Jagoinvestor

August 30, 2010

List of Best Equity Diversified Mutual funds for 2010

Want to invest in the best mutual funds in India? Read on. I have compiled a short list of Mutual Funds which are top mutual funds in the Equity Diversified category. These are long-term winners in their categories and have proved their performance over the years by beating their benchmark and category average by a good margin. These are non-tax saving Equity diversified mutual funds that are large-cap oriented. Remember that I am giving a list of funds. These are funds that have more than half allocation in large-cap oriented companies and around 50% of their money in the top 3 sectors they hold. Based on these criteria, I am putting 7 best mutual funds along with analysis, some of these are very old and some are relatively newer. (last year list)

List of Best Equity Mutual Funds

Source: valueresearchonline.com

Portfolio & Sector Allocation

All the above funds have returned around 20% or more in different time frames consistently, which is very encouraging when you want to invest in these funds. However our concentration this time is large-cap oriented mutual funds, we are not including funds that have a high concentration in midcap or small-cap funds. Let’s look at these mutual funds share in Large or Giant Companies. My criteria were to have at least 60%+ in Large/Giant Companies and around 50% allocation in the top sectors they invested in. We also have funds expense ratio which is around 2% for each of them. Read Magic of SIP

Source: valueresearchonline.com

Fund Manager and a Brief Overview of Mutual Funds

Past performance is just one of the criteria we can look at, but it’s not enough and not a guarantee of how it will perform in the future. Let’s also look at who manages it and how these funds have done so far overall as per their mandate and investing philosophy. Please note, that we are talking about the Growth option here and not the dividend option.

HDFC Top 200

HDFC Top 200 is one of the most well-known Mutual Funds in the country. It’s an amazing performance of 26% CAGR in the last 14 yrs is proof. 10 lacs invested in HDFC Top 200 since Inception is worth 2.54 crores (non-taxable) today compared to 30 lacs in FD (taxable). Some achievements of funds are that in the 2008 bear market, HDFC Top 200 was able to restrict its fall to 45% only, which was 11% less than its benchmark and 8% less than its category. Prashant Jain is the Fund Manager of HDFC Top 200 and one of the best known and famous Fund managers in the country with a long term experience.

Prashant Jain’s Investment Approach: “The criteria that go into selecting stocks/sectors are quality, our understanding, growth prospects, valuation of businesses and the composition of the benchmark – BSE 200.”. The fund has good 20% allocation in Midcap or small-cap stocks which gives a kicker in returns.

How to look beyond short term returns in Mutual Funds

DSP BlackRock Top 100 Equity

DSPBR top 100 is not a decade old fund, but its performance is strong enough to say that it’s one of the best in the category as of now. The fund has given enough proof of its performance like even in the first year of its launch it gave an amazing 129% return beating its benchmark by an “oh my god” 29% return:). It also showed its capacity to restrict loses in the bear market of 2008  by falling by only 46% compared to its benchmark which fell by 55 %, thereby giving a better performance by 9 %. The best thing I liked about this fund is that this fund has provided very strong performance by mainly focusing on large-cap companies, the fund allocation in Large-cap companies stands at 94% which is outstanding. This clearly shows the competence of Fund manager Apoorva Shah who is managing the fund for the last 3 yrs.

Birla Sun Life Frontline Equity A

This is another winner in the long run. Over the years Birla Sun life frontline equity has consistently outperformed its benchmark by a good margin. During the market falls of 2004, 2006 and the big crash of 2008 and early 2009, This fund was able to restrict downsides better than its benchmark. The fund is largely Large Cap oriented, however the fund is known to take some risks in Midcap space and hence has seen one-quarter and its first year lagging behind its benchmark, but that was not a prolonged behavior, over all it has done great. The main reason it came to top in performance was the entry of Mahesh Patil as the fund manager in Nov 2005.

HDFC Equity

This fund is for long-term investors because HDFC Equity does not hesitate to take risks. Having a good allocation in midcap/small-cap companies, Its performance comes by being invested for long-term, which means short-term volatility in its performance. Being 15+ yrs old fund, have shown its performance over and over again, this one is for people who really like to play with mutual funds on a long-term basis. The fund manager is again star performer Prashant Jain, who took over this fund in 2003 and the fund has never looked back. Just to give you a flavor, the fund in 2009 has given 30% more than Nifty Index and in the last 1 yrs itself, it has given 42% return compared to just 15% from Nifty. You can count this one as an aggressive large-cap fund for investors with a strong heart and long-term vision

UTI Opportunities

As the name suggest, UTI opportunities are for you, only if you a risk taker and like to bet on different opportunities available in the market. As per the mandate of UTI opportunities it looks at the gaps available in the market and the sector and pics the stocks which are really undervalued and might outperform in the future. As per the fund mandate, the Fund manager dynamically shifts between sectors depending on the macro economic outlook and opportunities available in the market. This means the potential of a huge upside as well as the risk of getting wrong. After Harsh Upadhyaya took over in 2007, the fund has done wonders and has given returns double than its benchmark, which is impressive. So if you a kind of investor who likes to take chance on opportunities, UTI Opportunities should be in your Portfolio.

Reliance RSF Equity

Reliance RSF has shown some impressive performance over the last some years. However the fund is fairly aggressive in nature and is known to take risky calls whenever it finds good opportunity, despite being called a large-cap fund, Reliance RSF has large amount (45%)  of portfolio in small and mid-cap stocks at the time of writing this article, The fund did not really do very well when it started, but within a year it came on track and then showed good performance. Remember that this is a risky fund and can be actually compared to mid-cap funds in some sense given its nature of taking risks. So it might not suit you if you like to take long-term calls and want to be on the safe side. The fund is also known to churn its portfolio faster, so be cautious.

UTI Dividend Yield

This fund is really special. UTI Dividend Yield is another gem in the basket of Diversified mutual funds with a different style of investing. This is one fund, which has a woman for a fund manager in Swati Kulkarni, who has done a wonderful job in managing the fund till now. As per the mandate, the UTI dividend yield fund should make an investment of at least 65 percent of the portfolio in equity shares that have a high dividend yield at the time of investment. The fund has managed to successfully deliver on its commitment and has never deviated from its words. That’s called ethics and focus. Due to this, the fund has given a strong performance and because of its nature of strategy, the downfall is always restricted well. Ladies would like to invest in this fund given they like to play safe and it also comes from a lady fund manager 🙂 (Women & Personal Finance in India)

Which one should you invest in?

Remember that you have to take a call based on what your time frame is and which fund suits your requirement, Overall, if you are too confused in choosing the fund, I would say the best thing would be to choose any, randomly and invest rather than delaying your decision because of confusion. Another thing which you should understand that this is not an exhaustive list. There are enough funds other than these which could have been here in the list, but I have not included them as these 7 funds were the one which came on the top as per my criteria and also because I wanted to limit the number of funds to a single digit so that one can choose with less confusion. Also, make sure your asset allocation is correct

Disclaimer:  Note that these funds are pure equity funds and just because they have performed excellently in history does not make them future star performers. This is just an assumption, that they will keep doing great even in the future given their investment style and integrity in management till date. Also, you have to make sure you review your investments every year so that you throw out the laggards and pick better funds. Expect around 12-13% in the future even though they have high potential. This article should in no way be treated as an encouragement to invest in these funds. Your decision is purely yours 🙂

Comments: Which other funds did you expect in this list? Do you have other funds’ names which deserved to be here according to you? Do these funds suit your requirements?

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9 years ago

[…] Top Equity Diversified Mutual funds for 2010 – Top Equity Diversified Mutual funds for 2010 , this article given analysis on 7 top mutual funds which have impressive performance over the years […]

Rajesh Patil
Rajesh Patil
11 years ago

Hi Manish,
I have been investing in HDFC equity and UTI opportunities for past 2 years (5000 monthly each). While UTI is performing quite well, the performance of HDFC equity has been consistently going down. Also its crisil ranking / rating has degraded over this period. I am considering to move from HDFC equity to some other fund. I have 3 questions – (1) Would that be wise decision? Should I continue with HDFC equity? (2) If No, can you propose a couple of options in the same category? (3) I have over 1 lac rs invested in this fund so far. How do I move those to new fund – one time or through monthly withdrawal and monthly SIP into new fund?
Thanks,
Raj

Rajesh Patil
Rajesh Patil
Reply to  Jagoinvestor
11 years ago

Thanks Manish. Please let me know when you get a chance to look at those. Really appreciate your help and guidance.

Raj

Rajesh Patil
Rajesh Patil
Reply to  Rajesh Patil
11 years ago

Hi Manish,
Waiting for your suggestions on this.
I have compared some Large cap mutual fund performance over past 2-3 years horizon and think that BNP Paribas Equity Fund (Crisil Rank 1) and Birla SunLife Front Line (Crisil Rank 2) have been quite consistent over the period. I am more inclined towards BNP Paribas Equity Fund. Please let me know your thoughts on these 2 funds.

Raj

Aditya
Aditya
11 years ago

Manish

I am 37 yrs old and my wife is 34 yrs old and we are into IT and Law professions. Till date we have kept aside 32 Lacs in FDs maturing in 7 years. At present we have liquid cash approx 10 Lacs and unsure where to invest this money in. As you can see we have invested purely in FDs till date. I am thinking of investing 5 Lacs each in one of the above listed MFs for long term (for child education etc). Please suggest.

Thanks
Aditya

B Bhaskar
B Bhaskar
11 years ago

Sir,

I am a 43 year old male salaried employee and new to Mutual Fund. A distributor approached me and said for my age I should invest in these following schemes for a period of 17 yrs (i.e., upto my retirement age) at Rs.3,000/- pm.
a. “UTI Opportunities Fund – Regular – Growth” for Rs. 1,000/-
b. “UTI Balanced Fund – Regular – Growth” for Rs. 1,000/-
c. “UTI MidCap Fund – Regular – Growth” for Rs. 1,000/-

Please advise.

B Bhaskar
B Bhaskar
Reply to  Jagoinvestor
11 years ago

Thank you very much for the information, Sir.

Ashutosh Bhardwaj
Ashutosh Bhardwaj
11 years ago

Manish,
Can you share with us the list for 2012? Maybe it will be intresting to see how your choice varies from year on year and which MFs have been in your list consistently 😉

Ashutosh Bhardwaj
Ashutosh Bhardwaj
Reply to  Jagoinvestor
11 years ago

I am looking for the past 5 years…My current portfolio is
—HDFC Top 200 : 6k SIP
—ICICI Bluechip: 5K SIP
—Kotak Gold FOF: 2K SIP

I was thinking whether I should increase my contribution in the existing or should I pick someother.

Ashutosh Bhardwaj
Ashutosh Bhardwaj
Reply to  Jagoinvestor
11 years ago

I did and I am choosing to add Birla Sunlife Frontline equity and to diversify adding HDFC Prudence ( hope to get some more benefits from from Mr Prashant Jain :-))

deb
deb
11 years ago

thanx a lot sir for ur information abt pension plan..sir will u please tell me that what i should do for securing my financial future becoz i am working bt dnt have pension option and i am saving 1,00000 per year.my age is 40+. what i do- buy mutual fund or F.D. till now i prefer F.D. bt if u think mutual fund is more good then plz suggest name of some good mutual fund. i want riskless investment.i dont have much financial support. plz help…

deb
deb
Reply to  Jagoinvestor
11 years ago

sir, thanx for ur support.

regards..
deb

Prem kansal
Prem kansal
12 years ago

Hi Manish ,

Glad to see your suggestions and advices for innocent people in wealth management. I shall be very happy to speak to you personally .

I shall look forward for your reply soon.

Regards,

Prem

Prem kansal
Prem kansal
12 years ago

Hi Manish,

Actually i started investing in some of MF few years back . I have a mix performance from various funds. I didn’t had much knowledge about MF initially . Now I am planning to consolidate my MF portfolio . I am sure i shall able to do much better with your suggestions .I have below funds in portfolio :-
1. SBI blue chip , NFO allotment. Very bad performance.
2. ICICI Prulife Life insurance ( Life Time) Maxima …invested so far 1.6 lac , but no much gains.
3. Fidelity india special situations fund.
4.Fidelity international opportunities fund.
5.IDFC equity fund -A
6. Reliance infra fund – worst performance.
7. last one year i started investing in HDFC Top 200 , HDFC Equity & HDFC Mid cap.
I believe this is the high time to consolidate my MF portfolio in 4-5 funds in total and exit from some funds.

I shall look forward for your reply soon.

Regards,

Prem

Prem kansal
Prem kansal
Reply to  Jagoinvestor
12 years ago

Hi Manish ,

Thanks for your swift response , but i believe i should have 4-5 funds to be on safer side and should select the top ones in , diversified fund , Equity fund, etc. I am in a delamma , whether i should quit from ICICI prudential life time life insurance ULIP, Reliance Infra fund , SBI Blue chip and Fidelity international opportunities fund and divert this money to some good funds. All these funds have occupied my 2/3 MF portfolio and moving very slow. Rather Rel Infra is in -ve zone , by 18-20%. Kindly suggest the best possible route.

Regards,
Prem

Prem kansal
Prem kansal
Reply to  Jagoinvestor
12 years ago

Hi Manish ,

I am not a computer savvy person. That is why i requested for communication through email or phone. My contact no. is 9844010901.

Regards,

Vineet Rajput
Vineet Rajput
12 years ago

Dear manish,
My age is 24 and i want to invest 4-5 k per month in mutual fund.
Please suggest me that how much amount will invest in which kind of mutual fund?

ANIL KUMAR KAPILA
ANIL KUMAR KAPILA
12 years ago

Hi Manish
My feeling is that under the present condition of the market it will be better to include some balanced funds also in the portfolio.If we check the performance of diversified equity funds for the last five years we will find that some equity oriented hybrid funds have performed better.By including a balanced fund we can leave the rebalancing to the expert fund manager.
Moreover, some defensive sector funds like FMCG & Pharma can be part of satellite with around 10% allocation.
!0% allocation can also be considered for some gold saving fund.
May be considering these points you can come up with a list of 12 funds for this year.

ANIL KUMAR KAPILA
ANIL KUMAR KAPILA
12 years ago

Hi Manish
Most of the funds in this list are still among the best.However, there are some funds which have better performance than some of the funds included.Hence I would request you to revisit and update this list. Moreover,do not stick to one number. You can think of increasing the number to 12 in this year.

Haresh Makwana
Haresh Makwana
12 years ago

Dear Manish,

1 Principal Personal Tax Saver
2 Reliance Tax Saver Fund – Gr
3 Birla Sun Life Tax Relief -96 Fund – Gr
4 HDFC Taxsaver – Gr
5 Sundaram BNP Paribas Tax Saver – Gr
6 SBI Magnum Tax Gain Fund – Gr

I have total six nos.of SIP(as above ), 1000/- rs/month each,from last 2 years, and return is negative as per bad market condition. Now sugest me that continue investing in all six funds or quit from any fund. also suggest me to make balanced portfolio.

anant
anant
12 years ago

Dear Manish,

I am planning to go with the following SIP ( approx 8-10 years horizon)

1) SBI Dynamic Bond Fund (g) 5K
2) UTI opportunities Fund (G) 5K
3) Reliance Gold Saving Fund (G) 5K
4) SBI : Emerging Business Fund (G) 5K

What do you think of the planned portfolio considering that i plan to retire within 15 years. Risk taking ability : medium – High.

Thanks

Anant

anant
anant
Reply to  Jagoinvestor
12 years ago

hi Manish,

can u suggest a few … which can be part of the portfolio ? I thought 2 of the above are equity funds ….

anant
anant
Reply to  Jagoinvestor
12 years ago

thanks manish 🙂

yuvaraj
yuvaraj
12 years ago

Manish ,

I am 30yrs old.
I would like to start investing 5000 p/m through SIP.
Can you suggest best funds to me for invest .
As my time period is of 15yrs.
Also i would like to know can i increase my SIP value in perticular fund as time progresses?

Deepak Jain
Deepak Jain
12 years ago

Hello Manish,
!) Do u have any link for ur advise in investing in shares.
2) websites or links for Proper plan to purchase a house in Mumbai.
Regards,
Deepak Jain

Mr. Prakash P. Joshi
Mr. Prakash P. Joshi
12 years ago

SELECTION OF BEST OPEN ENDED EQUITY MUTUAL FUND SCHEMES AS ON 01st December,2011
SCHEME NAME CATEGORY
UTI Opportunities Large & Mid Cap
ICICI Pru Focused Bluechip Equity Retail.. Large Cap
ICICI Pru Discovery Mid & Small Cap
IDFC Premier Equity Mid & Small Cap
Magnum Emerging Business Mid & Small Cap
Tata Dividend Yield Mid & Small Cap
HDFC Equity Multi Cap
Quantum Long Term Equity Multi Cap
Tata Contra Multi Cap
Birla Sun Life MNC Others
UTI MNC Others
ALL-WITH ONLY GROWTH OPTION Please!!!

Vikrant
Vikrant
13 years ago

I have SIP of Rs.1000 each in HDFC Top200, HDFC Equity, HDFC Midcap and HDFC Taxsaver. I am planning to invest more in ELSS fund. But i am confused whether to add investment in HDFC taxsaver or go for new fund (Fidelity Tax advantage fund or other fund as per ur suggestion). This confusion arises because all my investments are in one fund house. Please suggest.

Anu
Anu
13 years ago

Hello Sir, I am new to mutual funds. In June 2011 I have started Reliance Banking Growth Plan SIP for Rs. 1000 per month. However, current NAV is less than that of NAV at the time of investment. Please, advise me whether it is a good fund and shall I continue or discontinue or switch to which fund? If I discontinue or switch what is the loss and how to recover it? I can’t take / withstand risks. Please, advise.

Thanks,
Anu

sai kumar rayapalli
sai kumar rayapalli
13 years ago

hai,
iam 35 years married have two children .so advise me to what is the best health insurance plan .which company should i select

Byju
Byju
Reply to  Jagoinvestor
13 years ago

@Jagoinvestor,
I came to your blog searching for health insurance advise. But got lost in these interesting discussion on MFs and LIC. Is there any thread on health insurance ? I am looking for a good option for my parents they are 58 and 51 years old? Kindly suggest.