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The three top-performing funds launched in 2023-24

We look at the performance of actively managed equity funds launched last financial year

The 3 top performing mutual funds launched in 2023-24

It rained NFOs (new fund offers) in the financial year just gone by. A staggering 176 new mutual funds - of which 114 are equity funds - were rolled out for investors, the highest in the last five years. In terms of inflows, these new funds pocketed a cool Rs 39,427 crore (as of February 2024) from investors, second only to FY2022. There was a massive appetite for thematic and multi-asset funds, with SBI Energy Opportunities Fund being a standout, raising an impressive Rs 6,547 crore during the launch period.

But given our general stance against NFOs, for they have no history and track record, we wanted to check if these newbies have hit the market running. Granted, they are too young for an examination, but we decided to scan the performance of actively managed equity funds (excluding thematic funds as they have a limited number of stocks to choose from) with at least a three-month history.

Of the 20 funds that fit our criteria, only three slotted in the top 25 per cent of top performers in their respective categories based on our classification:

  • ITI Focused Equity Fund
  • NJ Flexi Cap Fund
  • Motilal Oswal Small Cap Fund

Off to a good start

These three actively managed equity funds find themselves in the top quartile of their respective categories

Fund name Launch date Return since inception Category average Rank
ITI Focused Equity Fund 19-Jun-2023 27.75 23.76 18/75
NJ Flexi Cap Fund 05-Sep-2023 30.65 15.44 2/78
Motilal Oswal Small Cap Fund 26-Dec-2023 2.24 0.05 6/35
Note: Returns as of March 26, 2024.
The flexi-cap category encompasses both flexi and focused funds, as per VR classification.

ITI Focused Equity , launched last June with a mandate of investing in up to 30 stocks only, has delivered 27.75 per cent since its inception, compared to its average peer's 23.76 per cent. Much of its success can be attributed to its current affinity for the energy sector, wherein its recent PSU (government-owned entities) picks - Satluj Jal Vidyut Nigam (SJVN) and ONGC - have experienced a significant rally. Likewise, its capital goods investments, particularly its timely entry into Sterling and Wilson, have proven beneficial.

ITI Focused Equity Fund's standout stocks

Top three stocks based on returns from June 30, 2023, to February 29, 2024. BSE 500 TRI delivered 22.8 per cent during this period.

Stock Average allocation (%) Return (%)
Suzlon Energy 3.01 195.8
MCX India 3.15 150.9
Kaynes Technology India 3.67 96.3
Note: Portfolio data as of February 2024. Stocks held for more than seven months have been considered.

NJ Flexi Cap has got off to a flying start, gunning out over 30 per cent returns since its launch last September. In contrast, the average flexi-cap fund has grown around 15 per cent during this time. As a result, NJ's flexi-cap offering - these funds have little to no restrictions and can invest in companies of all sizes - is ranked second in its category, thanks to its brave bet on the IT sector (30 per cent allocation compared to the category average of just 9 per cent). Despite the headwinds in IT, the fund's picks - Oracle and Persistent Systems - have been significant heavy lifters, along with its top holding in the defence space, HAL.

NJ Flexi Cap Fund's frontrunners

Top three stocks based on returns from September 30, 2023, to February 29, 2024. BSE 500 TRI delivered 16.4 per cent during this period.

Stock Average allocation (%) Return (%)
Oracle Financial Services Software 9.02 86.7
Oil India 11.15 82.9
Nippon Life India Asset Management 1.84 57.2
Note: Portfolio data as of February 2024. Only stocks held since the inception of the fund have been considered.

The third on the list is Motilal Oswal Small Cap Fund . Launched in December 2023, this young turk is undergoing a trial by fire. Mandated to invest at least 65 per cent in small caps, the fund has had to douse multiple fires faced by the small-cap universe in recent weeks. On paper, while its 2.24 per cent return since inception reads meagre, the average small-cap fund's 0.05 per cent performance during this time should be held up for comparison. Robust performance in the services sector (17 per cent allocation compared to the category's 12 per cent) and capital goods sector have helped the fund outpace its average peer.

Motilal Oswal Small Cap's driving force

Top three stocks based on returns from Jan 31, 2024 to Feb 29,2024.BSE 500 TRI delivered 1.7 per cent during this period.

Stock Average allocation (%) Return (%)
Triveni Turbine 3.58 32.3
Inox Wind 2.8 26.1
Zomato 2.36 18.6
Note: Portfolio data as of February 2024. Only stocks held since the inception of the fund have been considered.

Notable mentions

Samir Arora and Kenneth Andrade, reputed money managers, re-entered the mutual fund arena in the last few months. However, their performance has been mixed so far. While Arora's Helios Flexi Cap has remained ahead of its peers and benchmark, Andrade's Old Bridge Focused Equity Fund has yet to find its footing.

Veterans and their funds

Scheme Launch date Return since inception Category average Rank 3M return
Old Bridge Focused Equity  24-Jan-2024 -1.6 3.26 81/81
Helios Flexi Cap  13-Nov-2023 15.56 13.31 24/80   6.97
Note: Returns as of March 26, 2024

Before we conclude, we'd like to reiterate that these are very young funds, and their few months-long performance is not a reliable indicator of future success. A good fund earns its stripes only if it consistently outperforms its rivals and benchmarks over five to seven years.

Also read: These 18 schemes delivered 75-110% returns in the last 12 months


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