Three categories of funds generating best SIP returns

The year 2017 was one of the best years of the equity market and mutual funds. In the same year, the mutual fund industry body i.e. Association of Mutual Funds in India (AMFI), started ‘Mutual Funds sahi hai’ campaign. Nonetheless, those, who have been lured by the campaign, may not have the same feeling as such that ‘Mutual Fund sahi hai’. They must be disappointed by the returns that are being generated by their mutual fund schemes.    

In the last three years, most categories of the funds have underperformed the returns provided by bank fixed deposits. There are three categories of funds that have generated negative returns even in a five-year period. The worst part is that the banks and financials that form almost one-third of the index have also generated a negative return in the last five years. So, if an investor has started investing in these funds in 2015, they might be witnessing negative returns on their investment.

However, all is not lost for the investors. Those who have taken a contra call in the year 2017 and have invested in pharma funds, performed better in a three-year period. Even IT and International funds have generated superior returns. One of the main reasons for such outperformance is their better performance recently. After the fall in March, companies from these categories are the fastest to recover, which is reflected in the performance of funds dedicated to such sectors.  

Following is the table that shows SIP returns of the fund on an average from different categories in the past three-year and five-year period.