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5 mutual funds that outperformed last year
05 Jan 2023
  • Introduction

Last year, the Sensex and Nifty 50 indices closed with gains of nearly 22%, marking 2021 the best year in terms of returns since the fiscal year of 2017. After the impact of the pandemic, the market recovered throughout 2021 to reach growth levels seen prior to the arrival of COVID, and corporate results had also improved consistently. The equities market has been on an incredible bull run and this was reflected in the performance of equity mid-cap and large-cap mutual funds. Higher inflation and RBI variable rate reverse repo ensured that bond yields stayed under pressure, leading to a spike of 6.50% as the year drew to a close.

 Yet, even in a year of spectacular returns for the market as a whole, there were some mutual funds that outperformed in 2021. 

  • Mutual Funds that Outperformed in 2021

Here are some of the best performing Regular Plans (Growth Option) on 5 year returns as recorded on 31st December, 2021:

Name of Fund

Type of Fund

1-Year Return

3-Year Return

5-Year Return

Axis Blue-Chip Fund (G)

Equity Large-Cap Fund

20.641%

19.641%

20.290%

Quant Active Fund (G)

Equity Multi-Cap Fund

55.644%

32.441%

25.958%

PGIM India Mid-Cap (G)

Equity Mid-Cap Fund

63.780%

36.028%

23.663%

SBI Small Cap Fund (G)

Equity Small-Cap Fund

47.565%

27.894%

24.608%

Quant Tax Plan (G)

Equity Linked Savings Scheme (Tax Saving)

59.829%

34.219%

25.828%

Quant Absolute Fund (G)

Balanced Fund (Aggressive Allocation)

44.476%

27.667%

20.447%

Data Source: Morningstar

  • Conclusion

Due to the continuous sell-off streak by Financial Institutions in light of the spread of the Omicron variant, in addition to inflation concerns, the market has recently lost some steam. It corrected by 10% from its peak before recovering, and yet several mutual funds managed to outperform their benchmarks. Investors are advised to diversify their mutual fund investments across small, mid and large-cap sectors by following an asset allocation approach. While doing so, keep in mind your financial goals, risk appetite and investment horizons. Note that Small and Mid-cap indices are riskier in comparison to Large-cap indices and that, in general, investing in equity-based funds is riskier than investing in fixed-income based funds. However, also remember that risk and potential for return are also positively correlated.
When it comes to deciding when and where to invest, do not base your final decision solely on the performance of the funds in the recent past. Market research, portfolio diversification, expert guidance and personal risk profile are all vital aspects to consider before committing to an investment.

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How to Analyse Mutual Funds for Big Returns | Things to Know Before Investing in Mutual Funds | Mutual Fund - Need of Financial Plan | How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Upcoming IPO | LIC IPO

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