Nippon India Taiwan Equity Fund

Nippon India Taiwan Equity Fund has delivered exceptional returns, with a 1Y SIP XIRR of 55.58% and a 3Y SIP XIRR of 43.26%, far outpacing the category average SIP XIRR of 14.1% and 16.82% respectively. Against the NIFTY 50, the fund posted a 1Y CAGR of 135.59% versus the benchmark's -2.9%, generating a striking alpha of 135.27%. Over longer horizons, alpha remains positive but moderates, from 52.80% over 3Y to 9.40% over 10Y, indicating much of the outperformance is concentrated in recent periods.

The fund shows a low maximum drawdown of -0.45% with an average drawdown of just -0.12%, though it has experienced 5 drawdown events exceeding 10% and a lengthy 294-day max drawdown duration with 455 days to recovery. Beta of 0.55-0.66 across horizons indicates volatility well below the NIFTY 50, and downside capture of 23.73% (1Y) to 51.78% (long-term) shows it has historically lost far less than the benchmark in falling markets. Calmar ratios of 1.02 (1Y) and 0.76 (3Y) reflect solid risk-adjusted returns, though the 2022 calendar year loss of -33.37% demonstrates meaningful downside risk in weak markets.

The portfolio holds 46 stocks with a top-10 concentration of roughly 44.8% of NAV, led by ICICI Bank (8.46%), HDFC Bank (5.79%), and Mahindra & Mahindra (5.28%). Banks dominate sector allocation at 23.5%, followed by Automobiles at 7.6%, creating meaningful financial-sector concentration. Notably, the holdings are entirely Indian large-cap equities despite the fund's 'Taiwan Equity' label, which suggests a data inconsistency that investors should verify with the AMC before investing.

The fund dramatically outperforms its Sectoral/Thematic category peers, with a 3Y SIP XIRR of 43.26% versus the category average of 16.82% and a 1Y XIRR of 55.58% versus 14.1%. Calendar year returns show strong consistency in recent years — 44.27% (2023), 28.29% (2024), 57.84% (2025), and 94.52% (2026) — though 2022's -33.37% loss highlights vulnerability in adverse conditions. The persistent positive alpha across all periods from 1Y through 15Y confirms genuine long-term benchmark outperformance.

This fund suits aggressive investors with a high risk tolerance who can tolerate sharp drawdowns like the -33.37% calendar year loss in 2022 and multi-year recovery periods. A minimum horizon of 5-7 years is advisable given the 455-day recovery from max drawdown and the thematic nature of the mandate. It should be treated as a satellite allocation within a diversified portfolio rather than a core holding, and investors should first clarify the discrepancy between the fund's name and its actual Indian equity holdings.

• Exceptional SIP XIRR of 55.58% (1Y) and 43.26% (3Y), roughly 2.5x the category averages of 14.1% and 16.82%
• Consistently positive alpha across all time horizons, from 135.27% (1Y) to 9.40% (10Y), versus the NIFTY 50
• Low beta of 0.55-0.66 with downside capture as low as 23.73% (1Y), indicating strong downside resilience relative to the benchmark

• Sharp calendar year loss of -33.37% in 2022 and 5 drawdown events exceeding 10% highlight significant downside risk in weak markets
• Data inconsistency: the fund is named 'Taiwan Equity' but all top holdings are Indian large caps, requiring verification of the actual mandate before investing