MFs in 2022 | How large, mid and flexi-cap funds fared in 2022 — Check top performers here

As we end this year, it is interesting to look at how mutual funds have performed vs the benchmark in 2022. So, let’s track the performance of large, mid and flexicap funds. Large-cap funds, as we know, are the funds that invest major proportion of their assets under management (AUM) in equity shares of companies with a large market capitalization. A mid-cap fund is a pooled investment, such as a mutual fund, that focuses on companies with a market capitalization in the middle range of listed stocks.

A flexi-cap fund, on the other hand, is a type of mutual fund that is not restricted to investing in companies with a predetermined market capitalization.

The benchmark return for 1-year is around 11 percent. If we compare the way funds have fared versus the benchmark, the best performer is Nippon with a return of 17 percent. HDFC is second, which is followed by ICICI Prudential, clocking in a return of 12.5 percent. Apart from these, none have managed to beat the index.

Even when we look at 3 and 5 years returns, things don’t look much better.

In 1 year, only 4 out of 28 funds have managed to beat the index. 3 of these are from the top 10 largest fund list.

In terms of 3 year returns, only 2 of the top 10 and 4 of the total 26 funds managed to beat the benchmark. In 5 year-period, only 1 out of all 25 funds surpassed that benchmark.

The 1 year return for the benchmark came in at 8.74 percent and only 4 of the top 10 funds by size managed to beat that. HDFC did the best with an over 16 percent return, followed by Nippon at around 11 percent and Sundaram at a little over 9 percent.

4 out of the top 10 and 8 of the 25 funds could beat the benchmark over a 1-year period. If we look at 3 year annualised returns, we can see 3 of the top 10 and 5 of all 23 funds beat the benchmark and for a 5 year time frame, we can see 4 of the top 10 and 8 of the total 21 funds beating the benchmark.

The benchmark is at 10.2 percent. The best performing fund in this category is HDFC flexi cap with a near 24 percent return in 1 year. However, this is quite an outlier. The rest don’t look close to as good.

Actually, things haven’t been better if we expand the time span either. For the 1-year period, only 3 could beat it from the top 10 and from the total 28, only 5 managed a higher return. If we look at 3 year annualised returns, 3 of top 10 and 6 of all 24 managed to beat the benchmark. For a 5-year period, 4 of the top 10 and 7 of the total 21 funds clocked in a better return than the benchmark.

This means that while we have been talking about equity flows being good and Systematic Investment Plans (SIPs) picking up, it is important to highlight that fund managers have found it hard to beat the benchmark at least in the 3 largest categories by size.