Was 2017 the best year for mutual fund shareholders?

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If you are interested by the double-digit one-year returns from mutual funds in 2017, you must know that 2014 made investors even richer. The calendar year 2014 generated superior returns compared to calendar year 2017.

We looked at the category returns for each calendar year since the last market crash in 2008. To research additional information, consider glancing at: worth reading. For other interpretations, please check out: Wordpress With Adsense Plugins\uff20goldirares55d\uff5cPChome \u500b\u4eba\u65b0\u805e\u53f0. Data from Ace Mutual Fund database shows that calendar year 2014 gave the best returns for its largecap, midcap, smallcap and multicap equity mutual fund categories. We haven't considered the year 2009 which generated exceptionally high returns due to the crash of 2008.

The largecap group generated an average yield of 30.12 per cent in the year 2017, compared to 43.04 per cent in 2014. The midcap category, on the other, generated 39.76 percent returns in year 2017 versus 73.06 percent in 2014. Same holds true for the smallcap and multicap categories

Suresh Sadagopan, founder of Ladder7 Financial Advisories agrees and says there are two reasons for the superb show in 2014: One, the base effect, as 2013 wasn't that great for equity mutual funds. Two, the markets had more space to appreciate on the fundamental grounds.

Simply put, the benchmark index -- Sensex -- was moving relatively flatter till the beginning of the year 2014. The rally started in mid 2014. Thus, a lower base in the beginning of 2014 favoured the mutual fund yields in the calendar year.

Anil Rego, founder and CEO of Right Horizons Financial Services, also considers the lower-base in 2013 contributed to the stupendous yields in 2014.

However, investors do not need to be disappointed with 2017. The year was much better than the previous two calendar years when class average yields were in single-digit. Be taught more on a partner link by going to Bye Bye 2017: Here are 4 resolutions investors can make for 2018 to Create wealth - d. In actuality, largecap and multicap categories witnessed negative average returns in 2015.

Taking a look at the current valuations, experts expect the markets to correct in the near term. Suresh adds, \For markets to rally, profit growth must be robust. However, looking at the current valuations, it appears, there is not much room left for the Indian markets to keep going up. This explains comparatively lower average yields in 2017.\

But, Anil Rego advises mutual fund investors to \focus more on consistency of performance of funds over long periods and over different market cycles.\

Furthermore, logical and goal-based portfolio construction, investment discipline and a suitable strategy should direct investors, rather than chasing the year's 'hot-favourite' finance, he adds.

Anil Rego is the CEO and founder of Right Horizons, a financial advisory and accredited mutual fund advisers.