Crisil Ltd. has released rankings of mutual funds amid a spike in volatility on account of the ongoing geopolitical crisis, inflation pressures and foreign selloff.
Piyush Gupta, director (fund research) at Crisil, outlined the top performers and their rationale on BQ Prime’s special series The Mutual Fund Show. Here are some of the key funds in the flexi-cap, mid-cap, ELSS and aggressive hybrid categories and how they fared.
Crisil ranked the IDBI Flexi Cap Fund as the number one.
The fund, Gupta said, has been delivering returns closer to top quartile or top 30 percentile in the last three-four years.
When Crisil ranks the funds, it looks at the performance and portfolio-based parameters to see how diversified it is and whether there is adequate liquidity in the underlying portfolio, he said.
IDBI Flexi Cap has a fairly diversified portfolio even at the industry level. While it’s a small fund, its diversification is closer to the category average, which is unlike other smaller funds, Gupta said. Thus, a combination of strong performance and adequate diversification has helped the fund get the highest rank.
Quant Mid Cap Fund topped Crisil’s latest rankings.
According to Gupta, Crisil looked at the portfolio over a period of time and found it was fairly concentrated. It has about 25 stocks compared to the category where there are 50-60 stocks. The fund, he said, has been able to deliver strong returns with this concentrated portfolio.
IDFC Tax Advantage Fund has been ranked one in the last four quarters, implying its performance has been fairly consistent, Gupta said.
The fund has delivered returns higher than the category as well as the benchmark across all timeframes. The portfolio has had relatively higher exposure to small caps over the three-year period, which has sort of helped in its performance. It’s also fairly diversified both at the company as well as the sector level. The liquidity in the portfolio is slightly weaker compared to the category, but that doesn’t worry Crisil.
Aggressive Hybrid Category
ICICI Prudential Equity & Debt Fund, which has moved from three to one, has very large assets under management within a category, Gupta said.
“If you were to go back, maybe the quarter before the previous quarter, it was ranked two in our rankings,” he said. That means the fund has been performing, delivering stable returns over a period of time. Its performance in three, six and nine months has been largely driven by stock selection, especially in the large-cap category.
The fund has relatively higher exposure to large caps compared to the category. Within the debt portfolio, it has taken exposure into some securities rated lower than AAA. So, performance from the large caps and relatively higher equivalent from the sub-AAA exposure has helped the fund’s performance.