Top 10 mutual funds that created wealth for domestic investors in 2016

Select mutual funds, especially funds of funds, emerged saviours for investors all through calendar 2016 even as the domestic equity market wiggled through uncertainty and multiple domestic as well as global headwinds.

A spate of outflow of portfolio money from foreign institutional investors and scars of demonetisation hurt domestic stocks through the year.

Among the best-performing funds, HSBC Brazil Fund topped the chart, with over 50 per cent gains between January and December 2016, while the benchmark BSE Sensex managed only about 0.50 per cent return during this period.

The HSBC scheme seeks to achieve long-term capital appreciation by investing predominantly in units or shares of HSBC Global Investments Funds (HGIF) Brazil Equity Fund. Anitha Rangan is the portfolio manager.

Renu Pothen, Research Head at fundsupermart.com, believes selected funds of funds will continue to give lucrative return to investors in 2017.

“We have around 30 per cent weightage to global funds in our portfolio,” she said.


Other funds such as DSP BlackRock World Mining Fund, DSP BlackRock Natural Resources and New Energy Fund and DSP BlackRock World Gold Fund soared 44 per cent, 40 per cent and 36 per cent, respectively, in calendar 2016.

DSP BlackRock World Mining Fund was launched in January 2013. It invests in units of BlackRock Global Funds - World Mining Fund. In addition to this, a significant part of its corpus was invested in units of other similar overseas mutual fund schemes. Jay Kothari manages the fund.

With an expense ratio of 3.28 per cent, DSP BlackRock Natural Resources has surged nearly 40 per cent in the past one year. Vedanta, Tata Steel, Hindalco, BPCL and RIL are among the top holdings of the fund. The fund has given highest weightage to energy (50.94 per cent), metal (35.63 per cent) and services sector (4.35 per cent).

Kotak World Gold Fund, SBI Magnum Comma Fund, Birla Sun Life Global Commodities Fund, DSB BlackRock World Energy Fund, Sundaram Rural India Fund and ICICI Prudential Banking and Financial Services Fund advanced between 18.75 per cent and 33 per cent during the same period.

SBI Magnum Comma Fund primarily invests in stocks of companies engaged in the commodity business in sectors such as oil and gas, metals, materials & agriculture.

On the impact of demonetisation and top picks for 2017, Dhirendra Kumar, CEO, Value Research, said in an interview with ETNow, “The demonetisation pain should ease over time.”

For optimistic investors, Kumar suggested funds like Mirae Asset Emerging Bluechip Fund, L&T India Value Fund, ICICI Value Discovery Fund, Birla Sun Life Equity Fund and Franklin India High Growth Companies.