India’s best performing mutual funds for June 2022

In June 2022, the Nifty fell by -4.85%. This comes on top of -3.03% in May 2022 and -2.07% fall in April 2022. June 2022 also marked the fourth consecutive month that the Nifty gave negative returns. The pressure was also visible in the smaller indices. In June 2022, the mid-cap index fell by -6.24% while the small cap index fell by -8.29%, as smaller stocks saw their vulnerability exposed in a highly volatile market.

FPI selling continued relentlessly in June 2022 with FPIs selling of $6.43 billion on top of $5.86 billion selling in equities in the month of May 2022. The selling got amplified after the RBI went aggressive on rate hikes. During the latter part of the month, the market did attempt a bounce from lower levels, but the weakness in the Indian rupee, which cracked beyond the 79/$ mark, only worsened the scenario for the equity markets.

During June 2022, the 10 year bond yields started around the 7.4% mark but shot up to a high of 7.62% before scaling back to the range of 7.3% to 7.4%. In the last 2 months, the bond yields had shot up from 6.8% to 7.4% with negative impact on bond values. However, in June, the impact on the bond values have been largely stable, as yields topped out on hopes that the RBI and the Fed may go slow on rate hikes to prevent an outright recession.

1.      Equity Large-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Canara Robeco Blue-Chip (G)	-2.068%	13.165%	12.375%
Axis Blue-Chip Fund (G)	-6.848%	9.213%	11.892%
ICICI Pru Blue Chip (G)	4.458%	11.857%	11.093%
Data Source: Morningstar

2.      Equity Multi-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Active Fund (G)	3.652%	26.179%	19.278%
Mahindra Manulife Multi (G)	0.455%	17.715%	12.269%
Sundaram Multi Cap (G)	4.006%	14.099%	10.618%
Data Source: Morningstar

3.      Equity Mid-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Mid-Cap Fund (G)	6.834%	26.893%	17.106%
PGIM India Mid-Cap Fund (G)	5.197%	28.775%	15.391%
Axis Mid-Cap Fund (G)	-2.005%	17.494%	15.228%
Data Source: Morningstar

4.      Equity Small-Cap Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Small Cap Fund (G)	-0.654%	36.188%	18.006%
Axis Small Cap Fund (G)	7.301%	24.018%	17.263%
SBI Small Cap Fund (G)	5.230%	23.413%	16.961%
Data Source: Morningstar

5.      Equity Linked Savings Schemes (Tax Saving)

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Tax Plan (G)	4.985%	29.025%	19.014%
BOI AXA Tax Advantage (G)	-4.404%	19.349%	14.224%
Mirae Asset Tax Saver (G)	-0.673%	15.693%	13.882%
Data Source: Morningstar

6.      Balanced Funds (Aggressive Allocation)

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Absolute Fund (G)	6.858%	23.615%	16.638%
ICICI Pru Equity & Debt (G)	15.205%	16.137%	12.748%
BOI AXA Mid and Small (G)	-2.580%	18.914%	10.935%
Data Source: Morningstar

7.      Balanced Funds (Conservative Allocation)

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Regular Savings (G)	5.162%	8.386%	7.685%
Kotak Debt Hybrid (G)	3.648%	9.890%	7.611%
Canara Robeco Hybrid (G)	1.816%	8.534%	7.339%
Data Source: Morningstar

8.      Arbitrage Funds (Cash-Futures)

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Kotak Equity Arbitrage (G)	3.889%	4.418%	5.153%
Nippon India Arbitrage (G)	3.642%	4.284%	5.133%
Edelweiss Arbitrage Fund (G)	3.802%	4.425%	5.121%
Data Source: Morningstar

9.      Government Securities Funds (Gilt Funds)

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Edelweiss G-Sec Fund (G)	1.656%	6.502%	7.201%
DSP G-Sec Fund (G)	1.826%	6.826%	6.616%
IDFC G-Sec Fund (G)	0.663%	6.392%	6.527%
Data Source: Morningstar

10.  Corporate Bond Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ABSL Corporate Bond (G)	2.900%	6.995%	7.132%
HDFC Corporate Bond (G)	2.286%	6.705%	6.918%
L&T Triple Ace Bond (G)	1.380%	6.648%	6.897%
Data Source: Morningstar

11.  Credit Risk Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
ICICI Pru Credit Risk Fund (G)	4.458%	7.683%	7.284%
HDFC Credit Risk Fund (G)	3.321%	7.575%	6.893%
Baroda Credit Risk Fund (G)	12.416%	7.843%	6.609%
Data Source: Morningstar

12.  Liquid Funds

Top performing Regular Plans (Growth Option) on 5-year returns (as on 30th Jun-22):

Name of Fund	1-Year Return	3-Year Return	5-Year Return
Quant Liquid Plan (G)	3.836%	4.734%	5.668%
IDBI Liquid Fund (G)	3.633%	4.277%	5.433%
Mahindra Manulife Liquid (G)	3.597%	4.173%	5.373%
Data Source: Morningstar

In June 2022, like in the previous couple of months, the equity fund returns over a 1-year period were negatively impacted across large caps, mid-caps and small caps. The impact was more intense in mid cap and the small cap funds where short term returns fell steeply. There were several reasons for the same, but volatility in oil prices and the currency rates did most of the damage for the smaller funds.

The geopolitical risk and the inflation risk were seen abating during the month of June 2022. However, FPI risk-off outflows and rupee weakness were the big challenges amidst central bank hawkishness. The good news is that the equity and debt fund rankings have largely maintained consistency of top performers across categories. This makes the rankings a reliable barometer and decision point for investors.

On the debt funds front, unlike in previous months, the bond yields were relatively more stable. Hence, the impact on short end funds was negligible and on the longer end funds was minimal. We have a scenario where bond yields are going up and it remains to be seen if investors will once again show a preference for debt funds over equity funds. That still remains an open-ended question.