Top 10 mutual funds for doubling your wealth over time
Mutual Fund Investment: The Indian mutual fund industry is on a remarkable growth trajectory, with assets under management (AUM) doubling over the past five years, growing from Rs 22.26 lakh crore in 2019-20 to Rs 67.09 lakh crore in October 2024. Predictions for the year point to sustained momentum, driven by rising retail participation, favorable market conditions, and robust inflows into equity mutual funds.
Large-cap funds are expected to attract more interest as investors seek safer options amid market valuation concerns. Sectoral and thematic funds, focusing on high-growth industries like technology, healthcare, and renewable energy, are also anticipated to perform well, making mutual funds a key wealth creation tool for long-term investors, and emphasizes the potential of these funds in achieving financial goals through disciplined investing.
The impressive growth of mutual funds over the last decade reflects the strength of the Indian market and wealth creation opportunities available for long-term investors.
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“Funds like Nippon India Small Cap, with a 10-year return of 23.5%, and Motilal Oswal Midcap Fund, yielding 21.6%, demonstrate the potential of small- and mid-cap investments in capturing substantial gains across market cycles. The performance also underscores the importance of efficient fund selection in achieving desired goals. At Tailwind Financial Services, we emphasize the value of consistent returns over time, and these figures highlight our belief in mutual funds as a robust vehicle for wealth creation. With disciplined investment, a well-diversified portfolio can outperform and safeguard against volatility,” informs Vivek Goel, Joint MD of Tailwind Financial Services.
According to Tailwind Financial Services, the following 10 mutual funds have delivered stellar returns over the last five years, outperforming many others in the market. These funds are ranked based on their 5-year returns, with insights into their performance over the last 10 years as well for a broader perspective.
1. Quant Small Cap Fund
- 5-Year Return: 47.4%
- 10-Year Return: 21.9%
- Overview: Quant Small Cap Fund has led the small-cap category, delivering substantial returns over the past five years. This fund focuses on high-growth potential small-cap stocks, though it may involve higher risk due to volatility in smaller companies.
- Ideal for: Aggressive investors looking for maximum growth through small-cap exposure.
2. Quant Infrastructure Fund
- 5-Year Return: 37.9%
- 10-Year Return: 20.4%
- Overview: Focusing on infrastructure, Quant Infrastructure Fund benefits from India’s rapid development in this sector. The fund’s high returns reflect the booming growth of construction, industrial, and related sectors.
- Ideal for: Investors looking for sector-specific growth with a focus on infrastructure.
3. Nippon India Small Cap Fund
- 5-Year Return: 36.6%
- 10-Year Return: 23.5%
- Overview: One of the leading funds in the small-cap category, Nippon India Small Cap Fund has demonstrated consistent growth due to its focus on emerging small companies with high growth potential.
- Ideal for: Long-term investors with a high-risk tolerance seeking aggressive growth in the small-cap space.
4. Quant Flexi Cap Fund
- 5-Year Return: 35.5%
- 10-Year Return: 21.2%
- Overview: With flexibility to invest across different market caps, Quant Flexi Cap Fund adapts to changing market conditions, balancing stability with growth opportunities across various sectors.
- Ideal for: Investors wanting diversified exposure to both large and small companies.
5. SBI Small Cap Fund
- 5-Year Return: 29.1%
- 10-Year Return: 22.7%
- Overview: SBI Small Cap Fund offers a diversified portfolio of small-cap stocks. With its strong long-term track record, this fund is popular among investors seeking long-term growth in the small-cap segment.
- Ideal for: Aggressive investors aiming for high returns in smaller, high-growth companies.
6. Axis Small Cap Fund
- 5-Year Return: 29.4%
- 10-Year Return: 20.6%
- Overview: Axis Small Cap Fund focuses on smaller companies with a potential for rapid growth, providing investors with a chance to gain from emerging businesses.
- Ideal for: Investors looking to add high-growth small-cap stocks to their portfolio.
7. HSBC Small Cap Fund
- 5-Year Return: 31.0%
- 10-Year Return: 20.4%
- Overview: With a diverse portfolio of small-cap companies, HSBC Small Cap Fund has delivered solid returns over the past five years. It targets emerging companies with high-growth potential.
- Ideal for: Long-term, risk-tolerant investors focused on capital appreciation.
8. DSP Small Cap Fund
- 5-Year Return: 31.2%
- 10-Year Return: 20.4%
- Overview: DSP Small Cap Fund has a solid track record of consistent returns by focusing on small-cap companies. The fund’s performance indicates strong management and smart stock selection.
- Ideal for: Investors who prefer stability and consistency in the small-cap segment.
9. Motilal Oswal Midcap Fund
- 5-Year Return: 32.4%
- 10-Year Return: 21.6%
- Overview: Motilal Oswal Midcap Fund provides exposure to mid-cap companies with significant growth potential. Mid-cap funds offer a balance between stability and growth, and this fund has consistently outperformed its peers.
- Ideal for: Investors looking for a balanced approach between large-cap stability and small-cap growth.
10. Edelweiss Mid Cap Fund
- 5-Year Return: 30.9%
- 10-Year Return: 20.8%
- Overview: This fund invests in mid-cap stocks with high growth potential. Edelweiss Mid Cap Fund has outperformed other mid-cap funds, proving its strong management and portfolio strategy.
- Ideal for: Investors with a moderate to high risk tolerance looking for solid growth within the mid-cap space.
Why These Funds Stand Out
These funds have delivered above-average returns by targeting sectors and segments with strong growth potential, such as small-cap, mid-cap, and sector-specific funds. These funds are suited for investors who:
- Have a Long-Term Investment Horizon: Many of these funds involve higher risk but offer substantial rewards over longer periods.
- Are Comfortable with High-Risk Investments: Small- and mid-cap funds, while rewarding, come with market volatility.
- Seek High Growth Potential: These funds are designed for aggressive growth, ideal for investors focused on wealth accumulation.
Conclusion
The mutual funds listed above have demonstrated strong returns over the past five years, outperforming many peers. However, “remember that past performance doesn’t guarantee future results. Investors should conduct thorough research and consider their risk tolerance, investment goals, and financial situation before investing. Consulting with a financial advisor can also be helpful in aligning these funds with personal financial objectives,” advises Goel.
Disclaimer: The perspectives and suggestions outlined above are provided by Tailwind Financial Services and do not represent the official stance or policy of FinancialExpress.com. Readers are advised to consult qualified financial advisors before making any investment decision. Reproducing this content without permission is prohibited.