The categories of Flexicap, Value-Oriented, and Large and Midcap funds, together bunched in our 'Growth' category, are the mainstay of an investor's long-term portfolio. As per May end AMFI disclosures, these three combined manage assets worth over Rs 3.2 lakh crore, which is more than 29 per cent of the total assets of all equity funds and close to 10 per cent of the total assets managed by mutual funds. Here's an update on some of the prominent trends shaping these categories as well as the changes in our opinion on the funds belonging to these categories. A mixed bag of performance The performance over the last year will leave you with mixed feelings. The funds in these three categories have delivered an average 68 per cent return (for direct plans) in the last one year. Those are pretty handsome returns to get in a year's time frame, but they pale a bit when compared with the 71 per cent that the benchmark S&P BSE 500 TRI achieved in the same period. In fact, out of the 96 funds in these categories, which have more than a year's history, a little over a third have managed to stay ahead of the index. Over longer time frames though, they have done better, but the quantum of outperformance over the index has narrowed (see graph below). The trends clearly suggest that beating the benchmarks is not as much of a cakewalk as it used to be some years back. The active funds will need to pull up their socks if recent trends are anything to go by. Rest assured that we'll keep an eye on the performance trends for you. For now, you should continue to stick to these diversified equity funds to form the core of your long-term growth portfolio. And we continue to repose faith in the ones on our recommended list. Having said that, there are some changes in our opinion on some of the funds in these categories about which you can read ahead in this article. The value of value The current calendar year and the one before have seen value-oriented funds make a strong comeback after being thoroughly outsmarted by their growth-oriented counterparts in the flexicap category (see graph below). Many investors had written off the value funds due to their dismal performance in the previous years. But their recent performance underscores the importance of diversification. Different investing styles perform at different times. A comparison of the P/E scores of the value-oriented funds with those of flexi-cap/large and mid-cap
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