Mutual Funds that have performed well over the last 10 years

FundsIndia has come up with an interesting research report titled: The FundsIndia 5 Best Schemes in the History of Indian Mutual Funds.

In this report they have listed down 5 equity funds that have done well over very long periods of time, and have given a little history about them, how they made their money, and fund managing style.

The first question I had upon reading this title was how do you select the paramaters for such a report? Do you stop at returns or do you go deeper and look at other things as well?

Here are the five things that they chose to see:

1. Longevity: Funds that are at least 10 years old
2. Performance: Ability to deliver higher than benchmark returns consistently
3. Resilience: Ability to withstand market downturns better than its benchmarks
4. Stability: Consistency of fund management principles and personnel
5. Investment-worthy: Their recent performances have not caused any concern keeping them investment worthy even today.

I think these are all good parameters but in my opinion if you are evaluating hundreds of mutual funds you should describe these mathematically and then evaluate funds on them. For example, stability can be shown by the number of fund managers that a particular fund had since its inception. I don’t think they went to that level of detail although they have used numbers to evaluate the funds.

The next question I had was if you select 10 years as the cut off point – how many funds do you really have left, and in then within that how many would have a performance worthy of  a second look?

To answer this I went to the following categories on Value Research and arranged the funds in descending order of their 10 year returns.

There were two things that struck me from looking at these funds in this manner:

Sheer number and range: I was amazed to see the sheer number  and range of equity funds that have done quite well over a 10 year period. The five funds that FundsIndia selected belong to 4 different categories according to Value Research and they are usually not the highest performing funds in that category for the 10 year period.

Difference between the 5 year and 10 year return number: The large number of funds that have returned over 20% returns for 10 years is simply mind boggling, but the same funds have pitiful returns over the last 5 years. This reinforces what most readers already know – the last five years have been bad for equity investors and no matter how good your mutual fund is – if the market doesn’t do well, how can the fund do well?

Given this background, while I think the report is useful and everyone should invest the ten minutes it will take to read the report, look at the fund names, and their story – I’m not convinced that you can call these five funds the best without a shadow of doubt, and indeed can you ever select five funds that you could call that?

Read the report here: The FundsIndia 5 Best Schemes in the History of Indian Mutual Funds.

Disclaimer: FundsIndia is an advertiser on OneMint.

44 thoughts on “Mutual Funds that have performed well over the last 10 years”

  1. Hi All, am 28 years old and planning to invest 5000 per month in Mutual funds (mid cap). kindly suggest the best perfoming MFs also advise, is this good to invest all 5k in 1 MF or to invest it accross 2/3 MFs.

  2. Hello Sir

    Right now am investing 4000/- pm since Nov 2013 in the following 3 MF.
    1) SBI FMCG fund – regular plan – growth 2000/- pm
    2) Birla Sunlife frontline equity fund growth 1000/- pm
    3) Reliance equities opportunities fund growth plan growth option 1000/- pm
    What are your views regarding them

    I am planning to invest another 10k in MF. Please suggest me some 5 or 6 top performing funds.

    I have also invested in 3 ULIP for which am paying 52000/- annually since 2009. Kindly give your views regarding them also.

    Thanks and regards


  4. As long as 2008-2009 years fall under the past 5 yr performance data, the return numbers are going to be skewed to the higher side.

    The fund managers are kidding themselves (and hence the public) that they are doing something great to get these returns. It will be interesting to see these fund managers’ performance during a flatline market.

    “..get me a monkey, ask it to throw some darts to pick a a list of stocks in the index, you have a fund manager”

      1. Hi Manshu,
        In fact thought is to add mid cap fund for more aggression & diversification.

        I was invested in NFO of HDFC mid cap opportunities in 2007 & till it has provided impressive gains of CAGR 11% in 6 years.

        Sundaram select mid cap is little bit aggressive but good alternative to think for in mid cap space.

  5. I actually have 2 of these and one of them for 10 years. The one I have for 10 years I picked when I had no clue on MFs and the agent was pushing me for something else(Flexicap which was a star then). But I was lucky that my random pick worked very well but recent years its not been as good and new entrants like Reliance Growth seem to be doing better.
    MF picks should also be like equity not completely driven by experts. For example sector-based MFs are a no-no by experts but pharma has been a star performer last 2-3 years. Returns are higher than diverse funds.

    1. No Harineem.Reliance Growth is a very old Fund(more than 15Years)It,s performance during last 4 to 5 years is not at all attractive.Better do a more careful dig if you want to invest in that fund.There are better choices in the same fund category.

  6. Manshu
    Can you please let me know how to make a Table of our comments.The comments which finaly appear in the comments are just a straight line though I have entered the figures with pauses between the figures to make them more readable.

            1. Thank you sir.Incidentally I saw your blog also in the link provided bu you and liked the post.I will be in touch with your blogs also in future.Thanks again.

  7. Manshu
    As you rightly said the last 5 years data is not at all so bright.
    I give below the data for the same 5 funds which were outstanding during last 10 years according to Funds India, and their corresponding last 5 year performance.

    Last 5 Years Last 10 Years
    1.FranklinIndia Blue Chip 5% 26.2%
    2.DSP Black Rock Equity 4.4% 29.8%
    3.HDFC Prudence 8.8% 26.00%
    4.HDFC Top 7.2% 29.59%
    5.ICICI Dynamic 5.6% 26.2%

    These 5 year data has been picked up from the same article.
    I wish Funds of India had pointed out the facts which you have raised so that the euphoria is not justified.This also proves the fact that no one should blindly accept the opinions of these experts.I think they have their own axes to grind.Read them and try to do your own assesment by going a bit deeper is the moral.

    1. Sir,

      As you’ve posted in your comments elsewhere, your own gains from the past 5 years have been much better than these numbers and although I haven’t compared them to other funds I think these numbers must be better than other funds.

      So, what have you done differently that people can learn from?

      1. Lets try:

        Last 5 yrs
        Last 10 Yrs

        Franklin Blue chip

        DSP Blackrock equity

        HDFC Prudence

        HDFC Top200

        ICICI Pru Dynamic

      2. Manshu
        I think my comments elsewhere was about direct investments in equity market which I made and not in mutual funds.Frankly I dont recollect the details and cannot recall the exact comments.Did my comments appear under “SUGGEST a TOPIC”.In fact I have compared the returns from my equity investments with the returns I would have got had I invested the same amount in HDFC equity fund growth option.My returns from direct investments in equity are clear winners.If I remember right this was my earlier comment.

  8. The report says:

    “we chose these five funds as emblematic of the success of the Indian mutual fund industry”

    So it deserves only that much importance. Obviously there are many “good fund” contenders in each category considered as the report concedes.

        1. Stock picking need not be too terrifying,as long as you keep it simple .Hope your investments in Mutual Funds do good and gradually you also venture into stock picking.

    1. Hello,
      This is Vidya Bala, author of the discussed report. Thanks to Manshu for reviewing it. Pattu is right in that there are many good contenders. But as we stated, they are funds with a less than 10-year record. And since we used that as a criteria, we could not bring the ‘new heroes’ in to the list.
      Do look back to see how many funds with that record continue to perform well. We all know there were funds from the Birla, Reliance or even UTI stable with a long track record. But they all fell back a while ago. Hence, while there can be any number of good contenders, we do not know if they will survive a decade. Hence, it is more reason why these funds gain importance. They simply stood the test of time. They have seen more downfalls and more rallies and we tested them in each of these to arrive at the list.

      And to answer Manshu’s question that the five funds chosen were the the highest performers over the 10-year period – true, because the highest performers often times fell out mid-way…say in a 3-yr or 5-yr back. That is the reason why we used the criteria of not just 10 year point-to point but more recent performance and more importantly, rolling performance over long time frames.

      Tks and hope to participate in more just interesting discussions. Vidya

      1. In the last para to answer Manshu’s question – I meant the five funds chosen were NOT the highest performers in the 10-yr period…sorry for the typo. tks

        1. Thank you very much for your comments. It is rare to see anyone but a blogger engage in discussion of the comments section of a blog and I really appreciate you doing that here.

  9. Manshu
    As I read this, I cant help thinking how fund returns are all over the place– remember my question with differing returns that you’d replied to a few months back?

    I tend to think of my MF basket as my safety net, hence return plus worst case situation trends are important to me.

        1. Hmmm, I think a repeat of 2008 is possible and if it happens then all equity MFs will be affected. I think it is possible due to the fact that a lot of economic indicators are still doing very badly including the CPI number that’s been declared today.

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