Best performing Equity Funds in August 2023

Equity Fund story in August 2023

The outperformance, or otherwise of equity funds is largely dependent on the equity markets. However, the fund managers also contribute their skills towards alpha generation. With FPI flows tapering in August, the stock market performance in August 2023 was largely range bound. Nifty remained confined in a narrow range between 19,200 and 19,600 for August. The Nifty level of 20,000 is elusive for now, as the Nifty neds to cross critical levels like 19,600, 19,800 and 20,000 before it can reclaim previous highs.

The big story in August was the dichotomy in performance between the larger stocks and the smaller sized stocks. For instance; if you look at returns in August 2023, the Nifty 50 closed -2.53% lower and the Nifty Next-50 index closed -1.92% lower. However, for the same month; the Mid-Cap 100 closed +3.71% higher and the Small Cap 100 index closed with +4.62% gains for August 2023. Even as the frontline indices showed signs of tiring at higher levels, alpha hunting continues to be the name of the game in small and mid-cap stocks. That is evident in the performance of these funds also.

Equity large-cap Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

Overall, large cap funds as a category have underperformed the benchmark index over the longer term, while outperforming in the short term. However, the top-3 ranked funds have clearly outperformed the benchmark index by a margin.

Equity multi-cap Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

Overall, multi-cap funds as a category have underperformed the benchmark index across time frames. However, the top-3 ranked funds have clearly generated alpha.

Equity flexi-cap Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

Overall, flexi-cap funds as a category have almost outperformed the benchmark index across time frames, as have the top-3 been clear index outperformers. 

Equity mid-cap Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

Overall, mid-cap funds as a category have done better than the benchmark over the longer term, but fallen short over a 1 year period. The top 3 funds beat the index by a big margin.

Equity small-cap Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

Small cap funds as a category have given a mixed performance compared to the benchmark. However, the top-3 ranked funds have clearly outperformed the benchmark index.

ELSS Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

Surprisingly, ELSS funds have overall done better than the benchmark and obviously that means that the top 3 performers have also done much better than the index benchmark. 

Equity Index Funds in August 2023

Here are top performers as of August 31, 2023; based on 5 year returns.

In the case of index funds, the outperformance is not really relevant since, these are passive funds intended to mirror the benchmark with minimal tracking error.

Reading Equity Fund story in August 2023

The month belonged to the small and mid-cap funds at the cost of the large cap funds. Large cap Equity funds generally gave lower 1-year return compared to the previous month due to the tepid performance of the Nifty. However, small cap and mid-cap funds continued to give impressive returns even over a one year period too. The impact tends to get neutralized over a slightly longer period.

There is one important aspect of these rankings we must not miss. For instance, if you are wondering how to pick winners in equity funds, there is a simple method. Generally, the winners have been winners on a consistent basis over the past few months. This makes past returns a good barometer of future performance. Barring some minor exceptions, the winners have been winners on a consistent basis and by a margin. Past performance, in this case, is actually indicative of future consistency. That is significant from an investor perspective and also from an advisory perspective.