Top SBI mutual fund schemes turn ₹10K SIP into ₹16 lakh in 5 years—Here's how

Large array of mutual fund options
SBI Mutual Fund, which is sponsored by State Bank of India, offers a range of mutual fund schemes to invest in. Of them, three small- and mid-cap equity schemes have done fantastically well with incredible returns. For the five years ended September 2024, an SIP of ₹10,000 per month each in these schemes would have ballooned to around ₹16 lakh with annualised returns just below 40%. Here’s what you need to know.

1. SBI PSU Fund – ₹10K SIP increased to ₹15.7 lakh
The SBI PSU Direct Plan–Growth gave a magnificent 39.5% five-year annualised return. A ₹10,000 monthly SIP in the scheme would have grown into approximately ₹15.66 lakh. With a modest expense ratio of 0.72%, it continues to be one of the best equity schemes of SBI. Its niche investment in public sector firms with turnaround potential enabled it to show market-beating performance.

2. SBI Infrastructure Fund – SIP of ₹14.96 lakh
The SBI Infrastructure Fund Direct–Growth clocked a return of 37.5% annually for the same period, making a ₹10,000 monthly SIP grow to nearly ₹14.96 lakh. It had an expense ratio of 1%, capitalizing on India’s infrastructure boom by investing in ports, highways, power, and urban infrastructure projects to reap high returns.

3. SBI Contra Fund – ₹14.7 lakh via contrarian investment
The SBI Contra Direct Plan–Growth yielded 36.8% five-year annualized returns, converting a ₹10,000 SIP each month into approximately ₹14.72 lakh. The fund follows a contrarian strategy—buying value stocks or quality mid- and small-cap stocks that are undervalued or overlooked by the market. During times of turmoil, the strategy allowed it to excel. At a low cost, it provided good returns with an expense ratio of just 0.57%.

Why these funds outperformed
Only these SBI mutual fund schemes beat the pack by combining aggressive equity approaches with low cost structures. By going for high-growth themes like PSUs, infrastructure, and contrarian bets on mid- and small-cap stocks, they were best positioned to capture market cycles. Their annualised returns of 36.8% to 39.5% over five years reflect strong sector calls and smart stock choices. With expense ratios of less than 1%, investors got to retain more gains for compounding in the long run.

Things to consider before investing
Though they have a remarkable track record, these funds are accompanied by higher volatility risk characteristic of equity investments. They are ideal for investors with a minimum five-year time horizon and a high-risk profile. Compare them with your financial objectives and investment diversification plan before investing. By investing in SIP mode, you can average out market fluctuations and even out investment returns.