How do you make sense out of the Rs.7.86 trillion Indian mutual funds (MFs) industry that comes with 50 fund houses and more than 1,500 schemes (and still counting)? After all, it’s not like investing in a fixed deposit where you put your money in any bank and your returns are guaranteed at the end of the tenor. Since MFs don’t assure returns—their fortunes are linked to the markets—it’s tough to choose one out of a plethora of options, much less to choose one that will outperform the markets, and hopefully peers, as well.
Through Mint50—a basket of 50 MF schemes across equity and debt markets which Mint recommends—we aim to help you zero in on the fund that suits you the best.
What is Mint50?
Ever since we started Mint50 in January 2010, we have strived to give you a portfolio of 50 of the strongest and well-performing MF schemes that you could choose from. Why 50? Because we don’t want to align to a few fund houses. Because 50 is an optimum number of schemes to choose from. Because different investors have different needs and a basket of 50 schemes is enough to take care of most of your needs, enroute to making an investment portfolio.
While we strive to pick schemes that not only come with a good track record but show promise, we can go wrong sometimes. In our bi-annual review (January and September), we bring in new schemes either because some of the existing schemes have been underperforming consistently or the new ones are simply better alternatives. Or sometimes, when a fund manager walks out, we remove the fund till we find confidence in the new fund manager.
How has Mint50 done?
Did we do our job well? Of a total of 50 schemes that we pick for you, we measured 32 of them against benchmark indices; the rest are so diverse, even within their categories that measuring them up against benchmark indices do not make much sense. We do not account for each individual scheme’s benchmark index, because each scheme has a different index. Instead, we assigned benchmark indices when we look at fund performances; like BSE 100 index for large-cap schemes, BSE 200 for multi-cap schemes and so on.
As on 28 January 2013, all of these 32 schemes outperformed the benchmark indices over a period of five years. We think five years is an adequate time frame that qualifies as long-term for an objective performance analysis.
Of the 50 schemes that were a part of Mint50 till the end of 2012, 43 schemes had a five-year track record. Of these, 38 schemes outperformed their respective category averages.