Mutual funds in 2016 had their shares of hits and misses. The most important thing to note is that investment awareness in equity mutual funds grew manifold in the year.
Between January and November 2016, the net inflow for equity mutual funds was Rs. 58,000 crore. For the third continuous year, one saw positive net inflows into equity-based mutual funds. While in 2015, there were 2.56 million new SIP accounts created, the numbers jumped to more than 2.7 million fresh SIP registrations for 2016, for the top 15 cities. For two and three-tier towns, fresh registrations which were 1.96 million in 2015, jumped up to 2.19 million in 2016.
Here are the top five best equity mutual funds of 2016
- HDFC Mid Cap Opportunities Fund (G) – The midcap fund came into existence on June 25, 2007 and has delivered 16.21 percent since launch. The past 1-year performance of the fund has been 9.42 percent compared to 5.17 percent of Nifty Free Float Midcap 100 (benchmark). The fund usually invests 75 percent in mid-cap companies with up to 25 percent in large caps. HDFC Mid Cap Opportunities typically looks out for companies that are growing at 15 to 20 percent with decent to good ROE (Return on Equity) and stable cash flow generation.
- Birla Sun Life Equity Fund Reg (G) – The equity multicap fund registered 13.99 percent in the past one year, as against the benchmark of 2.8 percent. Though, Birla Sun Life Equity Fund was formed on August 27, 1998, the returns since launch has been 24.25 percent. The fund manager Anil Shah, has opted for a flexi-cap approach with more inclination towards large caps. He has been associated with the fund for just 3 years but has steered the fund to give enviable returns. The top five sectors the fund invests in are financial, healthcare, technology, energy and automobiles.
- ICICI Prudential Dynamic Fund Reg (G) – The fund has delivered 11.66 percent returns as against 2.16 percent benchmark returns. ICICI Prudential Dynamic Fund, launched on October 31, 2002 has given 23.66 percent returns since its launch. Some of the top sectors this multicap fund invests in are energy, FMCG, financial, technology and communication. The top five holdings of the company, Bharti Airtel, Power Grid Corp, Tata Chemicals, Coal India and HDFC Bank helped in the fund netting high returns.
- DSP BlackRock – Micro Cap Fund Reg (G) – This small cap fund was launched on June 14, 2007 and since inception delivered 18.14 percent Over the past one year, it gave 11.95 percent as against the benchmark of 0.32 percent. The top five sectors for the fund include chemicals, textiles, engineering, healthcare and financial. About 75-85 per cent of its corpus invested in small caps, with a 15-20 percent in mid-caps.. The fund’s mandate necessitates 65 per cent of assets to be invested in stocks that do not fit in the top 300 companies by market cap, thus benefitting from flexibility in portfolio. DSP BlackRock Micro Cap Fund is a rare small-cap fund which has beaten its benchmark every single year, since 2008.
- Mirae – Asset Emerging Bluechip Fund Reg (G) – This equity midcap fund has delivered 11.02 percent in the past one year as compared to the benchmark Nifty Free Float Midcap 100 at 5.17 percent. The fund was launched on July 9, 2010 and has returned 21.37 percent since launch. Since the last three years, it has been topping its category. The mandate of the fund is such that it permits 35 percent investment in the top 100 companies by market cap, with 65 percent exposure to companies that fall beyond this purview. The flexible approach augurs well for the company, though it avoids companies with operating profit below Rs. 100 crore.