India’s top performing mutual fund schemes in March 2024

31 Mar 2024 , 10:10 AM

HOW EQUITY MARKETS PANNED OUT IN MARCH 2024

In January 2024, FPIs had sold $3.10 Billion in equities, while February 2204 saw marginal infusion of $186 Million into equities. In contrast, the month of March 2024 saw FPI net inflows into equities to the tune of $4.24 Billion; of which $3.52 Billion came from secondary markets and $0.72 Billion into primary markets. However, the real story of March gets further consolidated if you add the net debt flows from FPIs. For the month of March, FPIs infused $2.04 Billion into debt, taking their total infusion into equity and debt in March 2024 to $6.28 Billion. Let us now turn to the equity indices story.

For the month of March 2024, the Sensex closed with gains of +1.59%, while the Nifty 50 index closed with gains of +1.57% higher. Among the other generic indices; Nifty Next-50 index closed +2.77% higher, the Mid-Cap 100 closed -0.54% lower while the Small Cap 100 index closed with -4.42% losses for March 2024. Both the smaller indices closed for the second consecutive month in losses; a clear indication of institutional investor interest and fund flows gravitating towards the large cap indices. While there is a shift towards safety, the shift out of the smaller stocks can also be attributed to the clampdown measures announced by SEBI.  These include 100% upfront margins on select stocks, additional special margins (ASM), and warnings to mutual funds to go slow on goring on smaller stocks.

HOW BENCHMARK BOND YIELDS TURNED OUT IN MARCH 2024

Bond markets, the month of March 2024, were again range bound; albeit volatile. Through the month of March 2024, the 10-year benchmark bond yields in India stayed between 7.01% and 7.09%, despite volatility creeping in. Bond market yields were impacted by a plethora of factors. On the upside, the oil prices have continued to remain in the range of $85/bbl and $90/bbl in the Brent crude market. That is an outcome of robust demand, restrained supply and the uncertainty created by the Red Sea crisis; which has not only pushed up freight rates, but also insurance premiums; resulting in imported inflation.

However, there were also other factors that kept the bond yields subdued. In the Fed statement, Jerome Powell indicate for the first time that 3 rate cuts were likely to happen in 2024. In India, the Indian government has been aggressive about its fiscal deficit targets and is all set to meet 5.8% fiscal deficit target for FY24 and 5.1% for FY25. The lower borrowing program for FY25 with just ₹7,50,000 Crore borrowing in H1-FY25 is also keeping bond yields under check. The markets are rife with expectations that, despite the food inflation challenge, RBI will cut interest rates after the full budget in July 2024.

1. Equity Large-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Baroda BNP Paribas Large (G)	45.086%	20.627%	19.124%
ICICI Pru Blue-Chip (G)	46.287%	22.593%	18.734%
Canara Robeco Blue-Chip (G)	37.833%	17.628%	18.708%
Category Average	40.276%	17.794%	15.767%
BSE 100 (TR) Index	35.786%	17.789%	16.214%
Data Source: Morningstar

2. Equity Multi-Cap Funds

Top performing Direct Plans% (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	56.601%	29.703%	29.278%
Mahindra Manulife Multi (G)	55.696%	27.567%	24.803%
Baroda BNP Multi Cap (G)	50.880%	24.646%	21.008%
Category Average	50.833%	24.756%	21.236%
BSE 500 (TR) Index	41.853%	19.481%	17.582%
Data Source: Morningstar

3. Equity Flexi-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Flexi Cap Fund (G)	64.958%	34.626%	30.481%
PPFAS Flexi Cap Fund (G)	42.007%	23.599%	23.868%
JM Flexi Cap Fund (G)	63.475%	27.693%	23.312%
Category Average	44.219%	19.665%	17.301%
BSE 500 (TR) Index	41.853%	19.481%	17.582%
Data Source: Morningstar

4. Equity Mid-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Mid-Cap Fund (G)	73.007%	38.665%	31.942%
Motilal Oswal Mid-Cap(G)	65.991%	37.025%	27.298%
Mahindra Manulife Mid-Cap (G)	66.684%	29.727%	26.186%
Category Average	54.491%	24.727%	21.987%
BSE Midcap (TR) Index	67.838%	26.501%	22.240%
Data Source: Morningstar

5. Equity Small-Cap Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Small Cap Fund (G)	73.738%	43.275%	36.535%
BOI Small Cap Fund (G)	56.318%	30.450%	31.235%
Nippon Small Cap Fund (G)	61.119%	35.812%	29.745%
Category Average	52.807%	28.898%	25.267%
BSE Midcap (TR) Index	64.506%	29.541%	24.979%
Data Source: Morningstar

6. Equity Linked Savings Schemes (Tax Saving)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Tax Plan (G)	61.907%	33.487%	32.576%
BOI ELSS Tax Saver (G)	60.395%	26.193%	26.034%
SBI Long Term Equity Fund (G)	63.552%	28.311%	21.710%
Category Average	43.130%	19.959%	17.442%
BSE 200 (TR) Index	40.092%	18.769%	17.193%
Data Source: Morningstar

7. Index Funds (Equity)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
DSP Nifty-50 Equal Weight (G)	47.624%	22.461%	17.869%
UTI Next 50 Index Fund (G)	64.318%	21.827%	17.429%
DSP Nifty Next-50 Fund (G)	64.458%	21.926%	17.171%
Category Average	49.490%	18.924%	15.313%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

8. Balanced Funds (Aggressive Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Absolute Fund (G)	41.843%	25.874%	25.098%
BOI S&M Equity and Debt (G)	51.209%	25.801%	21.530%
ICICI Pru Equity & Debt (G)	44.463%	26.766%	20.966%
Category Average	33.948%	16.967%	15.039%
CRISIL MIF Blended Index PR	12.471%	7.436%	9.052%
Data Source: Morningstar

9. Balanced Funds (Conservative Allocation)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Kotak Debt Hybrid (G)	19.546%	12.394%	12.623%
SBI Conservative Hybrid (G)	16.269%	11.062%	10.886%
HDFC Hybrid Debt Fund (G)	18.570%	11.916%	10.643%
Category Average	14.592%	9.310%	8.470%
CRISIL MIF Blended Index PR	12.471%	7.436%	9.052%
Data Source: Morningstar

10. Dynamic Asset Allocation Funds (BAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HDFC BAF (G)	42.782%	25.387%	18.398%
Baroda BNP Paribas BAF (G)	31.773%	15.385%	16.598%
Edelweiss BAF (G)	28.886%	14.867%	15.752%
Category Average	27.505%	13.11%	12.280%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

11. Multi-Asset Allocation Funds (MAAF)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Multi-Asset Fund (G)	48.792%	33.494%	28.534%
ICICI Pru Multi-Asset Fund (G)	34.640%	25.148%	19.678%
HDFC Multi-Asset Fund (G)	25.967%	16.122%	15.121%
Category Average	30.368%	17.602%	15.751%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

12. Arbitrage Funds (Cash-Futures)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Tata Equity Arbitrage (G)	8.456%	6.209%	6.203%
Edelweiss Arbitrage Fund (G)	8.573%	6.319%	6.133%
Invesco India Arbitrage (G)	8.541%	6.480%	6.098%
Category Average	7.846%	5.574%	5.375%
Benchmark Index	N.A.	N.A.	N.A.
Data Source: Morningstar

13. Government Securities Funds (Gilt Funds)

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
SBI Magnum Gilt Fund (G)	9.453%	6.477%	8.577%
DSP Gilt Fund (G)	10.153%	6.441%	8.548%
Edelweiss G-Sec Fund (G)	9.319%	6.451%	8.434%
Category Average	8.540%	5.521%	7.232%
I-SEC MIBEX Index TR	7.493%	5.549%	7.046%
Data Source: Morningstar

14. Corporate Bond Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
HSBC Corporate Bond (G)	7.830%	5.471%	7.664%
ABSL Corporate Bond (G)	8.181%	6.018%	7.481%
ICICI Pru Corporate Bond (G)	8.300%	6.214%	7.460%
Category Average	7.638%	5.346%	6.589%
CRISIL ST Bond Fund Index PR	7.594%	5.638%	6.919%
Data Source: Morningstar

15. Credit Risk Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Credit Risk Fund (G)	8.923%	7.393%	8.293%
DSP Credit Risk Fund (G)	17.424%	10.394%	8.104%
HDFC Credit Risk Fund (G)	8.409%	6.843%	8.002%
Category Average	8.758%	9.874%	5.330%
CRISIL ST Bond Fund Index PR	7.594%	5.638%	6.919%
Data Source: Morningstar

16. Liquid Funds

Top performing Direct Plans (Growth Option) on 5-year returns (as on 31st Mar-24):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Liquid Plan (G)	7.219%	5.675%	5.779%
Edelweiss Liquid Fund (G)	7.430%	5.516%	5.356%
Mahindra Manulife Liquid (G)	7.387%	5.551%	5.353%
Category Average	6.356%	4.743%	4.732%
CRISIL Liquid Fund Index PR	7.304%	5.578%	5.454%
Data Source: Morningstar

WERE FLOWS LINKED TO PERFORMANCE?

That is a pertinent question to ask here; were the flows in February 2024 determined by the performance of funds. We will take the last 1 year AUM change, as captured in the table below, and try to correlate the AUM shift with the returns. Indian mutual fund AUM stood at ₹54.54 Trillion as of the close of February 2024.

Month	Debt AUM (₹ Trillion)	Equity AUM (₹ Trillion)	Alternate AUM (₹ Trillion)	Total AUM (₹ Trillion)
Feb-23	12.30	15.02	11.83	39.46
Mar-23	11.82	15.17	12.09	39.42
Apr-23	12.99	15.85	12.47	41.62
May-23	13.49	16.57	12.85	43.20
Jun-23	13.48	17.43	13.22	44.39
Jul-23	14.17	18.25	13.69	46.38
Aug-23	14.00	18.60	13.74	46.64
Sep-23	13.05	19.08	14.17	46.58
Oct-23	13.54	18.79	14.10	46.72
Nov-23	13.58	20.33	14.87	49.05
Dec-23	12.91	21.79	15.78	50.78
Jan-24	13.77	22.50	16.17	52.74
Feb-24	14.50	23.12	16.62	54.54

Data Source AMFI

As can be seen in the above table, the overall AUM has grown by 38.2% you to ₹54.54 Trillion as of the close of February 2024. This has been supported by 15.5% growth in debt fund AUM, 53.9% growth in equity AUM and 40.5% growth in alternative assets. The enthusiasm of equity flows and hybrid flows are largely borne out by the performance of these funds. In the case of debt funds, the flows have been volatile, but that is more due to the treasury impact at the end of each quarter.

KEY TAKEAWAYS FROM THE MARCH 2024 MUTUAL FUND RANKINGS

Here are some key trends we could decipher from the rankings of various categories of mutual funds over different time periods as of end of March 2024.

• Large cap equity funds did a lot better than the mid-cap and small cap fund on one-year returns, due to the strength shown by large caps in March 2024. There is clearly a rush to safety and that is showing up in the performance of the large cap funds; including other proxies like ELSS funds and index funds. Interestingly, the mid-caps and small caps held their longer period returns, but short period returns were impacted.
• The alpha story is quite interesting for the equity funds. The top 3 rankers, across most of the categories of equity funds have been beating the benchmark index by a margin. Of course, at a category level, the performance is mixed but the top rankers have managed these uncertainties a lot better.
• Debt funds have again given divergent performance, although some broad trends are visible. The preference of investors is more towards the short end of the yield curve rather than the long end of the curve. Investors are yet to get confidence that the RBI would move on cutting rates. Also, the cannibalization of liquid funds market by the arbitrage funds has also picked up steam.
• The biggest takeaway is that leaders have been consistent, barring a few routine changes. These findings are consistent over a 5-year period also. That subtly testifies to the fact that; past returns in most mutual funds can be a reliable indicator of future performance. This has larger fund selection implications for retail investors and also for the specific group.

As India readies for the general elections, markets have turned volatile. However, the impact of such volatility on mutual fund performance is likely to be minimal.