Share Market

Growth Funds can be best described as a diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts. Portfolio companies would mainly consist of companies with above-average growth in earnings that reinvest their earnings into expansion, acquisitions, and/or research and development. Most growth funds offer higher potential capital appreciation but usually at above-average risk. Growth funds are more volatile than funds in the value and blend categories. The companies in a growth fund portfolio are in an expansion phase and they are not expected to pay dividends.

It is very difficult to rank all mutual funds since there are various categories of mutual funds like debt funds, tax saving funds, index funds, etc. and an apple cannot be compared to an orange. Since we are calculating Growth Funds, only schemes that have greater than 60% but less than 75% exposure mid cap stocks is taken under consideration. The Top-10 Growth Funds based on the performance of last 12 months, as researched by ICRA, is given below:

1. Sundaram Select Midcap

2. HDFC Mid?Cap Opportunities Fund

3. Birla Sun Life Dividend Yield Plus

4. Birla Sun Life MNC Fund

5. UTI Master Value Fund

6. Birla Sun Life Buy India Fund

7. DSP BlackRock Small and Midcap Fund

8. Kotak Midcap Fund

9. SBI Magnum Sector Funds

10. Reliance Long Term Equity Fund

The Top-10 Growth Funds based on the performance of last 36 months, as researched by ICRA, is given below:

1. ICICI Prudential Discovery Fund

2. HDFC Mid?Cap Opportunities Fund

3. Birla Sun Life MNC Fund

4. UTI Master Value Fund

5. DSP BlackRock Small and Midcap Fund

6. SBI Magnum Global Fund 94

7. Sundaram Select Midcap

8. UTI Mid Cap Fund

9. SBI Magnum Sector Funds

10. ICICI Prudential Emerging STAR Fund

The ranking is done not only on the basis of return to shareholders but also on parameters like:

• Risk?Adjusted Return

• Portfolio Concentration Characteristics

• Liquidity Analysis

• Corpus Size

• Average Maturity

• Credit Quality

This kind of approach of investment based scheme classification holds more relevance as asset allocation and investment pattern determines the risk level associated with the schemes and also serves as an indicator of the fund manager’s investment style. The net result is that these rankings reflect market realities, thereby serving as an effective guide to the users.