This equity mutual fund generated over 20% return in last one year

Indian stock markets are trading near their 52-week lows, which is around 15% below their all-time peak. The benchmark indices had tried to break through the peak but failed. And given the bearish sentiments globally, the indices are unlikely to test the level anytime soon.

Simply put, the benchmark indices are just about flat over the level a year ago.

If we look at the universe of equity mutual funds, which largely mimics the public market as a bulk of those funds are invested in the stock market by their nature, out of 20-odd equity MF categories just a handful have managed to stay above water.

Just five categories, including three thematic fund categories—PSU, dividend yield and consumption—managed to eke out some gains. The other two were infrastructure-focused MFs and small-cap schemes. These five categories just about managed under 5% return.

But some funds within these were outliers.

In particular, in the PSU thematic fund pack, the CPSE Exchange Traded Fund, which invests mainly in the shares of government-owned companies, churned out almost 23% growth in the last one year.

The Nippon India-managed open-ended fund had assets of over Rs 18,000 crore as of May 31, 2022. It was a true outlier even within its peer group funds run by Aditya Birla Sunlife, SBI and Invesco.

So, where did the best-performing equity MF of last one year invest?

If we look at where the CPSE ETF invested, we get a list of 12 stocks. The fund was heavyweight on energy as well as on materials, capital goods, and metals and mining.

In terms of stocks, it was heavy on NTPC, Power Grid and ONGC. These three stocks comprised around 60% of its portfolio.

Lower down, it was bullish on Coal India and Bharat Electronics. Both these stocks comprised over 10% of the assets.

Other PSU stocks in its portfolio were NMDC, NHPC, Oil India, NBCC, NLC, SJVN and Cochin Shipyard.