Top seven equity funds

Seven equity funds managed to multiply their NAV by ten times in the last five years. A big achievement considering that they also managed to outperform their respective benchmark index by a wide margin.

So how much return did these G-7 funds manage to get? SBI Contra gave an absolute return of 1227% in the last five years, SBI Global 1115%, Sundaram BNP Paribas Select Midcap 1046%, Reliance Growth 1169% and Birla Equity 913%. HDFC Taxsver and DSP equity earned a return of 925% each.

Returns were calculated as on Sep 30, 2007 and only for growth options

The year 2003 and 2005 have been major return getters for these funds. Almost 60% of the total five year returns were earned during these two years. If Rs 1000 is the total return earned by an investors, Rs 374 was earned in '03 and Rs 192 in '05. The bearish phase of 2002 was a drag with only Rs 62 earned. The years 2004 and 2006 were almost identical giving around Rs 140 each.

2003 - the year when the great Indian stock market bull run actually started (in April '03) - was a major return getter. Around 38% of overall returns earned over the five year period was achieved during the calendar year 2003. Larger exposure to midcaps helped many of these funds to give higher returns than the Sensex. During the year '03, Sensex was up 73% while ET Midcap was up by a huge percentage of 177%. During the year, all the above mentioned funds managed to give more than 100% returns. Sundaram Select Midcap gave a return of 157% in '03, Reliance Growth 156%, DSP Equity 130%, HDFC Taxsaver 121% and Birla Equity 119%.

The year 2004 saw a slower growth compared to the previous year. Around 14% of five year returns were earned during this year. Again it was the year of midcap with ET midcap giving a return of 36% as compared to 13% for Sensex. While the share price appreciation slowed down during the year, exposure to midcaps added zing to NAV prices. SBI Magnum Global (69%), SBI Magnum contra (65%) and HDFC Taxsaver (49%) were among the highest return getters in '04 and almost all the players managed to give better returns than Sensex.

Sensex hit the fast lane in '05 with the index going up by 42%. During the same period, ET midcap gave a higher return of 50%. By this time the returns between midcap and largecap indices had narrowed. SBI Global (78%), SBI Contra (71%) and HDFC Taxsaver (75%) were the top performers.

Starting 2006, the midcaps didn't see as much appreciation as the large cap index like Sensex or Nifty. In '06, Sensex was up 47% while ET Midcap was up 36%. From this year onwards outpeformance was increasingly becoming difficult for equity fund managers. While traditionally, these fund managers used the midcap route to beat sensex returns, the year 2006 was the year of midcaps. HDFC Taxsaver and Birla Equity gave lesser return than Sensex in this year while Sundaram Select midcap gave the highest return of 61%. During this year, sharp appreciation of some realty stocks benefited the Sundaram fund much more than the rest.

The nine months of year 2007 have seen almost same movement of Sensex and ET midcap - both were up 25% during the year till date. Birla Equity was the top performer with a return of 41% while SBI Global and HDFC Taxsaver lagged the Sensex returns.