Keeping in line with Morningstar’s tradition, we are proud to present the annual Morningstar Fund Awards. In addition to rewarding fund managers and Asset Management Companies, the awards are also designed to help investors identify the most exceptional funds and fund companies.
Looking purely at the short term fund performance is often misleading for investors. We at Morningstar are firm believers of the philosophy that long term wealth creation happens through investing in funds that offer good risk-adjusted returns over longer time periods. Such funds tend to offer more predictable returns across market cycles and investors in general tend to have a more uniform investing experience by investing in such funds.
The objective of the quantitatively driven Morningstar Fund Awards is to recognize those funds and fund groups that have added the most value within the context of a relevant peer group for investors over the past year and over the longer-term. Do note, this is distinct from the qualitative ratings issued by Morningstar’s research team.
Risk adjusted Performance Matters!
The awards are annual, so we believe it is appropriate to emphasize a fund’s one-year performance. However, we do not believe that it serves investors well to give awards to funds that have posted a strong one-year return, but have otherwise not delivered good results for investors. Therefore, while the awards methodology emphasizes on the one-year track record, but funds must also have delivered strong three- and five-year returns after adjusting for risk within the awards peer groups in order to obtain an award.
We further use other filters, such as the funds must have been at least in the top half of their respective peer groups in at least three of the past five calendar years. We believe this combination will ensure that the awards are given to funds which have earned strong one-year results, and have also shown they have the ability to earn strong long-term returns without undue risk.
Morningstar Category Awards
These awards are given to the funds with the best risk-adjusted performance within their respective categories as highlighted above, subject to an additional qualitative review. In order to ensure this, Morningstar analysts carry out effective qualitative checks on potential winners to ensure that the performance can be sustainable going forward too. Upon the completion of all the screens, the nominees and winners will be arrived at.
We are excited to announce the nominees for Category awards in 2018:
Best Large-Cap Equity Fund
- ICICI Prudential Nifty Next 50 Index
- Mirae Asset India Opportunities Fund
- SBI Blue Chip
Best Small/Mid-Cap Equity Fund
- L&T Midcap
- Mirae Asset Emerging Bluechip
- SBI Small & Midcap
Best Short-Term Bond Fund
- Aditya BSL Short Term
- HDFC Short Term Opportunities
- ICICI Prudential Ultra Short Term
Best Intermediate Bond Fund
- Aditya BSL Treasury Optimizer
- ICICI Prudential Income Opportunities
- Kotak Flexi Debt
This year's crop of nominees delivered strong returns to investors by sticking to their fundamental investing approach. These managers have exhibited the discipline and skill that successful investing demands and they've also demonstrated a strong commitment to investors. Our nominees have generated solid past performance, and we think they'll do well in the future too.
Good luck to all the nominees. We shall be announcing the winners in a few weeks.
