Mutual fund category that has given highest return in year 2017

Selecting a right mutual fund for investment is not an easy task. They are organised into different categories such as style, market cap wise, objective, strategy etc. This categorisation and their returns expectation help you to select the right funds that will ultimately help you to decide on your asset allocation to achieve your goals.

The year 2017 has been good for the equity market and leading indices have generated returns of over and above 30%. This has also helped mutual fund companies to attract record inflows into equity mutual fund. This process helped to create a virtuous circle wherein more funds get attracted to the mutual fund fuelling surge in the equity market. So, which are categories that have generated best returns year to date (December 21, 2017).

 
Schemes dedicated to small-cap stocks have outperformed all other categories in the last one year. This category of funds has generated highest returns year to date, this is followed by FMCG sector fund. The best part is that almost all category of funds on an average have successfully beaten their benchmark. Even the worst performer, Pharma funds have managed to give positive returns compared to the negative returns generated by the Nifty Pharma index in the same period. All the calculations are based on price return index (PRI) and not total return index (TRI). Comparing returns based on TRI may narrow down the outperformance, yet we see funds outperforming respective indices.