As the year draws to a close, we give you the award winners of Worst Five Equity Mutual Funds of 2016
- Reliance Equity Opportunities Fund – In the past one year, the returns of this fund have been negative at -7.56 compared to the benchmark return of 2.60 percent and category average of 3.64 percent. One of the major reasons for the dismal performance is a higher degree of allocation to cyclical sectors like engineering, consumer goods, services; etc. This equity multi-cap fund was formed on March 28, 2005 and since launch, has given 17.73 percent returns. However, the performance since the past four quarters have left a lot to be desired.
- Birla SL – MNC Fund – This fund’s performance took a beating since the last two years, especially since the past one year with negative returns at -4.92 percent. It is a veteran mutual fund, launched on April 22, 1994 and has returned 19.36 percent since it was launched. With pharma and FMCG stocks taking a dip in the MNC category, most MNC funds have performed dismally in 2016. FMCG stocks were particularly hit by rising valuations and insipid recovery in consumption.
- IDFC – Premier Equity Fund – This fund has performed negatively in 2016, giving -3.46 percent in the past year, as against the benchmark returns of 2.58 percent. The fund was launched on September 15, 2005, and the returns since launch has been 18.71 percent. Emphasis on cyclical sectors like FMCG, engineering and services turned to be a dampener for this midcap fund. Also, the fund manager Kenneth Andrade suddenly made an exit, which hurt the performance of the fund. Anoop Bhaskar, who is credited with bolstering the returns of UTI Midcap fund, has taken over the fund manager of IDFC- Premier Equity Fund, since April 2016.
- Axis Long Term Equity Fund – At one point of time, Axis Long Term Equity Fund was rated as the number one tax saving equity mutual fund. But this ELSS fund’s performance in the past one year has been sub-par, giving -1.68 percent returns against the benchmark of 2.80. The fund launched on December 29, 2009 has given 16.83 percent returns since 2009. One of the reasons for the mediocre performance is that some of the scripts chosen by the fund manager did not do well for 2016. Also, sectoral weightages given to consumer durable, engineering, services and FMCG did not yield good returns.
- UTI Equity Fund – This equity-based large cap fund gave -0.45 percent returns since the past one year, which is lower than the benchmark of 2.60. UTI Equity Fund was launched on May 18, 1992 and has returned 11.84 percent since launch. It has been seen that since Anoop Bhaskar, the fund manager left UTI, the performance of the fund began to go down. As the new fund manager Ajay Tyagi joined in January 2016, there are high expectations from him. As for now, the UTI Equity Fund is one of the worst performing equity mutual funds of 2016.