India’s top performing mutual fund schemes in July 2023

1 Aug 2023 , 12:17 PM

July 2023 was another month of aggressive FPI inflows, although the markets remained in a much narrower range. FPI flows in July were $5.7 billion, on top of $5.7 billion in June and $5.3 billion infused in May 2023. Overall, in the last 3 months, the FPIs have infused $16.7 billion into Indian equities, showing a level of conviction in Indian markets, not seen in a long time. The Nifty once again rallied in the month of July 2023 to close at 19,754 levels, gaining a full 2.94% in the month. In addition, other indices also gained in July 2023. The Nifty Next-50 index gained 3.51% in the month of July 2023; the Mid-Cap 100 gained 5.50% while the Small Cap 100 index gained a whopping 7.99% in the month. Even as the frontline showed signs of tiring at higher levels, alpha hunting was seen in the smaller stocks.

Bond markets saw a bounce in yields in July after the sharp fall in May and early June. The 10-year benchmark bonds closed the month of July with yields of 7.18%, higher than the closing levels of May and June 2023. This can be attributed to the 25 bps rate hike by the Fed in its July policy. In addition, the higher than expected inflation in India in June as well as the prospects of higher vegetables and cereals inflation in July and August also put pressure on the bond yields. That had an impact on the bond fund performance for shorter time frames, although the longer term yields remained almost intact. Let us now turn to the July 2023 mutual fund performance; in equity and debt funds.

1. Equity Large-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Canara Robeco Blue-Chip (G)	17.687%	22.116%	15.125%
Nippon India Large Cap (G)	26.292%	31.144%	15.090%
Baroda BNP Paribas Large (G)	18.374%	21.705%	14.475%
Category Average	16.870%	21.628%	12.037%
BSE 100 (TR) Index	16.528%	23.400%	13.105%
Data Source: Morningstar

1. Equity Multi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	21.782%	36.253%	23.477%
Mahindra Manulife Multi (G)	25.017%	32.070%	19.154%
Nippon India Multi Cap (G)	32.317%	40.103%	17.927%
Category Average	22.896%	29.751%	16.352%
BSE 500 (TR) Index	17.415%	15.151%	13.502%
Data Source: Morningstar

1. Equity Flexi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Flexi Cap Fund (G)	26.411%	38.727%	22.492%
PPFAS Flexi Cap Fund (G)	23.262%	26.383%	19.324%
PGIM India Flexi Cap Fund (G)	15.993%	25.861%	18.030%
Category Average	18.031%	24.032%	13.404%
BSE 500 (TR) Index	17.415%	25.151%	13.502%
Data Source: Morningstar

1. Equity Mid-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Mid-Cap Fund (G)	29.015%	41.497%	23.849%
PGIM India Mid-Cap Fund (G)	13.009%	35.759%	21.619%
SBI Magnum Midcap Fund (G)	23.496%	37.003%	19.357%
Category Average	22.364%	31.521%	16.312%
BSE Midcap (TR) Index	27.998%	31.787%	14.992%
Data Source: Morningstar

1. Equity Small-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Small Cap Fund (G)	41.779%	53.304%	29.001%
Axis Small Cap Fund (G)	25.527%	38.271%	24.136%
Nippon Small Cap Fund (G)	37.040%	48.588%	23.420%
Category Average	28.064%	40.700%	19.306%
BSE Midcap (TR) Index	30.470%	40.179%	17.193%
Data Source: Morningstar

1. Equity Linked Savings Schemes (Tax Saving)     

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Tax Plan (G)	21.241%	40.047%	25.448%
Mirae Asset Tax Saver (G)	18.359%	27.264%	17.559%
Bandhan Tax Advantage (G)	25.094%	34.439%	16.788%
Category Average	18.652%	24.503%	13.146%
BSE 200 (TR) Index	16.180%	24.127%	13.388%
Data Source: Morningstar

1. Index Funds (Equity)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
DSP Nifty-50 Equal Weight (G)	18.669%	28.306%	13.166%
Nippon India Sensex Fund (G)	16.759%	22.043%	13.083%
ICICI Pru Sensex Fund (G)	16.664%	21.911%	13.076%
Category Average	17.440%	22.716%	11.943%
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 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Absolute Fund (G)	17.557%	31.174%	21.194%
ICICI Pru Equity & Debt (G)	22.029%	30.072%	17.087%
Baroda BNP Paribas AEH (G)	17.073%	19.665%	14.944%
Category Average	16.403%	20.496%	12.069%
CRISIL MIF Blended Index PR	9.036%	7.285%	8.728%
Data Source: Morningstar

1. Balanced Funds (Conservative Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Kotak Debt Hybrid (G)	12.475%	13.025%	11.150%
SBI Conservative Hybrid (G)	12.091%	12.954%	10.561%
Canara Robeco Hybrid (G)	9.135%	9.830%	9.845%
Category Average	9.028%	9.892%	7.532%
CRISIL MIF Blended Index PR	9.036%	7.285%	8.728%
Data Source: Morningstar

1. Dynamic Asset Allocation Funds (BAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HDFC BAF (G)	24.230%	28.609%	15.239%
Edelweiss BAF (G)	14.598%	17.184%	12.600%
ICICI Prudential BAF (G)	12.615%	16.082%	11.507%
Category Average	13.452%	13.687%	9.515%
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 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Edelweiss Equity Arbitrage (G)	7.175%	5.314%	5.825%
Nippon Arbitrage Fund (G)	7.135%	5.247%	5.758%
Invesco Arbitrage Fund (G)	7.567%	5.431%	4.743%
Category Average	6.434%	4.545%	4.962%
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 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
DSP G-Sec Fund (G)	7.768%	4.905%	8.845%
Bandhan G-Sec Fund (G)	6.585%	3.942%	8.697%
SBI Magnum Gilt Fund (G)	8.920%	5.217%	8.688%
Category Average	7.039%	4.011%	7.521%
I-SEC MIBEX Index TR	6.892%	4.488%	7.816%
Data Source: Morningstar

1. Corporate Bond Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HSBC Corporate Bond (G)	7.136%	4.404%	8.109%
ABSL Corporate Bond (G)	7.225%	5.403%	7.690%
HDFC MF Corporate Bond (G)	7.506%	5.202%	7.677%
Category Average	6.653%	4.729%	6.804%
CRISIL ST Bond Fund Index PR	6.865%	5.046%	7.149%
Data Source: Morningstar

1. Credit Risk Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Credit Risk Fund (G)	7.473%	7.174%	8.250%
HDFC Credit Risk Fund (G)	7.299%	7.188%	8.021%
Baroda Credit Risk Fund (G)	8.257%	11.957%	7.778%
Category Average	7.224%	9.706%	4.835%
CRISIL ST Bond Fund Index PR	6.865%	5.046%	7.149%
Data Source: Morningstar

1. Liquid Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Jul-23):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Liquid Plan (G)	6.551%	5.133%	5.863%
Mahindra Manulife Liquid (G)	6.755%	4.651%	5.397%
Edelweiss Liquid Fund (G)	6.740%	4.633%	5.375%
Category Average	5.815%	3.922%	4.794%
CRISIL Liquid Fund Index PR	6.751%	4.789%	5.499%
Data Source: Morningstar

 

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

1. Equity funds have generally given lower 1-year return compared to the previous month. That is more because of the shifting base and the small caps and mid-caps were less impacted by the higher base. However, over a 3-year period and 5-year period, the July impact was fairly limited for the equity funds. 

    

2. The outperformance has been more pronounced in the case of small cap and mid cap funds. Also, in the case of large cap and multi-cap funds, the outperformance has been less pronounced as compared to the mid-cap and small-cap funds. The outcome of these numbers is visible in flows, which are gravitating towards focused small cap funds.

    

3. A word on the median category returns across various categories. In the case of large cap funds and the ELSS funds, the median category returns are either at par with the benchmark or lower. However, in the case of mid-cap funds and small cap funds, even the median returns are meaningfully higher than the benchmark returns.

    

4. Debt funds have given lower returns on a 1-year basis compared to last month, and that can be attributed to the fund NAVs being impacted by the spike in yields. That has suppressed bond returns and the impact is more visible in short term returns. Bond market price returns are inversely related to the bond yields.

    

5. One interesting point emerges from the analysis of the above mutual fund rankings. The top ranking names across equity and debt categories have been largely consistent over the past few months on a rolling basis and the exceptions have been very few. That means; past returns in most mutual fund categories are a fairly reliable indicator of future performance. That adds a lot of value from an advisory perspective.

July 2023 has been another good month for equity funds, although bond funds have been more cautious. Next month alpha could come from IPOs. We have to wait and watch.