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Large Cap Mutual Funds: Poor Returns In The last One Year


For all the hype over money pouring into mutual funds, the fact remains that since the start of the year, many large cap mutual fund schemes have given poor returns.


We are not saying all mutual fund schemes, but, most have generated lower returns than bank deposits, especially the large cap mutual funds.

Large Cap Mutual Funds: Poor Returns In The last One Year
The hoopla created over a new government and its reform process is slowly waning in the stock markets. With the hike in interest rates in the US in December looking real and corporate India's quarterly results lagging estimates, it's difficult to see how mutual funds can give solid returns in the next one year.

Take a look at some of the biggest mutual fund schemes and how they have performed this year.

HDFC Equity Fund

This is one of the biggest large cap funds in India managed by HDFC Mutual Fund. In the last one year, the fund has given negative returns of 5%. Perhaps, it has more to do with some banking names in its portfolio, which have gone nowhere in the last one year.

Infosys, State Bank of India and ICICI Bank are the top stocks in its portfolio. Unless banking stocks fire, the fund may continue to under perform.


Birla Sun Life Frontline Equity

Birla Sun Life Equity like HDFC Equity has tremendous assets under management of close to Rs 10,000 crores and is managed by Birla Mutual Fund. The fund has generated a return of just 4 per cent in the last one year. This is even below returns of bank deposits.

HDFC Bank and Infosys form almost 12 per cent of the fund's portfolio. Most of the other stocks comprise blue chip Nifty stocks.

SBI Blue Chip Fund

This funds stands out for returns in the last one year. A decent return of 9%, which compares with the deposit interest rates of banks one year ago. HDFC Bank, Maruti and Reliance make up the top holdings in its portfolio.

Reliance Focused Large Cap Fund

The one year returns from this scheme is around 6.4 per cent. This is not the best return and one could have got better returns from alternative instruments.

UTI Mastershare

The returns from this scheme has been 2.62 per cent in the last one year. HDFC, Infosys and Cummins are the top stocks in its portfolio.

Axis Long Term Equity

This has been a clear out performer in its category with returns of near 10 per cent in the last one year. HDFC Bank, Kotak Mahindra Bank and Infosys are the top stocks in its portfolio.

Clearly, large cap funds have not done too well in the last one year. The era of expecting returns in double digits consistently may have passed.

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