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Jan 01, 2018 04:38 PM IST | Source: Moneycontrol.com

Small cap funds best performers of 2017 on returns chart; long-term gilt funds lag

Mid-cap funds category and large cap equity funds gave 44 percent and 31 percent respectively in 2017.

Himadri Buch @himadribuch

Small cap equity funds category was the best pick in 2017, delivering the highest average returns of a whopping 55.87 percent across all categories.

In comparison, S&P BSE Small Cap Index gave 60.60 percent returns.

Among the best-performing funds in 2017, SBI Small & Midcap Cap Fund topped the chart, with a whopping 80 percent gains between January and December.

“Overall (small cap) category has witnessed a rise of 50 percent. This (SBI Small & Midcap) Fund managed to contain its AUM (asset under management) as it had stopped accepting fresh investments,” Vidya Bala, Head of Mutual Fund Research at FundsIndia.

The scheme deploys a diversified portfolio of equity and equity-related securities of small and midcap companies and is managed by R.Srinvisan.

In the year gone by, Sensex and Nifty delivered 28 percent returns helping  most mutual fund schemes to offer double of that.

Mutual fund experts said that while  benchmark indices have delivered double digit returns, investors may have to rein in expectations as similar kind of returns cannot be offered every year.

Among other equity fund categories, FMCG related funds followed small cap funds with 53.81 percent returns.

Most consumption stocks had rallied after the GST  Council in its 23rd meeting  made big changes to the tax framework, pruning the tax rates on over 200 consumer items.

Market experts said that consumption sector is expected to continue its robust performance in 2018 as well.

A report from Motilal Oswal Financial Services titled 'India Strategy' stated that, "The performance of consumer-oriented sectors indicates towards a revival in consumption. We expect this trend to strengthen in 2HFY18."

"We also expect initial teething issues related to GST to normalize and trade channels revert to normalcy, especially wholesale and rural supply chains. Potential of consumption stimulus in the CY18 budget (the final budget before the general elections of 2019) could also provide a consumption catalyst."

Mid-cap funds category and large cap equity funds gave 44 percent and 31 percent respectively in 2017.

The worst hit category of 2017 were medium and long-term gilt funds with an average return of 2 percent. This category was the top performer of 2016..

MF 2017 report card

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