In order to make a better investment choice at the start of the new year in 2023, long-term equity investors who wish to begin their investments in 2023 might look into the 2022 performance of well-known equity funds, such as large cap and mid cap funds. The market offers over 25 large cap funds and over 30 large cap funds, however, deciding which fund to invest in depends on a variety of factors. A mutual fund’s past performance has no influence on its future performance, but looking at the previous performance may give you an insight into high-quality underlying securities that can survive market dynamics in a fund that has been consistently performing well and offering respectable returns in both bull and bear phase of the market. Based on an interview with CA Manish P Hingar, Founder at Fintoo, the spokesperson discussed with Livemint’s Vipul Das and highlighted the best and worst performed large cap and mid cap funds of the year 2022 going to end today.
Best and Worst Performed Large cap funds of 2022
It is important to note that the best mutual funds for one investor may not necessarily be the best for another, as different investors have different financial goals and risk tolerances. With that in mind, some large-cap mutual funds in India that have performed best in 2022 are Nippon India Large Cap Fund and HDFC Top 100 Fund. Both these funds manage AUM of ₹12,922 Crore and ₹23,453 Crore respectively and have generated returns of 13.14% and 11.69% respectively beating the category average of 4.75%. Both these funds invest primarily in large-cap stocks and have a history of outperforming their benchmark index.
Axis Bluechip Fund and Invesco India Large cap fund did not have a great inning this current year as both these have delivered negative returns of -3.95% and -0.65% respectively, while in the same period the large-cap category average return is 4.75% and the return of large-cap benchmark index which is S&P BSE 100 TRI is 6.83%.
Best and Worst Performed Midcap funds of 2022
Quant Midcap Fund and HDFC Midcap Opportunities Fund fund invests in a diversified portfolio of quality mid-cap stocks and has a strong track record of outperforming their benchmark index. These two schemes have a stellar track record of consistent performance over the long term and in the current year, Quant Midcap Fund and HDFC Midcap Opportunities Fund have delivered a return of 18.97% and 13.88% respectively, hence generating alpha in comparison to their category average return of mere 4.41%.
On the other hand, ABSL Midcap Fund and DSP Midcap Fund have been laggards as they have badly underperformed in the current year. Both these funds have given returns of -3.68% and -3.19% respectively in the current year as compared to their benchmark index and category average of 4.35% and 4.41% respectively. Adding to it, the Sharpe ratio which is the indicator of better risk-adjusted return is 0.76% for ABSL Midcap Fund and 0.68% for DSP Midcap Fund which is lesser than that of the category average of 0.91%.
Conclusion
In addition, it is important to note that current and past performance is not necessarily indicative of future results and that the value of mutual fund investments may fluctuate. Therefore, it is important to carefully consider a mutual fund’s investment strategy, fees, and risks before making an investment decision. It is important to do your own research and carefully consider your own financial goals and risk tolerance before investing in any mutual fund. You should also consult with a financial advisor or professional before making any investment decisions, said CA Manish P Hingar.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.