Ten Equity Mutual Funds for Investments in 2024

The Indian equity market entered 2024 on a strong note. The benchmark BSE Sensex ended the 2023 calendar year with gains of 18.7 percent while the BSE Mid Cap Index was up 45.5 percent during the year. The small cap index gained 47.5 percent. In comparison, the benchmark index had gained just 4.4 percent in 2022 while the small-cap index had lost around 2 percent and the mid-cap index had gained only 1.4 percent in CY22.

While analysts see a further rise in the broader equity market in 2024 thanks to the possibility of a further decline in interest rates in the USA, there could be sector rotation as we saw in the year 2023. For example, power, infrastructure and automotive stocks outperformed in 2023 after being laggards in the previous year. In comparison, private sector retail banks and FMCG stocks underperformed after their good show in the 2022 calendar year.

This is reflected in the performance of equity mutual funds. The mutual funds with exposure to the rally leaders beat their benchmark while those with high exposure to laggards underperformed. 

Also Read: Ten small-cap stocks that could shine in 2024

Sector rotation is normal in an equity market and mutual fund investors should churn their portfolio at least once every year. This ensures that you are always invested in mutual fund schemes with the potential to beat its benchmark. 

The recent trend in the market suggests that 2024 could belong to technology and FMCG stocks, which is good news for sectoral and thematic funds focused on these sectors.

Here are ten equity mutual funds that have been among the top performers both over a five-year period and in the last one year. Their long-term consistency and a diversified portfolio of quality large, mid and small stocks can turn them into chartbusters in the 2024 calendar year.

1. At the top of our list is Quant Large and Mid-Cap Fund which has been among the top-performing funds over a five-year period with 22.53 percent CAGR return. It performed relatively well in 2023 as well with a 32.35 percent return in the last 12 months. The fund with assets under management of around Rs 1300 crore has a balanced portfolio with investments in stocks such as Reliance Industries, NMDC, Aurobindo Pharma, Adani Power and Hindustan Petroleum.

2. Tata Small Cap Fund is the second MF on our list with 25.63 percent CAGR returns in the last five years. The fund with an AUM of around Rs 6350 crore has also done well recently and has delivered 33.8 percent returns in the last year. It is expected to do well in 2024 as well given its diversified portfolio of small-cap stocks such as IDFC, Quess Corp, BASF India, Radico Khaitan and CE Infosystems.

3. Kotak Emerging Equity Fund is next on our list with 22 percent CAGR returns in the last five years and an equally good show in the short and medium term. The fund has given 30.6 percent returns in the 2023 calendar. It’s a mid-cap-oriented fund with an AUM of nearly Rs 36,530 crore currently. It has a well-diversified portfolio with investments in stocks such as Supreme Industries, Solar Industries, Persistent Systems, Oberoi Realty and Cummins India.

4. Kotak Small Cap Fund is next on our list with 26 percent CAGR returns in the last five years and 34.4 percent returns in the last one year. As the name suggests it’s a small-cap fund with an AUM of Rs 13,400 crore currently. Its top five equity holdings are Cyient Ltd, Ratnamani Metals & Tubes, Carborundum Universal, Century Plyboards and Blue Star.

Also Read: Seven ways to save and grow your money

5. Quant Flexi Cap Fund is another consistent performer in our list with 27 percent CAGR returns in the last five-year and 29.5 percent returns in the last one year. The fund with an AUM of Rs 2460 crore currently invests across all kinds of stock but its portfolio is tilted towards large-cap stocks. The top stocks in its portfolio include Reliance Industries, Adani Power, Jio Financial Services, Maruti Suzuki and Aurobindo Pharma.

6. Aditya Birla Sunlife Digital India Fund is next on our list with 25.9 percent CAGR returns in the last five years and 35.4 percent return in the 2023 calendar year. A sectoral fund with an AUM of Rs 4285 crore, it invests in large-cap stocks in technology and telecom sectors. The top five stocks in its portfolio include Infosys, Tata Consultancy Services, HCL Technologies, Bharti Airtel and LTIMindtree.

7. ICICI Prudential Technology Fund is next on our list with 24.6 percent CAGR returns in the last five years and 27 percent returns in the last one year. As the name suggests it's a sectoral fund with an AUM of around Rs 11,600 crore currently. The fund largely invests in top-tier IT, technology and communication companies. The top five equity holdings in the fund include Infosys, Tata Consultancy Services, Bharti Airtel, HCL Technologies and Tech Mahindra.

Also Read: It's time to book profits in equity

8. PGIM India Mid-Cap Opportunities Fund is another consistent performer in our list with 24.4 percent CAGR returns in the last five-year and 20 percent returns in the last one year. The fund with an AUM of Rs 9800 crore currently invests in mid-cap stocks. The top stocks in its portfolio include Phoenix Mills, Max Healthcare Institute, Tube Investments of India, TVS Motor Company and Abbott India.

9. Tata Digital India Fund is next on our list with 24 percent CAGR returns in the last five years and 32 percent returns in the 2023 calendar year. A sectoral fund with an AUM of Rs 8605 crore, it invests in large-cap stocks in technology and telecom sectors. The top five stocks in its portfolio include Infosys, Tata Consultancy Services, Tech Mahindra, HCL Technologies and LTIMindtree.

10. Kotak Emerging Equity Fund is next on our list with 21.2 percent CAGR returns in the last five-year and 27.5 percent returns in the 2023 calendar year. It is a thematic fund with an AUM of around Rs 600 crore currently and largely invests in large-cap stocks in the consumption sector. The top five stocks in its portfolio include Bharti Airtel, ITC, Hindustan Unilever, Avenue Supermarts and Godrej Consumer Products.

Happy Investing!

(Disclaimer: This article is for information purposes only. Readers are advised to consult a certified financial advisor before investing in any of the funds or securities mentioned above.)

(Karan Deo Sharma is a Mumbai-based finance and equity markets specialist)

Also Read: Ten mid-cap stocks for investment in 2024

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