“What goes up must come down”– Sir Isaac Newton
The above chart just reminds us of Newton’s quote. This chart adds “vice versa” to Newton’s quote !
A decade is for sure long enough to analyse performance of a mutual fund scheme. The challenge with every analysis is to avoid confirmation bias, as we tend to move towards perceptions we already hold. Hence, to have a better understanding of the data in hand, I thought it would be better to observe first and then allow sufficient time to come up with a better analysis. Hence, this is going to be a two-part article with key observations initially and interpreting the observations would be done a bit later.
Key Observations :
- The top 6 schemes this calendar year (YTD) as on 29th of May 2020, are JM Large cap, Canara Robeco Bluechip Equity, BNP Paribas Large cap, Axis Bluechip, Invesco India Large cap and IDFC Large cap
- Schemes worth watching (meaning reasonable downside protection and medium upside capture – less of dark red in the image) are ABSL Frontline Equity, Canara Robeco Bluechip Equity, Edelweiss Large cap, ICICI Pru Bluechip, Invesco India Large cap, Kotak Bluechip, L&T India Large cap, Mirae Large cap & UTI Mastershare. These are not recommendations but observations
- Consistency seems to be a challenge except for a few schemes. Let me share more on this in the analysis part
- A two or three year of under performance gets reversed for popular schemes, but would be testing the patience of every investor. How does this impact goals is a different question, though
- Management changes, Fund Manager changes, Categorization all have impacted performances
- Though the benchmark would be irrelevant at the beginning of the decade, 17 out of 27 schemes have beaten benchmark returns in the year 2019 (CY)
- A few not so popular schemes (brands ?) have shown reasonable performance over the years by not losing money too often
Investor returns and investment returns are not the same. Let me dig more in to this data and come up with an analysis shortly.