A champion wins once, but legends have been winning for time immemorialand they will win in the future. That is the only way to distinguish the most steadily performing and most rewarding mutual funds (MFs) from the others. One of the tell-tale signs of an excellent MF is its security portfolio. When the collection of securities of a MF is highly diversified, there is a good chance that the MF will be able to ride out market volatilities and offer higher than benchmark returns to the investors.
Here’s a list of the top 7 mutual funds with high returns for every novice and veteran investor –
1. SBI small cap fund
It is a small cap equity fund. In the last 5 years, the SBI small cap fund has providing a return of a whopping 30.37%. However, between Feb 2014 and Feb 2015, the fund had lost over 24.47% of its asset value and the same was repeated between 2018 and 2019. In spite of the high volatility, the fund was able to yield more than four times the investment value for the investors.
If you have a high-risk appetite, with an inkling for the thrill, invest in SBI Mutual Fund today! The best way to ride the high volatility out is by investing in the fund for a long period (7 to 10 years). Since it has only 40 stocks in the fund portfolio, the SBI small-cap fund is a high risk-high return investment. It has the potential to pull through both the bear and bull phases.
2. Tata Digital India fund
It is an equity technology fund that was incepted in 2015. Within the relatively short period, it has managed to garner the attention of veteran and novice investors alike. While most of the other equity funds have delivered negative returns between 2017 and 2018, the Tata Digital India fund has provided 26.08% returns. Although it is lower than the Benchmark, it is one of the best performing funds in the category.
The period between 2016 and 2017 was the worst for Tata Digital India, but in the 2015 to 2018 period it recuperated from the losses and offered 12.08% in terms of its 3-year returns. Experts consider funds like the Tata Digital India a hedge against the depreciation of the value of INR. Most of its value is based on the profits of international IT companies that depend on foreign currencies. If your risk appetite is high, you should invest in the Tata Digital India for at least 7 to 10 years.
3. L&T Midcap Fund
If you are looking for the powerhouse in the mid-cap range, then L&T Midcap Fund is going to be your first choice. In the last 5 years, it has compounded over 25.15%, which is considerably higher than the average benchmark of 17.54%.
The L&T Midcap Fund has allocated 78% of its assets in mid-cap and 10% in small caps. At the same time, the fund has invested heavily in engineering, constructions, and chemicals instead of the proverbial banking and finance sectors. 2018 has been one of the worst years for L&T Midcap Fund. However, if you believe you can stomach the volatility, L&T Midcap Fund should be your ideal choice for a 10 year investment period.
4. Mirae Asset Tax Saver
The Mirae Asset Tax Saver fund is a SIP scheme for all investors, who want to invest small amounts every month. It currently offers an average return of 16.35% for a period of 3 years.
It has a highly diverse portfolio. Mirae Asset Tax Saver has invested the lion’s share of its assets in large-cap funds off-late. In fact, due to its high reliance on large-cap industries, Mirae Asset Tax Saver fund has been able to stave off the volatility in the last couple of years. Although the returns have not been as impressive as most funds that rely on small and mid-caps excessively, the Mirae Asset Tax Saver is a safe but rewarding choice for investors with moderately low-risk appetite.
5. Axis Long Term Equity
Axis Long Term Equity is a SIP investment scheme that offers around 11.76% returns for a 3-year investment period. With a long and impressive history of operations, the Axis Long Term Equity fund has proven to be a stable and rewarding choice for novice investors.
The Axis Long Term Equity is mostly into large-cap stocks. With a highly diversified portfolio and its reliance on large-cap funds, it takes away a considerable part of the investment risks. In the past, it has been able to outlive the market vulnerabilities by virtue of its higher diversification levels.
6. SBI Magnum Multi-Cap Fund
The SBI Magnum Multi-Cap Fund has had a glorious run since September 2005. This moderately high risk mutual fund offers around 15.12% return on 10-year investments, which is higher than its benchmark. Its top holdings are in banking, construction, and petroleum products.
It is a joint venture of SBI and Amundi, an asset management company from Europe. It is the ideal choice for those with low to moderate appetite for risk. The SBI Magnum Multi-Cap investment scheme is set to follow a bottom-up approach for picking stocks and choose the companies across different styles and sectors.
7. Kotak Standard Multicap Fund
The Kotak Standard Multicap Fund aims to provide long-term capital gains from a highly focused portfolio of equity and equity related schemes. The Kotak Standard Multicap Fund scheme is best for medium-term investments. This scheme has been performing steadily since its inception in 2009.
Although, the Kotak Standard Multicap Fund currently promises high returns, investing in this particular scheme might be riskier than investing in other multi-cap funds. Its past performance is not an indicator of its future health. Different plans of the Kotak Standard Multicap scheme have different expense structures. Kotak Standard Multicap Fund has allocated 37.13% of its asset to Financial Services, 14.35% to energy and 8.06% to IT.
All the seven mutual fund schemes we have mentioned here have not only outperformed competitors in their respective sectors, but they have also provided steadily high returns to their investors in the long-term. After you assess your appetite for investment risk, you should think about mitigating the risk of investing in a particular fund by adjusting the period of investment.