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Top 10 Best Diversified Equity Mutual Funds to invest in 2016: Part 2

Mutual Funds

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Mutual Funds article in Advisorkhoj - Top 10 Best Diversified Equity Mutual Funds to invest in 2016: Part 2
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In the first part of this series, Top 10 Diversified Equity Mutual Funds for investment in 2016: Part 1, we saw the top 10 diversified equity funds, based on CRISIL’s latest mutual fund ranking (for quarter ended March 2016) and also our internal quartile ranking based criteria. Here is a brief re-cap of the top 10 diversified equity funds.


Mutual Funds - Top 10 diversified equity funds, based on CRISIL’s latest mutual fund ranking (for quarter ended March 2016) and also our internal quartile ranking based criteria

Source: Advisorkhoj Research, CRISIL, Morningstar


In this post, we will do a brief review each of these funds:-

ICICI Prudential Exports and Other Services Fund

The scheme was launched in 2005 and has been one of the top performing thematic funds for several years. The fund has given over 15% compounded annual returns since inception. The AUM of this fund is little over 830 crores. The expense ratio of the fund is 2.42%. Yogesh Bhatt and Mr. Manish Gunwani are the fund managers of this scheme. The chart below shows the 3 year rolling returns of ICICI Prudential Exports and Other Services Fund over the last 5 years. We have chosen a three year rolling returns period, because investors must have a long investment horizon for investing in diversified equity funds.


Mutual Funds - The 3 year rolling returns of ICICI Prudential Exports and Other Services Fund over the last 5 years

Source: Advisorkhoj Rolling Returns Calculator


You can see that, the fund has not only beaten the benchmark consistently, but the three year rolling returns have consistently been exceeded 20% on annualized basis over the last 5 years. In fact, the fund has delivered more than 30% three year rolling returns, on an annualized basis nearly 90% of the times, over the last 5 years (if you want to see the rolling returns of this fund in a tabular format, please go to the rolling returns page of this fund and click on the button, See Rolling Returns in Tabular Format, at the bottom of the page).

This is truly outstanding performance. From a portfolio perspective, the fund is biased towards large cap segment. From an investment style standpoint, the fund managers invest in growth stocks. Even though the volatility of the fund is below average, the Sharpe Ratio is excellent (for more scheme performance and other details, please see our fund research page).

Earlier this year, we reviewed this fund in our post, ICICI Prudential Exports and Other Services Fund: An outstanding performer.

SBI Magnum Multicap Fund

The diversified equity fund was launched in 2005 and has an AUM base of nearly 800 crores. Though the the expense ratio of the fund is on the higher side at 2.86%, the fund manager is delivered outstanding alpha. Richard D’souza is the fund managers of this scheme. The chart below shows the 3 year rolling returns of SBI Magnum Multicap Fund over the last 5 years.


Mutual Funds - The 3 year rolling returns of SBI Magnum Multicap Fund over the last 5 years

Source: Advisorkhoj Rolling Returns Calculator


You can see that, the fund has not only beaten the benchmark consistently, but the three year rolling returns have been over 15% on an annualized basis more than 90% of the times, irrespective of market conditions. The fund has delivered more than 20% rolling returns also fairly often. From a portfolio perspective, the fund is biased towards large cap segment. From an investment style standpoint, the fund managers invest in growth stocks. While the volatility of the fund is below average, the Sharpe Ratio is above average, indicating strong risk adjusted performance (for more scheme performance and other details, please see our fund research page).

UTI MNC Fund

This thematic fund was launched in 2010 and built a strong reputation among investors by virtue of its performance. The fund has given 18% compounded annual returns since inception. The AUM of this fund is over 1,960 crores, while the expense ratio of the fund is 2.49%. Swati Anil Kulkarni is the fund manager of this scheme. The chart below shows the 3 year rolling returns of UTI MNC Fund over the last 5 years.


Mutual Funds - The 3 year rolling returns of UTI MNC Fund over the last 5 years

Source: Advisorkhoj Rolling Returns Calculator


Like the previous two funds, this fund too has not only beaten the benchmark consistently, but the three year rolling returns have consistently been exceedingly good, over 20% on an annualized basis nearly 90% of the times. From a portfolio perspective, the fund invests in companies which are large cap multinational companies in diverse sectors such as FMCG, pharmaceutical, engineering etc. From an investment style standpoint, the fund manager has a bias for growth stocks. While the volatility of the fund is above average, the Sharpe Ratio is high, signifying strong risk adjusted returns (for more scheme performance and other details, please see our fund research page).

Birla Sun Life Advantage Fund

Birla Sun Life Advantage Fund is a popular large cap oriented diversified equity fund from Birla Sun Life stable. The fund was launched in 1995 and has been a big wealth creator for investors. The fund has over 1,160 crores of Assets under Management. The expense ratio of the fund is 2.5%. Satyabrata Mohanty is the fund manager of this scheme. The fund has given nearly 20% compounded annual returns since inception. The chart below shows the 3 year rolling returns of Birla Sun Life Advantage Fund over the last 5 years.


Mutual Funds - The 3 year rolling returns of Birla Sun Life Advantage Fund over the last 5 years

Source: Advisorkhoj Rolling Returns Calculator


You can see that, the fund has not only beaten the benchmark consistently, but the three year rolling returns have consistently been exceedingly good. The fund has given more than 20% 3 year rolling returns over the last 5 years, nearly 80% of the times.

These are outstanding returns, especially given that the, fund has a predominantly large cap bias. From an investment style standpoint, the fund manager has a bias for growth stocks. While the volatility of the fund is above average, the fund has excellent Sharpe Ratio (for more scheme performance and other details, please see our fund research page).

About a year back, we reviewed Birla Sun Life Advantage Fund in our post, Nearly 40 times returns in 20 years: Birla Sun Life Advantage Fund is a true wealth creator.

Birla Sun Life Equity Fund

Birla Sun Life Equity Fund is the second fund from the Birla Sun Life stable in our selection of Top Diversified Equity Fund. The fund was launched in 1998 and has been a big wealth creator for investors. The fund has around 2,480 crores of Assets under Management. The expense ratio of the fund is 2.5%. Anil Shah is the fund manager of this scheme. The fund has given nearly 25% compounded annual returns since inception.

This fund is another big wealth creator for investors. 1 lac invested in the NFO of the fund, would have grown to nearly 50 lacs by now. The chart below shows the 3 year rolling returns of Birla Sun Life Equity Fund over the last 5 years.


Mutual Funds - The 3 year rolling returns of Birla Sun Life Equity Fund over the last 5 years

Source: Advisorkhoj Rolling Returns Calculator


You can see that, the fund has not only beaten the benchmark consistently, but the three year rolling returns have consistently been exceedingly good.

Like its sister fund, Birla Sun Life Advantage Fund, Birla Sun Life Equity Fund has given more than 20% three year rolling returns over the last 5 years, nearly 80% of the times. From a portfolio perspective, the fund has a large cap bias. From an investment style standpoint, the fund manager has a bias for growth stocks. While the volatility of the fund is above average, the fund has excellent Sharpe Ratio (for more scheme performance and other details, please see our fund research page).

Conclusion

In this post, we reviewed some of the top performing diversified equity mutual funds. Investors should consult with their financial advisors, if these funds are suitable for their investment portfolios. In the next part of this series, we will do brief reviews of the other top performing diversified equity funds.

Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

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Dwaipayan Bose

An alumnus of IIM Ahmedabad, Dwaipayan is a Finance and Consulting professional, with 13 years of management experience, mostly in MNCs like American Express and Ameriprise Financial, both in India and the US. In his last role, he was the Chief Financial Officer of American Express Global Business Services in India. His key interests are building best in class organizations, corporate governance and talent development

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