.828%
CRISIL Liquid Fund Index PR	5.536%	4.482%	5.532%
Data Source: Morningstar

 

Here are some key takeaways from the February mutual fund rankings.

1. Most rankings across equity and debt categories have been consistent with previous months. This makes historical returns on a rolling basis, a lot more predictive and indicative of future returns on these funds. 

    

2. The fall in the equity indices has resulted in short term returns of equity funds being impacted. However, the longer term returns over a 3-year period and 5-year periods have remained robust across categories.

    

3. Barring the large cap fund category, in all other categories, the top 3 funds have comfortably outperformed the benchmark indices, indicating at genuine alpha created by the leaders. Large cap underperformance is more due to kurtosis.

    

4. Despite the rising bond  yields and higher hawkishness shown by central banks, the bond yields have remained largely stable, except in the last few days. This has resulted in bond returns being robust in February 2023.