5 mutual funds we think are brought to you by Santa's elves
The year 2018 has been full of volatility and surprises for Indian investors. The NSE benchmark Nifty had opened at 10,531.70 on January 01, 2018, and registered a high of 11,760.20 on August 28, 2018, before losing out all of its gains to trade at 10,754.00 as on December 21, 2018.
The year was particularly difficult for investors in the mid-cap and small-cap segments. The BSE Mid-cap and the BSE Small-cap have nosedived 14.4% year-to-date (YTD) and 23.9% YTD, respectively. The carnage in the mid- and small-cap stocks was mainly caused by heavy selling by fund houses owing to new categorization of mutual fund schemes, market watchdog Sebi’s GSM/ASM circular, change in equity taxation, governance issues, and the recent IL&FS crisis, among others.
|
Index |
NAV |
1-month (%) |
YTD (%) |
3-years (%) |
5-years (%) |
|
Nifty 50 |
10,754 |
2.2 |
2.1 |
11.0 |
11.3 |
|
S&P BSE Sensex |
35,742 |
2.2 |
4.9 |
11.4 |
11.1 |
|
S&P BSE Mid-Cap |
15,253 |
2.5 |
-14.4 |
11.6 |
18.3 |
|
S&P BSE Small-Cap |
14,634 |
2.0 |
-23.9 |
7.8 |
18.1 |
(Returns as on December 21, 2018; Source: ACE MF/>
Nonetheless, the news is not all negative as the current sell-off has provided investors with a chance to enter and invest in the mid-cap and small-cap schemes.
Investing in mutual funds via Systematic Invest Plan (SIP) is the best way to create wealth in the long-term and SIPs are the perfect way to invest a fixed amount regularly in mutual fund schemes. Investors get the benefit of Rupee Cost Averaging and the power of compounding, thus getting to beat the inflation while learning about disciplined investing.
Here is a list of 5 funds delivered by Santa’s elves for people wanting to start investing in mutual funds and creating wealth in the long term.
|
Scheme Name |
AUM |
Absolute |
CAGR Return |
Value of Rs10,000 per month SIP (in Rs lakh) |
|||
|
1 Y (%) |
3 Y (%) |
5 Y (%) |
3 Y |
5 Y |
10 Y |
||
|
ICICI Pru Equity & Debt Fund(G) |
26,566 |
-2.2 |
11.8 |
15.6 |
4.1 |
7.8 |
25.3 |
|
Axis Bluechip Fund(G) |
3,295 |
6.5 |
12.8 |
14.6 |
4.4 |
8.0 |
-- |
|
Tata Equity P/E Fund(G) |
5,021 |
-7.0 |
15.2 |
21.0 |
4.1 |
8.3 |
27.4 |
|
Franklin India Prima Fund(G) |
6,374 |
-8.2 |
11.5 |
21.4 |
4.0 |
8.0 |
31.0 |
|
IDFC Tax Advt(ELSS) Fund-Reg(G) |
1,689 |
-9.2 |
12.1 |
16.4 |
4.1 |
7.9 |
26.1 |
(Returns and SIP values as of December 21, 2018; AUM as of November 30, 2018; Source: ACE MF)
- ICICI Prudential Equity & Debt Fund
- It is an equity-oriented balanced fund which tactically allocates between debt and equity based on the market outlook to ensure an optimal risk-reward ratio.
- The fund increases its exposure to debt when the equity markets are overvalued and increases its allocation to equities when it is undervalued.
- Investors who want to follow a balanced approach, i.e. 65% equity and ~35% debt, can invest in the scheme to create wealth in the long term.
- Axis Bluechip Fund
- It is an equity fund which primarily invests in the top 100 stocks by market capitalization. The fund invests in companies which have significant market share and are leaders in their respective industries.
- The fund’s strategy is to invest in quality companies with credible management, sustainable profit growth & cash flow, and a clean balance sheet.
- Investors who want to primarily invest in a diversified portfolio comprising large-cap stocks can invest in this fund to create wealth in the long term.
- Tata Equity P/E Fund
- It is a value-conscious equity fund that aims to invest 70-100% of its AUM in stocks whose 12-month rolling price-to-earnings (PE) ratio is lower than the 12-month rolling PE ratio of the BSE Sensex. The remaining AUM is allocated to other equity and debt instruments.
- Investors who are value-conscious and want to invest in large-cap and mid-cap stocks can invest in the fund to create wealth in the long term.
- Franklin India Prima Fund
- It predominantly invests in small-cap and mid-cap stocks that tend to exhibit higher growth than large-cap stocks.
- It aims to identify and invest in companies that are at an early stage in their business life cycle as they have an enormous potential to grow.
- Investors who want to primarily invest in mid-cap stocks can invest in this fund to create wealth in long-term.
- IDFC Tax Advantage (ELSS) Fund
- This fund is a tax-saving fund, i.e. an equity-linked saving scheme (ELSS), that invests across market cap. The fund manager follows a blend of growth and value style of investing and uses a bottom-up approach to select its stocks.
- Investors who want to save tax and invest in a diversified portfolio across market caps can invest in this fund to create wealth in the long term.
- So what are you waiting for? It is time to pull up your Christmas socks and start on the journey of wealth creation one SIP at a time.
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