Who are the consistent performers in the MF industry?

One of the key parameters to shortlist funds is their consistency in generating alpha.

An analysis done by Cafemutual reveals that 57 equity funds across categories have consistently beaten their benchmark. These funds have generated alpha at least four times over a seven-year period in terms of 5-year performance.

Sectoral/thematic funds include 27 such schemes, which have beaten their 5-year benchmark returns on more than four occasions. Small-cap funds have 8 such schemes, while 7 mid-cap schemes have achieved this feat.

The analysis compared the 5-year regular plan returns of all active equity schemes over the last 7 financial years, from FY19 to FY25, against their respective 5-year benchmark returns during this period.

Here is a category-wise breakdown of the most consistent alpha-generating schemes:

Large Cap

Canara Robeco Bluechip Equity Fund has emerged as the most consistent alpha-generating scheme in this category. It has beaten its 5-year benchmark returns in 5 out of the last 7 financial years.

Axis Bluechip Fund is the only other large-cap scheme that has been able to beat its 5-year benchmark returns on 4 occasions during this period.

Large and Mid Cap

No large & mid cap scheme has been able to beat its 5-year benchmark 4 or more times in the last 7 years. The most consistent schemes in this category include ICICI Pru Large & Mid Cap Fund, HDFC Large & Mid Cap Fund, Mirae Asset Large & Mid Cap Fund, and Kotak Equity Opportunities Fund, which have beaten their benchmarks three times in seven years.

Flexi Cap

Three regular plan schemes — Quant Flexi Cap Fund, Parag Parikh Flexi Cap Fund, and JM Flexi Cap Fund  have beaten their 5-year benchmark returns in 6 out of the last 7 financial years, generating alpha for their investors. PGIM India Flexi Cap Fund and Canara Robeco Flexi Cap Fund are the other consistent alpha-generating schemes, having beaten their benchmarks 4 times during this period.

Multi cap

Quant Active Fund (earlier known as Escorts Growth Fund) is the most consistent alpha-generating fund in this category having beaten its benchmark in all of the last 7 financial years. As this category was introduced in the year 2020, we have also considered the schemes which have generated alpha on their 5-year benchmark returns in 3 of the last 5 financial years.

These schemes include Nippon India Multi Cap Fund, Edelweiss Recently Listed IPO Fund and Baroda BNP Paribas Multi Cap Fund, each of which have beaten their 5-year benchmark thrice in the last 5 years.

Mid Cap

Nippon India Growth Fund has emerged as the most consistent alpha producing scheme in this category with higher returns than its 5-year benchmark in 6 of the last 7 financial years. Motilal Oswal Midcap Fund and Axis Midcap Fund are the second-most successful schemes in this category which have generated alpha on their 5-year benchmark returns in 5 of the last 7 financial years.

Other alpha-generating schemes include Quant Midcap Fund, Edelweiss Mid Cap Fund, PGIM India Mid Cap Opportunities Fund and Invesco India Mid Cap Fund, each of which have beaten their respective benchmarks in 4 of the last 7 financial years.

Small cap

The only scheme which has generated alpha on its 5-year benchmark returns in each of the last 7 financial years is Nippon India Small Cap Fund. Axis Small Cap Fund and SBI Small Cap Fund are the next best schemes who have beaten their 5-year benchmarks 6 times in this 7-year period. Other frequent alpha-generating schemes in this category are listed below:

Value fund

The top performers in this category are Nippon India Value Fund and JM Value Fund which have been able to beat their 5-year benchmark 6 times in the last 7 financial years. ICICI Pru Value Discovery Fund has also emerged as a useful alpha-generating fund for its investors offering a higher return than its 5-year benchmark 5 times in this period while Bandhan Sterling Value Fund has been able to match this feet 4 times in this time.

Contra funds

Three contra funds have been prominent in the last 7 years, all generating alpha at least 4 times in the last 7 years. While Kotak India EQ Contra Fund has given its investors higher returns than its 5-year benchmark on 5 occasions, the other two funds, Invesco India Contra Fund and SBI Contra Fund have matched this feat 4 times.

Dividend yield funds

Templeton India Equity Income Fund and Sundaram Dividend Yield Fund have emerged as the most consistent alpha generators in this category beating their 5-year benchmarks 5 times and 4 times in this 7-year period, respectively.

Focused funds

Five schemes have emerged as consistent alpha generators in this category. 360 One Focused Equity Fund is the leader in this segment with a better than 5-year benchmark return in 6 financial years in this period. Quant Focused Fund is the second-most consistent fund in this segment with alpha generation on 5 occasions in the last 7 years. Sundaram Focused Fund, SBI Focused Equity Fund and Axis Focused Fund have also generated alpha 4 times in this period.

Sectoral/Thematic funds

The category with the highest schemes has also seen the highest number of consistent alpha-generating schemes. Five schemes, two each from Aditya Birla Sun Life MF and SBI MF and one scheme from Quant MF have generated alpha for its investors in each of the last 7 financial years.

These schemes are Aditya Birla Sun Life Digital India Fund, Aditya Birla Sun Life India GenNext Fund, SBI Infrastructure Fund, SBI Technology Opportunities Fund and Quant Infrastructure Fund. 7 other schemes have generated alpha on their 5-year benchmark returns on 6 occasions. These include SBI Consumption Opportunities Fund, Mirae Asset Great Consumer Fund, Invesco India Infrastructure Fund, Invesco India PSU Equity Fund, Bank of India Manufacturing & Infrastructure Fund, Nippon India Pharma Fund and SBI Magnum COMMA Fund. The list of the 27 sectoral/thematic funds which have generated consistent alpha in this period is shown below: