I keep finding websites and other content providers happily posting top performers in the mutual fund scheme categories.
Everybody is eager to rank these funds according to performance and rate these funds according to stars. A 5 star rated fund 6 months back sometimes is not even in the list of funds.
Rating funds according to their past performance is not a bad thing, but then making predictions on the basis of past performance is not advisable. I don't mind if they also show what were the top performers 6 months back or 1 year back and tell us what happened to those funds and why are they not top performers this year. not a single site goes back and tells us why the earlier past performers are not top performers this month.
Past performance is necessary, it tells us how consistent the fund has been, it also gives us an idea of what to expect from the schemes and then the fund manager. but i totally disagree with websites or news papers posting top funds for the month, and make it a point to publish the report every month.
why i disagree because most of the investing public make their decisions based on the reports they read in papers and other websites. 6 months down the line the fund they so intelligently picked is not even there in any website. nobody talks about the top performers 6 months back or 1 year back... you hardly get any details on the funds... after a lot of searching you get the fund nav and you try to find out the returns on this basis.
For the Inquisitive Investors
let me show you what i am talking about...I did a small study by taking the top 10 performers for the years 2000-2010. I have calculated returns on an absolute basis every year from 1st January to 31st December. The results are interesting no two years have there been consistent top performers. Top performers in one year have been the worst performer in another year. Recommended sector funds have never performed post their recommendation.
Performance as on 2000 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
JM Basic Fund - Growth | 18.63 | 24.53 | 32% |
UTI Services Industries Fund - Growth | 21.22 | 27.56 | 30% |
UTI Energy Fund - Growth | 10.73 | 12.4 | 16% |
UTI Equity Tax Savings Plan - Growth | 11.03 | 11.45 | 4% |
Franklin India Taxshield - Growth | 26.22 | 25.13 | -4% |
Templeton India Growth Fund - Growth | 15.07 | 12.31 | -18% |
Franklin FMCG Fund - Growth | 15.19 | 12.18 | -20% |
PRINCIPAL Index Fund - Growth | 12.187 | 9.6597 | -21% |
Sundaram Taxsaver - (Open Ended Fund) - Growth | 11.38 | 9.02 | -21% |
HDFC Capital Builder Fund - Growth | 15.17 | 12.01 | -21% |
Performance as on 2001 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
Franklin India Prima Fund - Growth | 19.8 | 19.95 | 1% |
Taurus Bonanza Fund - Growth | 7.45 | 7.46 | 0% |
HDFC Equity Fund - Growth | 18.8 | 18.35 | -2% |
HDFC Taxsaver - Growth | 17.44 | 16.73 | -4% |
Franklin India Prima Plus - Growth | 20.97 | 19.83 | -5% |
SBI Magnum Sector Umbrella - Contra - Growth | 8.38 | 7.88 | -6% |
ICICI Prudential Taxplan - Growth | 11.97 | 11.22 | -6% |
Templeton India Growth Fund - Growth | 12.29 | 11.47 | -7% |
UTI Energy Fund - Growth | 12.62 | 11.75 | -7% |
UTI Pharma and Healthcare Fund - Growth | 10.79 | 10.02 | -7% |
Performance as on 2002 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
JM Basic Fund - Growth | 8.46 | 16.18 | 91% |
HDFC Long Term Advantage Fund - Growth | 9.645 | 13.74 | 42% |
Taurus Bonanza Fund - Growth | 7.46 | 10.5 | 41% |
Birla Sun Life Basic Industries - Growth | 8.16 | 11.41 | 40% |
SBI Magnum Sector Umbrella - Contra - Growth | 7.81 | 10.46 | 34% |
Birla Sun Life India Opportunities Fund - Growth | 10.09 | 13.26 | 31% |
PRINCIPAL Tax Savings Fund | 10.959 | 14.4 | 31% |
HDFC Top 200 - Growth | 13.57 | 17.23 | 27% |
DSP BlackRock Opportunities Fund - Growth | 6.64 | 8.4 | 27% |
ICICI Prudential Power - Growth | 10.65 | 13.35 | 25% |
Performance as on 2003 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
Franklin India Prima Fund - Growth | 29.24 | 80.59 | 176% |
Tata Equity Opportunities Fund - Growth | 8.1302 | 21.446 | 164% |
HSBC Equity Fund - Growth | 10.38 | 26.65 | 157% |
Sundaram Select Midcap - Growth | 10.29 | 26.2881 | 155% |
Birla Sun Life Basic Industries - Growth | 11.37 | 29 | 155% |
ICICI Prudential Taxplan - Growth | 12.75 | 31.87 | 150% |
Tata Pure Equity Fund - Growth | 9.7092 | 23.1612 | 139% |
Templeton India Growth Fund - Growth | 13.04 | 31 | 138% |
HDFC Long Term Advantage Fund - Growth | 13.818 | 32.712 | 137% |
DSP BlackRock Opportunities Fund - Growth | 8.47 | 19.99 | 136% |
Performance as on 2004 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
Reliance Banking Fund - Growth | 15.81 | 24.43 | 55% |
Birla Sun Life Buy India Fund - Growth | 9.18 | 13.78 | 50% |
HDFC Taxsaver - Growth | 42.32 | 62.477 | 48% |
HDFC Capital Builder Fund - Growth | 24.305 | 35.204 | 45% |
HDFC Long Term Advantage Fund - Growth | 33.182 | 47.914 | 44% |
Birla Sun Life Equity Fund - Growth | 57.81 | 82 | 42% |
Reliance Growth - Growth | 79.45 | 112.12 | 41% |
PRINCIPAL Growth Fund - Growth | 19.68 | 27.41 | 39% |
HSBC Equity Fund - Growth | 27.13 | 36.9718 | 36% |
ICICI Prudential Taxplan - Growth | 32.01 | 43.49 | 36% |
Performance as on 2005 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
ICICI Prudential FMCG - Growth | 16.91 | 32.48 | 92% |
SBI Magnum Sector Umbrella - Emerging Businesses | 13.02 | 23.5 | 80% |
Reliance Diversified Power Sector Fund - Growth | 12.8465 | 22.9669 | 79% |
SBI Magnum Global Fund 94 - Growth | 15.96 | 28.27 | 77% |
HDFC Taxsaver - Growth | 62.68 | 109.235 | 74% |
ICICI Prudential Emerging STAR Fund - Growth | 11.99 | 20.25 | 69% |
ICICI Prudential Taxplan - Growth | 43.78 | 73.41 | 68% |
Reliance Growth - Growth | 112.86 | 189.18 | 68% |
SBI Magnum Sector Umbrella - Contra - Growth | 14.91 | 24.92 | 67% |
Franklin FMCG Fund - Growth | 18.33 | 30.07 | 64% |
Performance as on 2006 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
Tata Infrastructure Fund - Growth | 15.0497 | 24.0048 | 60% |
UTI Infrastructure Fund - Growth | 17.9 | 28.55 | 59% |
Reliance Diversified Power Sector Fund - Growth | 22.9582 | 36.4658 | 59% |
Sundaram Select Midcap - Growth | 58.423 | 92.5562 | 58% |
ICICI Prudential Infrastructure Fund - Growth | 11.7 | 18.5 | 58% |
ICICI Prudential Dynamic Plan - Growth | 41.7855 | 65.8052 | 57% |
Reliance RSF - Equity - Growth | 10.0288 | 15.6389 | 56% |
Sundaram CAPEX Opportunities Fund - Growth | 11.1806 | 17.4207 | 56% |
Franklin India Opportunity Fund - Growth | 17.02 | 26.41 | 55% |
SBI Magnum Global Fund 94 - Growth | 28.62 | 44.28 | 55% |
Performance as on 2007 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
Reliance Diversified Power Sector Fund - Growth | 36.7563 | 81.8373 | 123% |
JM Basic Fund - Growth | 18.91 | 39.8136 | 111% |
IDFC Premier Equity Fund - Plan A - Growth | 13.3157 | 27.8173 | 109% |
Taurus Taxshield - Growth | 17.27 | 36.05 | 109% |
Taurus Discovery Fund - Growth | 15.74 | 31.05 | 97% |
JM Financial Services Sector Fund - Growth | 9.89 | 19.1678 | 94% |
JM Emerging Leaders Fund - Growth | 10.62 | 20.5794 | 94% |
ICICI Prudential Infrastructure Fund - Growth | 18.63 | 35.69 | 92% |
Reliance RSF - Equity - Growth | 15.793 | 30.1806 | 91% |
DWS Investment Opportunity Fund - Reg - Growth | 23.69 | 44.83 | 89% |
Performance as on 2008 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
UTI Spread Fund - Growth | 11.2989 | 12.4678 | 10% |
HDFC Arbitrage Fund - IP - Growth | 10.119 | 11.048 | 9% |
ICICI Prudential Blended Plan - Option A - Growth | 12.2675 | 13.374 | 9% |
JM Arbitrage Advantage Fund - Growth | 11.2769 | 12.2703 | 9% |
Religare Arbitrage Fund - Growth | 10.5919 | 11.4923 | 9% |
Kotak Equity Arbitrage Fund - Growth | 11.8999 | 12.8658 | 8% |
SBI Arbitrage Opportunities Fund - Growth | 11.1337 | 12.0288 | 8% |
ICICI Prudential Equity & Derivatives Fund - I O - Retail - Growth | 11.09 | 11.98 | 8% |
Benchmark Equity And Derivative Opportunities Fund - Growth | 10.1498 | 10.9619 | 8% |
UTI Pharma and Healthcare Fund - Growth | 25.02 | 18.41 | -26% |
Performance as on 2009 | |||
Scheme | Jan-01 | Dec-31 | Absolute returns |
Principal Emerging Bluechip Fund - Growth | 11.56 | 27.97 | 142% |
JM Mid Cap Fund - Growth | 11.2307 | 26.4605 | 136% |
ICICI Prudential Discovery Fund - Growth | 17.63 | 40.35 | 129% |
Franklin Infotech Fund - Growth | 23.8534 | 54.5625 | 129% |
UTI Transportation and Logistics Fund - Growth | 10.14 | 23.12 | 128% |
Sahara Banking and Financial Services Fund - Growth | 10.6038 | 23.7146 | 124% |
Taurus Infrastructure Fund - Growth | 6.13 | 13.54 | 121% |
Tata Life Sciences and Technology Fund - Appr | 28.4687 | 62.8642 | 121% |
ICICI Prudential Technology Fund - Growth | 6.41 | 14.1 | 120% |
Reliance Pharma Fund - Growth | 20.2807 | 43.9553 | 117% |
Performance as on 2010 | |||
Scheme | Jan-01 | Nov-01 | Absolute returns |
Reliance Banking Fund - Growth | 76.2996 | 123.2571 | 62% |
Religare Banking Fund - Reg - Growth | 15.65 | 23.74 | 52% |
UTI Banking Sector Fund - Growth | 33.49 | 50.39 | 50% |
Sundaram Financial Services Opportunities Fund | 15.879 | 23.7801 | 50% |
Sahara Banking and Financial Services Fund - Growth | 23.8906 | 35.7268 | 50% |
ICICI Prudential Banking and Financial Services Fund - Retail - Growth | 14.7 | 21.14 | 44% |
Religare Mid N Small Cap Fund - Growth | 11.37 | 16.08 | 41% |
Canara Robeco FORCE Fund - IP - Growth | 10.8 | 14.88 | 38% |
Franklin FMCG Fund - Growth | 50.5906 | 69.6839 | 38% |
Kotak Lifestyle Fund - Growth | 11.265 | 15.509 | 38% |
The data is hard to find but to prove my point i had to do this.... if i had done the same calculation on a quarterly basis it would have had a much more diverse set of funds.
If you notice sectoral funds have not had a consistent bull rally for two years, i am not saying they will not but just because the last year reliance pharma gave 100% returns does not mean that this year they will give the same returns.
FMCG funds alwyas do well in recession times and the beginning of recovery... once recovery has happened then the banking and financial services funds have the extended rally.
Use past data to get trends and not to invest plainly on blind faith and hope for the best.
my suggestion to all those investors who looks at past returns is that look at the average performers but consistent ones over a period of 2 years... they have better chance of delivering returns and try to avoid star funds of the quarter or the year.
I have posted returns of the last quarter because I feel there could be slight correction,. even if there is no correction I can with 90% confidence say that the top performers of the last quarter will not be there in the next quarter.
I have posted returns of the last quarter because I feel there could be slight correction,. even if there is no correction I can with 90% confidence say that the top performers of the last quarter will not be there in the next quarter.
| Scheme Name | NAV | 3 Months |
| Reliance Banking Fund - Growth | 126.4171( 09-Nov-10 ) | 29.7757 |
| Religare Banking Fund - Reg - Growth | 24.27( 09-Nov-10 ) | 26.0779 |
| UTI Banking Sector Fund - Growth | 51.57( 09-Nov-10 ) | 25.7192 |
| Sundaram Financial Services Opportunities Fund | 24.3571( 09-Nov-10 ) | 25.5404 |
| JM Financial Services Sector Fund - Growth | 12.5328( 09-Nov-10 ) | 23.4953 |
| ICICI Prudential Banking and Financial Services Fund | 21.63( 09-Nov-10 ) | 23.2479 |
| Sahara Banking and Financial Services Fund - Growth | 36.5605( 09-Nov-10 ) | 23.1906 |
| Religare AGILE Fund - Growth | 7.61( 09-Nov-10 ) | 22.1509 |
| Birla Sun Life Commodity Equities Fund - GPM | 15.1356( 09-Nov-10 ) | 20.491 |
| Religare AGILE Tax Fund - Growth | 8.56( 09-Nov-10 ) | 20.3938 |
Good One.
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