A range to choose from - Mutual Fund Investments

If you looking to buy the equity funds that delivered the best returns this year, it may be best to have a rethink, for you shouldn’t be going by such a short return record. Funds which delivered the top returns over the past six months may not necessarily deliver an encore over the next six months. How a fund reacted to market cycles in the past is as important in choosing funds as the overall long-term track record. Choose 5-6 funds from diversifieds — large- and mid-caps, one or two thematics and an index fund to have a healthy portfolio based on how they performed across all market cycles, apart from looking at just one-, three- and five-year returns.

Taking into consideration factors such as containment of downside during market volatility and participation during market rallies as well as long-term track record, the following funds, in their respective categories, are recommended.

Large-cap options


These are safer bets as they invest in companies with reasonable earnings visibility. A systematic investment plan or lump-sum investment during market declines may be considered in such funds. HDFC Top 200 Equity, DSPBR Top 100, HDFC Equity, Franklin India Bluechip, Birla Sun Life Frontline Equity and Sundaram Select Focus are some funds that you can take exposures to. These funds have a long track record, contained downsides better than their benchmarks during market falls and outperformed during market upswings, most of the time.

Midcap track record


Birla Sun Life Midcap, Sundaram Select Midcap and HDFC Capital Builder are funds with a more than five-year track record, in which they acquitted themselves well across market cycles. IDFC Premier Equity, a little over three years old, may also be a good addition as it has delivered good returns in market upswings.

Among theme funds, Reliance Diversified Power Sector fund may prop up overall portfolio returns if its track record is anything to go by. ICICI Pru Infrastructure Fund may be an aggressive infrastructure fund addition. ICICI Pru Index Fund Nifty Plan, with its consistent track record, would be a welcome addition to your portfolio.

In constructing a core portfolio, 3-4 large-cap funds, one or two mid-cap funds and a theme fund may be chosen. Increase in the number of mid-cap funds or infrastructure may be done depending on the investor’s risk appetite.