Top performing Equity Funds in October 2023

  • 04 Jun 2024
  • Read 11 mins read

What was the equity story in October 2023

It was a volatile trading month with FPI outflows at $2.95 billion in the month of October 2023. After showing a lot of promise in the 4 months to August, the foreign portfolio investors (FPIs) were net sellers to the tune of $4.5 billion in equities in September and October 2023 combined. Equity markets surely got spooked in October 2023 due to the combination of geopolitical risks in West Asia and rising bond yields in the US. For the month of October 2023, the Nifty 50 fell sharply by -2.85%, while the Nifty Next-50 index fell by -2.26% lower. Even the smaller stocks were not spared. The Mid-Cap 100 index closed with -4.10% losses while the Small Cap 100 index fell -0.77%. To sum it up, equity markets in October 2023 were all about global headwinds. Let us look at equity markets in the month of October 2023, through the lens of different types of equity funds.

 

 

How Large Cap Equity Funds performed

In this segment of equity funds, we look at the October 2023 performance of large cap funds, ELSS funs and equity index funds. These are generic large cap funds with a predominance of large cap stocks. All these rankings are based on NAVs as on 31sts October 2023. While the returns are available for 1 year, 3 years and 5 years, the rankings are based on 5 year rankings to give a longer term perspective. For simplicity we focus on Direct Plans.

Best performing Equity Large-Cap Funds

Name of Fund 

1-Year Return

3-Year Return

5-Year Return

Canara Robeco Blue-Chip (G)

8.480%

18.925%

16.730%

Baroda BNP Paribas Large (G)

10.166%

19.504%

16.291%

Kotak Bluechip Fund (G)

8.996%

19.905%

15.915%

BSE 100 (TR) Index

7.726%

20.188%

14.399%

Data Source: Morningstar

Best performing Equity linked savings schemes (Tax Saving)

Name of Fund

1-Year Return

3-Year Return

5-Year Return

Quant Tax Plan (G)

9.336%

34.694%

27.026%

BOI Tax Advantage (G)

14.728%

24.239%

21.334%

Bandhan Tax Saving ELSS (G)

15.221%

30.525%

18.681%

BSE 200 (TR) Index

7.877%

20.951%

14.958%

Data Source: Morningstar

Best performing Index Funds (Equity)

Name of Fund

1-Year Return

3-Year Return

5-Year Return

DSP Nifty-50 Equal Weight (G)

12.473%

26.062%

15.228%

Nippon India Sensex Fund (G)

6.369%

18.375%

14.202%

ICICI Pru Sensex Fund (G)

6.218%

18.230%

14.161%

Benchmark Index

N.A.

N.A.

N.A.

Data Source: Morningstar

 

Flexi Caps versus Multi-Caps: which did better?

One of the big questions is whether the idea of offering higher leeway to fund managers to manage the portfolio improves performance. Frankly, there is little evidence to show that fund manager discretion improves performance over rule-based allocation across capitalization stories. Once again, these rankings are based on NAVs as on 31st October 2023. While the returns are available for 1 year, 3 years and 5 years, the rankings are based on 5 year rankings to give a longer term perspective. For simplicity we focus on Direct Plans.

Best performing Equity Multi-Cap Funds

Name of Fund

1-Year Return

3-Year Return

5-Year Return

Quant Active Fund (G)

10.636%

31.804%

24.767%

Mahindra Manulife Multi (G)

18.315%

30.839%

22.229%

Nippon India Multi Cap (G)

23.157%

37.810%

19.103%

BSE 500 (TR) Index

9.634%

22.012%

15.353%

Data Source: Morningstar

Best performing Equity Flexi-Cap Funds

Name of Fund

1-Year Return

3-Year Return

5-Year Return

Quant Flexi Cap Fund (G)

12.296%

32.814%

24.744%

PPFAS Flexi Cap Fund (G)

21.722%

24.370%

21.850%

JM Flexi Cap Fund (G)

24.479%

30.483%

19.961%

BSE 500 (TR) Index

9.634%

22.012%

15.353%

Data Source: Morningstar

 

Looking at Alpha Stories – Mid Caps and Small Caps

Finally, we come to the alpha stories within equity, which is about mid-caps and small caps. We are not considering sectoral and thematic funds as they can be tough to compare. All these rankings are based on NAVs as on 31st October 2023. While the returns are available for 1 year, 3 years and 5 years, the rankings are based on 5 year rankings to give a longer term perspective. For simplicity we focus on Direct Plans.

Best performing Equity Mid-Cap Funds

Name of Fund

1-Year Return

3-Year Return

5-Year Return

Quant Mid-Cap Fund (G)

22.121%

38.866%

26.006%

PGIM India Mid-Cap Fund (G)

6.572%

30.064%

24.195%

MOSL Midcap Growth (G)

19.734%

36.637%

23.019%

BSE Midcap (TR) Index

24.625%

29.476%

17.721%

Data Source: Morningstar

Best performing Equity Small-Cap Funds

Name of Fund

1-Year Return

3-Year Return

5-Year Return

Quant Small Cap Fund (G)

32.050%

45.106%

29.616%

Nippon Small Cap Fund (G)

32.327%

44.289%

26.616%

Axis Small Cap Fund (G)

23.061%

33.631%

26.532%

BSE Midcap (TR) Index

29.221%

36.501%

22.180%

Data Source: Morningstar

 

What we read from the Equity Fund rankings of Oct-23

Here are some key takeaways from the October 2023 mutual fund rankings.

  1. Most funds saw their short term one-year returns impacted by the weakness in the equity markets overall. This is true for all classed of equity funds. However, the impact from a 5 year perspective is fairly limited. That is positive since it shows that the longer term impact of volatility on CAGR returns is limited.

     
  2. The ranking on each of the above category represents the best performing funds in terms of 5 year returns. However, returns in isolation only tell part of the story. For getting a broader picture, we have also looked at a comparison with the benchmark index to see if the leaders are actually doing better than the index. The top 3 performers, across most of the categories of equity funds have done better than the benchmark. That is a positive signal. However, average returns did not beat the index.

     
  3. A very interesting perspective emerges from equity mutual fund rankings across different sub-sets of equity. The big narrative is about consistency in 5-year period. The winners across the various categories have been consistent over the past months and the shifts, if any, are only marginal. That underlines that past returns in equity funds are a reliable indicator of future performance. This has key implications for financial advisors and for mutual fund investors.

In October 2023, it was only the short term equity fund returns that got impacted. The longer term returns are almost intact. However, the concerns over the rising tide of global headwinds would continue to be a major issue in November 2023 also.