Two Mutual Funds That Outperformed the Index in 2024

Two Mutual Funds That Outperformed Index

Even though there are over 2,500 mutual fund schemes in India, choosing the best one feels too much because such funds perform well under different parameters. However, one parameter is universally accepted by every investor-‘Returns’. More specifically, the ability of a fund to provide consistent performance over and above its benchmark index. Two mutual funds that outperformed the index and are among the best mutual funds in 2024 are today’s blog coverage.

Detailed video:

 

Why is this Important? 

It is because it will probably work better to just invest in the index rather than waste the money on the expense ratio that fund managers charge if the mutual fund is not managed to beat the index. Therefore, the salient question is: which funds have continually done better than their index?

I found two mutual funds that were able to give higher returns than their benchmark consistently. So Today, I will reveal the names of two mutual funds that outperformed the Index, along with a comprehensive analysis in order to help you make wise decisions that can help you create a winning portfolio. Stay tuned till the end as I will also explain how these funds managed to maintain their performance superiority.

 

Two Outperforming Mutual Funds (Best Mutual Funds in 2024).

1. Nippon India Small Cap Fund

2. Parag Parikh Flexi-Cap Fund
   
   

But before that, let me highlight the historical returns of these funds.

Fund Returns

The two funds have very good returns year on year and are consistently better than their benchmarks. It is this trait of having proven track records that makes them stand apart from a number of other mutual funds.

Nippon India Small Cap Fund Returns-

 

Parag Parikh Flexi-Cap Fund Returns-

 

The Secret Behind Mutual Funds’ Returns

All is in the portfolio. A good portfolio is one which can minimize the downside risk. For example, in recent market corrections, many portfolios went red. Just those portfolios that remained in the green despite the slowdown, were better structured. In simpler words, a good portfolio means lower downside risk.

 

Measuring Downside Risk: Sortino Ratio

The Sortino Ratio is one of the most significant metrics in evaluating downside risk. A higher Sortino Ratio implies that there is lesser downside risk in the fund. To view the performance of Nippon India Small Cap Fund against Parag Parikh Flexi-Cap Fund, we calculated and compared their Sortino Ratios against their peers. A higher ratio denotes better risk-adjusted returns while a safer investment in times of market correction.

 

 

Evaluating Portfolio Turnover Risk

While the Sortino Ratio appears high, the turnover ratio must also be assessed. It measures the frequency with which the fund manager buys and sells stocks in the portfolio. A high portfolio turnover ratio could be interpreted by many as indicating greater risks since it could imply that the manager is more inclined to short-term instead of long-term benefits. It is, therefore, appropriate to look at the measure side by side with the Sortino Ratio.

Key Takeaways

Nippon India Small Cap Fund and Parag Parikh Flexi-Cap Fund have always been in a position to outperform their benchmark on a long-term scale. Both funds have low downside-risk portfolios that include the pretty impressive Sortino Ratio.

Both manage their risks very well since they do not turn portfolios so often, ensuring stability and long-term growth.

 

Conclusion

Nippon India Small Cap Fund and Parag Parikh Flexi-Cap Fund shine through as consistently performing, high-risk managing, and well-thought portfolio strategies. Understand metrics, analyze portfolios, and you too can make informed choices and select winning mutual funds for your investment goals.

As always, solid research with diversified investments brings the magic to wealth creation. So take your time analyzing the metrics and invest wisely.

 

DISCLAIMER: NOT a buy or sell recommendation. No investment advice is given. Past returns are not the guarantee of future returns. The content is purely for educational and information purposes only. Always discuss with an eligible financial advisor before investing.