How did your Mutual Fund portfolio perform in 2023?
My portfolio didn't do great, but that's somewhat understandable given the market conditions. But I wanted to compare my portfolio with other similar funds - did my portfolio fund generate better returns than other AMCs in the same market conditions? Did it do so by taking higher or lower risk? Is the performance outcome short term or has it been consistently underperforming / overperforming?
The simplest way for me to compare the returns was to do a time weighted rate of return on these funds. I am sure most AMCs do this analysis themselves, but I do not see much comparable analysis in public forums.
Which funds did I choose? Mainly the ones recommended to me by industry peers and experts. I also considered funds that had completed the full calendar year. Note that the comparisons I did are only within these funds.
Is NAV the only indicator of fund performance? Not completely. I have seen people relate higher NAVs with better historical performance. But it depends on a multitude of things, including dividend disbursements and fund strategy (Growth/Balanced/Fixed Income/Shariah) - so I wanted to compare apples to apples; Dividend adjusted NAV prices of Fixed Income funds with other Fixed Income funds, etc. Also, to make things simple, I did not take into account any style drift and only went with original fund strategies. Other factors that should be considered apart from NAV should include:
How long the fund has been active (short run luck vs long run consistency)
Fund size (lower fund sizes may have an advantage in larger IPO allocations relative to their fund size)
The risk it took to achieve these results (risk adjusted relative returns - Sharpe ratio)
However, to start with, I am only considering Dividend adjusted NAV prices, with the data sourced mainly from online sources. I will be working to take into account more parameters going forward in order to rate them more accurately. Considering the start of the year NAV at BDT 10 - what was the price by the end of the year?
Note: You can click on the legends to select/unselect the funds for one to one comparison
Income Funds
With many stocks mulling at floor price, this was perhaps the year for Fixed Income assets. High bank interest rates in deposits, as well record high T-bills/bonds should give investors considerable returns going into next year as well.
EDGE IF: From their portfolio of funds, their income fund gave the highest return.
IDLC IF: Highest return from the basket of funds I considered. Also the highest return across all types of funds.
Growth Funds
Given the market conditions, growth funds struggled this year. performing lower than income funds. With most funds on the same boat, it is difficult to asses performance when stocks have been at floor price for some time. Most funds returned between 1.5-3.5%.
With CWT: One of the CWT growth funds performed better than the others, but taking into account the relatively small size of the funds (~8.5 and 10 crs) as well as style drift., I am keeping them in the same category as the others
Balanced Funds
Compared to both Income and Growth funds - balanced funds performed relatively lower, with most funds returning between 1-2.6%
Shariah Funds
Shariah funds also did not have a stellar year. Among the 5 funds, you will once again see lower fund sizes such as CWT achieve comparably the higher return.