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Diversified large-cap equity funds have fared better than Sensex over one-, three- and five-year time periods. The average one-year return for the 60 diversified large-cap schemes stood at 27.6 per cent, higher than the 25 per cent gains registered by the Sensex.
On a one-year basis, Principal Growth (41.7 per cent), Reliance Top 200 (38.1 per cent), Reliance NRI Equity (37.7 per cent), Reliance Equity (36.7 per cent) and SBI Blue Chip (35.8 per cent) featured among the top five performers.
But what helped these funds deliver stellar returns? Higher allocation towards defensive sectors such as consumer non-durables and healthcare, and lower exposure to segments whose fortunes are cyclical such as metals and power helped the outperformance on a one-year basis. Inclusion of stocks such as Hathway Cables, Divis Labs, Prestige Estates and Persistent Systems helped the fund beat the index returns for Reliance Equity.
Other funds which witnessed notable improvement in their one-year performance include Reliance Top 200, Principal Growth and IDFC Classic Equity .
Performance pattern
But, out of the 60 schemes, 17 schemes underperformed the benchmark in the last one year. For instance, HDFC Core and Satellite (18.3 per cent), Edelweiss Equity Enhancer (19.7 per cent) and IDFC Imperial Equity (20 per cent) were among the key laggards.
On a three-year basis, the category’s average returns (absolute over three years) were higher at 18.5 per cent, compared with 13.2 per cent gain by Sensex. ICICI Pru Focussed Blue Chip (38 per cent), Quantum Long Term Equity (36 per cent), Franklin India Prima Plus (32.1 per cent), Reliance NRI Equity Fund (29.9 per cent) were the top performers. But, 14 out of the 55 schemes which have been in existence for over three years, returned gains lower than Sensex.
In addition to Reliance Equity Fund (0.2 per cent decline), schemes such as Baroda Pioneer Growth (2 per cent increase), JM Equity (2.9 per cent), LIC Nomura Top 100 (3.8 per cent) and LIC Nomura Vision Fund (6.9 per cent) topped the laggards list.
The five-year average returns of the 47 schemes registered higher gains than the benchmark. Quantum Long Term Equity topped the list.
But there were funds which delivered consistent returns over all the three time periods. For instance, Birla Sun Life Frontline Equity and Reliance NRI Equity Fund ranked among the top ten over a one-, three- and five-year time frame.
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