India’s top performing mutual fund schemes in November 2023

1 Dec 2023 , 09:20 AM

How equity markets panned out in November 2023

After a volatile October 2023, November 2023 was a month of market revival. FPIs were back in the buying ring with net buying of Rs9,001 crore in November. However, this was entirely driven by IPO inflows. Debt inflows surge in November with overall FPI flows in November at more than Rs23,000 crore. However, November 2023 was about macros. Inflation in the US and India was lower than expected while growth was sharply better than anticipated. For the month of November 2023, the Nifty 50 closed +5.52% lower, Nifty Next-50 index closed +9.09% lower, the Mid-Cap 100 closed +10.37% higher while the Small Cap 100 index closed with +12.03% losses. There was little impact of global headwinds on the market as the thrust came entirely from domestic data. Macro growth is back and inflation is under control and that is putting the Indian economy in a Goldilocks Moment. That is reflected a sharp spike in equity fund NAVs across the board in November 2023.

How benchmark bond yields turned out in November 2023

Bond markets saw high volatility in the month of November 2023, but the bond yields on the 10 year benchmark stayed below the 7.3% mark. During the month, the bond yields did spike to above 7.35%, but that toned down after the US bond yields fell sharply from the 5% levels to around 4.25% towards the close of trade in the month of November 2023. In addition, the consistent fall in the US dollar index (DXY) also reduced the pressure on Indian bonds markets as the dollar index (DXY) fell from 107 levels to around the 103 levels. That has also reduced the pressure on the Indian rupee. US PCE inflation has come in lower at 3% while the second estimate of US Q3 GDP has been further upgraded by 30 bps from 4.9% to 5.2%. Back home, the GDP growth for Q2 came in sharply higher than street expectations at 7.6%, led by manufacturing, mining, and construction. India consumer inflation has also fallen sharply in the last 3 months and is just about 87 bps from the RBI inflation target of 4%. Let us now turn to the November 2023 mutual fund performance; across the gamut of equity and debt funds. We also benchmark to peer group and to the index.

1. Equity Large-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Canara Robeco Blue-Chip (G)	11.592%	17.137%	16.977%
Baroda BNP Paribas Large (G)	12.536%	17.969%	16.421%
Nippon India Large Cap (G)	19.289%	26.216%	16.398%
Category Average	12.041%	17.365%	14.050%
BSE 100 (TR) Index	10.097%	18.241%	14.767%
Data Source: Morningstar

1. Equity Multi-Cap Funds

Top performing Direct Plans% (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	14.959%	32.318%	25.806%
Mahindra Manulife Multi (G)	26.006%	29.917%	23.331%
Baroda BNP Multi Cap (G)	21.931%	24.987%	19.394%
Category Average	22.784%	26.371%	19.370%
BSE 500 (TR) Index	13.443%	20.271%	16.013%
Data Source: Morningstar

1. Equity Flexi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Flexi Cap Fund (G)	17.191%	33.703%	25.530%
PPFAS Flexi Cap Fund (G)	28.080%	23.622%	22.731%
JM Flexi Cap Fund (G)	29.843%	27.135%	20.523%
Category Average	17.485%	19.990%	15.926%
BSE 500 (TR) Index	13.443%	20.271%	16.013%
Data Source: Morningstar

1. Equity Mid-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Mid-Cap Fund (G)	29.033%	38.542%	27.556%
PGIM India Mid-Cap Fund (G)	14.337%	27.989%	25.685%
MOSL Midcap Growth (G)	31.510%	35.751%	24.995%
Category Average	28.144%	27.012%	20.593%
BSE Midcap (TR) Index	33.538%	27.999%	19.245%
Data Source: Morningstar

1. Equity Small-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Small Cap Fund (G)	39.585%	46.714%	32.167%
Nippon Small Cap Fund (G)	39.582%	42.329%	28.249%
Axis Small Cap Fund (G)	29.855%	32.286%	27.815%
Category Average	33.218%	34.670%	24.434%
BSE Midcap (TR) Index	37.962%	34.874%	23.992%
Data Source: Morningstar

1. Equity Linked Savings Schemes (Tax Saving)     

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Tax Plan (G)	17.058%	35.732%	28.360%
BOI Tax Advantage (G)	23.421%	24.161%	22.733%
Bandhan Tax Saving ELSS (G)	19.569%	28.068%	19.437%
Category Average	16.971%	20.488%	15.899%
BSE 200 (TR) Index	11.214%	19.135%	15.490%
Data Source: Morningstar

1. Index Funds (Equity)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
DSP Nifty-50 Equal Weight (G)	16.981%	23.497%	16.338%
Bandhan Nifty 50 Fund (G)	8.297%	16.922%	14.298%
Nippon India S&P BSE (G)	7.405%	16.043%	14.161%
Category Average	16.752%	17.921%	13.634%
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 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Absolute Fund (G)	6.780%	25.907%	21.987%
BOI S&M Equity and Debt (G)	30.653%	26.992%	20.252%
ICICI Pru Equity & Debt (G)	19.714%	28.439%	19.037%
Category Average	13.649%	17.014%	13.821%
CRISIL MIF Blended Index PR	7.475%	6.420%	8.795%
Data Source: Morningstar

1. Balanced Funds (Conservative Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Kotak Debt Hybrid (G)	11.511%	11.699%	12.181%
SBI Conservative Hybrid (G)	10.138%	11.034%	10.855%
HDFC Hybrid Debt Fund (G)	10.993%	11.606%	10.237%
Category Average	8.287%	8.795%	8.164%
CRISIL MIF Blended Index PR	7.475%	6.420%	8.795%
Data Source: Morningstar

1. Dynamic Asset Allocation Funds (BAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HDFC BAF (G)	22.789%	26.673%	17.583%
Baroda BNP Paribas BAF (G)	14.117%	13.992%	15.423%
Edelweiss BAF (G)	11.930%	14.463%	14.205%
Category Average	12.417%	12.302%	11.136%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

1. Multi-Asset Allocation Funds (MAAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Multi-Asset Fund (G)	15.881%	29.819%	24.161%
ICICI Pru Multi-Asset Fund (G)	20.149%	27.515%	18.598%
HDFC Multi-Asset Fund (G)	13.573%	16.177%	14.567%
Category Average	15.784%	16.520%	14.270%
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 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Edelweiss Equity Arbitrage (G)	7.997%	5.781%	5.890%
Invesco Arbitrage Fund (G)	8.166%	5.9352%	5.833%
Nippon Arbitrage Fund (G)	7.784%	5.687%	5.779%
Category Average	7.335%	5.035%	5.122%
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 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Gilt Fund (G)	8.340%	5.729%	8.501%
SBI Magnum Gilt Fund (G)	7.501%	5.210%	8.492%
DSP G-Sec Fund (G)	6.447%	4.501%	8.280%
Category Average	6.239%	3.923%	7.124%
I-SEC MIBEX Index TR	6.832%	4.314%	7.353%
Data Source: Morningstar

1. Corporate Bond Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HSBC Corporate Bond (G)	6.423%	4.375%	7.911%
ICICI Corporate Bond (G)	7.543%	5.581%	7.604%
UTI MF Corporate Bond (G)	6.835%	4.724%	7.590%
Category Average	6.639%	4.516%	6.752%
CRISIL ST Bond Fund Index PR	7.126%	4.917%	7.064%
Data Source: Morningstar

1. Credit Risk Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Credit Risk Fund (G)	7.701%	6.808%	8.240%
HDFC Credit Risk Fund (G)	7.087%	6.396%	7.960%
Baroda Credit Risk Fund (G)	7.877%	11.078%	7.855%
Category Average	8.012%	9.507%	5.169%
CRISIL ST Bond Fund Index PR	7.126%	4.917%	7.064%
Data Source: Morningstar

1. Liquid Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 30th Nov-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Liquid Plan (G)	6.906%	5.342%	5.808%
Mahindra Manulife Liquid (G)	7.111%	5.062%	5.358%
Edelweiss Liquid Fund (G)	7.058%	5.035%	5.334%
Category Average	6.136%	4.322%	4.820%
CRISIL Liquid Fund Index PR	7.084%	5.146%	5.457%
Data Source: Morningstar

Here are some key takeaways from the November 2023 mutual fund rankings.

1. Equity funds across the board saw their one-year returns get a sharp leg up on the back of a sharp uptick in performance in November. However, the uptick was much bigger in the small cap funds, mid-cap funds and also the multi-cap funds. The impact on 3 year returns and 5-year returns may have been limited, but it has been accretive in the month of November. On an average, the equity funds are now outperforming the indices by a rather huge margin on a longer term basis.

    

2. The leaders, or the top 3 performers, across most of the categories of funds have done better than the benchmark, which is a signal that the top performers are also generating alpha in terms of excess returns over the index returns. The outperformance over the index is a lot more relevant to the active equity funds and the outperformance has been quite pronounced in the case of small cap and mid cap funds. However, in the case of several debt funds, the mean returns of various debt fund categories have performed below the benchmark returns. That hints at a large number of individual funds underperforming the index on an overall basis. These variations do exist in equity funds too, but they are few and far between.

    

3. Debt fund returns have been largely stable over the last few months, especially in terms of short term returns. However, the volatility in bond prices and bond yields in response to global cues has put some pressure on the performance of longer term bond fund classes. There are risks in the form of rising US bond yields and rising dollar index, but the direction of yields in India are a function of RBI reaction to inflation and bond market liquidity. For now, the RBI looks unlikely to change its stance on rates, considering that the Indian economy is already enjoying the Goldilocks effect of higher than expected growth and lower than expected inflation.

    

4. A key find from the above analysis of mutual fund returns across equity and debt categories; is the consistency of the top performers over the last 5 years. The winners across the various categories have been consistent, on a rolling basis, and that is good news for investors looking at past returns as a basis to select funds for the long term. There could be occasional shifts, but the moves are not too material. That is also proof of the fact that; past returns in most mutual fund categories are a reliable indicator of future performance. It makes fund selection and fund credibility much better, enabling investors to select funds based on long term CAGR returns performance.

The story of November 2023 on the equity funds front is that short term returns and even long term returns have seen positive ramifications of the rally in the stock market indices. In the case of debt funds, the concern is on the volatility front and not so much on the direction of rates. For now, the interest rates appear to have peaked out.