2018 Performance Report of Goalwise Recommended Mutual Funds

P.S. Performance reports for previous years can be found here - 2017 and 2016.

2018 was a peculiar year for the stock markets and Mutual Funds.

The benchmark indices diverged from each other in their direction.

BSE Sensex which is made up of large cap stocks (i.e. stocks of big companies) was up 7.2% (including dividends) for 2018 while BSE Midcap (representing stocks of mid-sized companies) was down at -12.5% and BSE Smallcap (representing stocks of small-sized companies) was down even more at -23%!


Generally midcaps and small caps go in the same direction as large caps (with higher magnitude both ways) but in 2018 they went in an opposite direction (with higher magnitude).

(Although, in hindsight, some of it can be explained by the fact that the previous year i.e. 2017 mid and small cap had had a good run with returns upwards of 50-60%.)

Mutual Funds themselves saw a lot of changes primarily necessitated by SEBI's recategorisation norms because of which some funds were merged while many others had to re-orient their portfolios in order to comply with the new rules.

As a result, the average actively managed large cap equity fund in 2018 lost 2.4% thus underperforming Sensex by about 9%!.

The average multi-cap fund clocked -6.3% while the average Mid & Small Cap fund returned -14% (better than their benchmarks though).

How did our recommendations do?

Average. Like most Mutual Funds, this was a down year for us as well (as advisors and investors both) but this is bound to happen once in a while.

Post recategorisation, almost all of our funds turned out to be multi-cap funds and some of them outperfomed and some under-performed, thus bringing the overall performance close to the multi-cap funds category average.

Two of the equity funds in high risk category were small cap funds and there also one did better while the other did worse than the category average.

On the debt side, we did better than your FD and twice as good as your savings account.

We successfully side-stepped the whole IL&FS fiasco in our recommended debt funds and while there were a handful of negative days, overall the returns were slightly more than a 1 year FD.

If you have been investing with Goalwise, the actual CAGR number that you see on your dashboard could differ from those shown above depending on when you started investing and the flow of your investments (SIP, lumpsum etc).

As I have maintained in the past years when we did better that we can't expect each year to be positive. In fact 1 out of every 3 years has been negative for the stock markets historically.

In the short term, returns from the stock market can fluctuate a lot but as your time horizon increases, they tend to become more stable.

Ups and downs are part of investing and instead of worrying about Sensex etc we should make sure that we are always investing according to our goals and risk profile.

Recommendations for 2019

We will be out with our updated recommendations for 2019 soon.

The new recommendations will be according to SEBI's new classification norms which is expected to result in a lot of changes as several funds now no longer belong to same the category they used to earlier.

P.S. Performance reports for previous years can be found here - 2017 and 2016.