10 Mutual Funds That Have Performed Brilliantly in the Last 10 Years

Mutual Funds in India are a great way to invest your money and grow it. Mutual funds are basically a pool of money that you can invest in. You don't actually own stock, but instead, buy shares in a fund that manages the money and pays out dividends based on the performance of the underlying assets. However, they do come with their own set of risks and pitfalls.

Mutual funds are managed by a fund manager who takes care of all aspects of running and managing them, including investing the funds into stocks or bonds and managing any losses incurred during trading. Mutual funds also have a lot of expenses like brokerage fees and distribution costs that need to be paid by the investors.

These expenses can really eat up a significant portion of any returns you get from these investments. While it is true that mutual funds have lower management fees than other investment options like stocks, bonds, and commodities, there's still an overhead cost associated with running them that needs to be factored into your overall returns. Hence, you should consider investing in Mutual Funds that give you high returns. 

Best Mutual Fund for 10 Years Which Have Provided Great Returns

1. Reliance Large Cap

Reliance Large Cap fund has consistently beaten its benchmark, NIFTY 100 TRI.

By looking at the portfolio of securities, we can say that the fund managers are firm believers in India’s growth story.

This is because there is heavy reliance on sectors such as financials, healthcare, engineering, etc. Some of the great companies in the portfolio are SBI, L&T, Axis Bank Ltd., ICICI Ltd., HDFC Bank Ltd., ITC Ltd., Bajaj Finance, etc.

Investment Objective

The fund has a two-fold investment objective:

• To generate long-term capital appreciation by investing in equity and equity-related instruments of companies. Fund managers also take note that the market capitalization of the securities invested in are within the range of the highest and lowest market caps of the BSE 200 Index;
• The secondary objective of the fund is to invest in debt and money market securities and seek consistent returns

2. ICICI Prudential Bluechip Equity Fund 

ICICI Prudential Bluechip Fund has a strong track record of robust performance. It has beaten its benchmark NIFTY 100 TRI since its inception.

With a major focus on key sectors and big names such as ICICI Bank, HDFC Ltd. HDFC Bank Ltd., ITC Ltd., Infosys, Motherson Sumi Systems Ltd., etc, this fund provides enough opportunities for capital appreciation in key sectors which are poised to grow (Financials, auto, IT, consumer goods).

Investment Objective

The investment objective for the fund is two-fold as highlighted below:

• The fund managers seek to generate long-term capital appreciation and income distribution through investment in Top 200 stocks (equity and equity-related instruments) in terms of market capitalization on the National Stock Exchange (NSE);
• The fund manager also puts some portion of the fund in debt securities and money market instruments

3. ICICI Prudential Bluechip Equity Fund

Though the fund is in the mid-cap space, the volatility for the fund is lower than that of the benchmark.

The expense ratio for the fund is one of the lowest at just 0.80 per cent. Given the strong fundamentals of the companies invested in (such as Bharat Financial Inclusion Ltd., Atul Ltd., RBL Bank Ltd., Ramco Cements Ltd., PI Industries Ltd., etc.), this fund becomes an ideal investment for investors having a higher risk appetite.

It would be best for investors to invest in this scheme now and wait for the next 10-year challenge! The fund would surely provide handsome returns.

4. Tata Equity P/E Fund 

Tata Equity P/E Fund has beaten the market on a consistent basis. This has been possible due to a healthy mix of large caps, and mid-caps stocks.

At the same time, the fund also invests a portion of the portfolio in money market funds.

One of the marked differences between the fund is that the exit load is zero per cent if redeemed within 18 months. This leads to motivation amongst investors to save for a longer period of time (In most funds, the exit load is 1 per cent if redeemed within 1 year). The fund invests in sectors such as financial services, automobiles, and energy. This has led the fund to beat its benchmark Nifty 50 Total Return by a significant margin throughout its 10-year history.

Investment Objective

The investment objective of the fund is to provide reasonable and regular income to investors along with possible capital appreciation.

5. HDFC Small Cap Fund 

This fund is considered one of the best small-cap funds by financial advisers and has been consistent in its performance

In 2018, there was a market correction, however, this gives us a great opportunity to invest in this scheme.

Some of its top holdings are KEC International, SKF India Ltd., NRB Bearings Ltd., Balkrishna Industries, Sharda Cropchem Ltd., and NIIT Technologies Ltd. Also, a small portion is also invested in money market instruments. Therefore, investors can think of investing in this scheme for the long term (the best would be for the next 10 years or more)

Investment Objective

The investment objective of the fund is to generate long-term capital appreciation for investors by investing in three major instruments, namely:

• Equity and equity-related instruments;
• Money market instruments;
• Equity Derivatives

6. Aditya Birla Sun Life Tax Relief 96 

ELSS not just seeks capital appreciation for the fund, but also provides investors with tax benefits. Aditya Birla Sun Life Tax Relief 96 Fund is one of the best ELSS funds available in the market today.

One of the major advantages of this kind of fund is to inculcate the habit of long-term investing amongst investors as the lock-in period for the fund is 3 years. Not just this, the exit load of the fund is NIL.

Investment Objective

Being an ELSS fund, the objective is to provide long-term capital growth along with tax exemptions to investors.

The maximum amount of exemption that can be claimed by an investor under ELSS (applicable under section 80C of the Income Tax Act, 1962) is INR 1.5 lakhs. Therefore, this fund provides a two-fold benefit to investors

• Capital appreciation and
• Tax benefits

7. ICICI Prudential Equity & Debt Fund 

This is considered one of the most stable hybrid funds and is managed by Mr S Naren and Manish Banthia, who can be considered mavericks in the field of fund management.

Secondly, strong reliance on key sectors such as finance (equity- 22.4 per cent; debt – 79.1 per cent) and energy (25.4 per cent);

Investment Objective

The investment objective of the fund is to generate long-term capital appreciation by investing in the following instruments:

• Equity and equity-related instruments;
• Fixed Income Securities

8. Mirae Asset India Equity Fund

This is a 5-star-rated multi-cap fund by Groww and has substantially beaten its benchmark over the years (table given below)

The fund has a 35% allocation in financial sectors. ICICI Bank Ltd., Axis Bank Ltd., Kotak Mahindra Bank, etc are some of the names.

Though it is a multi-cap fund, the risk for the fund is more or less similar to that of the market; Neelesh Surana along with Mr Harshad Borawake, are the fund managers and they have extensive experience in the field of fund management.

Investment Objective

The investment objective of the fund is to generate long-term capital appreciation for the investors. The fund managers achieve this by capitalizing on the potential investment opportunities in the equity and equity-related instruments.

9. ICICI Prudential Balanced Advantage Fund

ICICI Prudential Balanced Advantage Fund has beaten its benchmark, VR Balanced Fund, over the years.

Investment Objective

This scheme is also known as the Wealth Optimizer Plan. The scheme seeks to provide long-term capital appreciation and  income distribution to investors by using the following instruments:

• Equity Derivatives strategies;
• Arbitrage opportunities;
• Pure equity investments

10. DSP Tax Saver Fund

DSP Tax Saver Fund is an apt investment for people seeking twin-fold benefits of capital appreciation and tax benefits. The fund size the expense ratio is reasonable, thereby highlighting that the fund has huge potential to grow going forward.

Investment Objective

Like most other ELSS funds, DSP Tax Saver Fund too has a two-fold benefit of investing.

The first is to generate medium to long-term capital appreciation from a diversified portfolio of equity and equity-related instruments.

The second is that the fund receives benefits under Section 80 ‘C’ of the Income Tax Act- 1961

Factors To Consider Before Investing In These Mutual Funds

Before investing in any mutual funds, it is important to understand the investment horizon and financial goals of the fund.

The investment horizon refers to the time frame during which an investor plans to invest in a particular mutual fund. This time frame can range from a few months to several years, depending on how long the investor wishes to hold on to the fund before withdrawing it.

Here are a few factors to consider before you invest in mutual funds:

• Investment Horizon

The investment horizon of a mutual fund depends on how long you plan to hold them.

If you have an immediate need for funds, then you may want to consider investing in a short-term fund that will be of use for a few years. On the other hand, if you plan on investing for decades, then long-term funds would be more appropriate for you.

You can get an estimate of your returns based on your investment horizon via a SIP Investment Calculator. You would only need your monthly investment amount, expected return rate and time period to project your returns.

• Financial Goals

The main aim of buying mutual funds is to save tax and earn returns on your investments. While you can choose a fund that has a specific goal in mind, it's always good to keep an eye on the fund's performance over time and see if it meets your financial goals.

It's important to make sure that the mutual funds you invest in are appropriate for your situation. For example, if you're saving for retirement, you'll want to choose a balanced fund that invests in stocks and bonds. If you're looking for some financial flexibility, then a growth-oriented fund may be better suited for your needs.

• Risk Appetite

Mutual funds are also suitable for investors who have a high-risk appetite because they can diversify their investments across different areas and sectors at lower costs than other investment options like stocks or bonds.

• Returns

Returns are measured by the difference between what you invest and what you get back when your principal is returned to you. A good return means that your investments are generating more than what they cost you through fees and taxes paid by the company managing them (i.e., management expense ratio).

• Fees

Fees are charges imposed by an investment advisor or broker on top of what you pay directly to them. The fees charged by mutual funds vary from one scheme to another.

Most companies charge annual fees which range from 1% to 2% per year on the amount invested in the scheme. You should check out all these aspects before you invest in any scheme so that you get the maximum benefit from your money!

Conclusion

A mutual fund is a way to put your money to work in a way that you can't by yourself. This article will help you get the best mutual fund to invest in, understand its various components, and acquire a good knowledge of returns and fees.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Bavadharini KS