7 Equity mutual funds offer over 15% of funds that invest in the stocks of multiple companies on behalf of the investor and help diversify their risk. Equity mutual funds can offer high returns in the long term, as they benefit from the growth potential of the stock market. However, equity mutual funds also come with higher volatility and risk, as they are subject to market fluctuations and uncertainties. Hence, equity mutual funds are well-suited for investors with a robust risk tolerance and a prolonged investment horizon.
7 Equity mutual funds offer over 15% in three
In this article, we will look at seven equity mutual funds that have offered over 15% annualized returns in three, five, seven, and 10 years, as of December 31, 2023. These funds have been selected based on their CRISIL rankings [^2^][2], which consider various factors such as performance, risk, consistency, portfolio quality, and fund manager experience. We will also discuss the features, benefits, and risks of each fund and how they can fit into your investment portfolio.
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1. Nippon India Small Cap Fund
The Nippon India Small Cap Fund is a small-cap fund that invests in stocks of companies that are outside the top 250 by market capitalization [^3^][3]. The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of small-cap companies that have high growth potential and are undervalued by the market. The fund follows a bottom-up approach to stock selection, focusing on the fundamentals, business prospects, and competitive advantages of the companies.
The fund has delivered a stellar performance over the years, outperforming its benchmark and category average by a wide margin. The fund has given 41.02%, 32.11%, 24.87%, and 20.18% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023 [^3^][3]. The fund has also maintained a low expense ratio of 0.83% and a moderate portfolio turnover ratio of 38.64% [^3^][3].
The fund is suitable for investors who are looking for high returns in the long term and are willing to take high risks and bear high volatility. The fund can be a good addition to a diversified portfolio, as it can capture the growth potential of the small-cap segment, which is often overlooked by mainstream investors. However, the fund also carries higher risk, as small-cap stocks are more prone to market fluctuations, liquidity issues, and regulatory changes. Therefore, the fund requires a long-term investment horizon of at least five to seven years and regular monitoring of the portfolio.
2. Parag Parikh Flexi Cap Fund
Parag Parikh Flexi Cap Fund is a flexi cap fund that invests in stocks across market capitalization, sectors, and geographies [^4^] [4]. The fund follows a value-oriented and contrarian approach to investing, seeking to identify undervalued and out-of-favor stocks that have strong fundamentals and growth prospects. The fund also invests in international stocks, mainly in the US, to diversify its portfolio and benefit from global opportunities.
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The fund has been a consistent performer, delivering superior returns over the long term. The fund has given 38.61%, 29.64%, 23.69%, and 19.37% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023 [^4^] [4]. The fund has also maintained a low expense ratio of 0.65% and a low portfolio turnover ratio of 17.54% [^4^] [4].
The fund is suitable for investors who are looking for long-term capital appreciation and are willing to take moderate to high risks and bear moderate to high volatility. The fund can be a good choice for investors who want to diversify their portfolio across market segments, sectors, and geographies and benefit from the value-investing philosophy of the fund manager. However, the fund also carries some risk, as it may underperform in the short term due to its contrarian approach and may face currency risk and regulatory risk due to its exposure to international markets. Therefore, the fund requires a long-term investment horizon of at least five years and a periodic review of the portfolio.
3. SBI Small Cap Fund
SBI Small Cap Fund is a small cap fund that invests in stocks of companies that are outside the top 250 by market capitalization [^5^] [5]. The fund aims to provide long-term capital growth by investing in a diversified portfolio of small-cap companies that have strong business models, competitive advantages, and growth potential. The fund follows a blend of growth and value investing styles and adopts a bottom-up approach to stock selection.
The fund has been a top performer in its category, delivering impressive returns over the long term. The fund has given 37.84%, 28.97%, 23.32%, and 19.05% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023 [^5^] [5]. The fund has also maintained a low expense ratio of 0.69% and a moderate portfolio turnover ratio of 40.21% [^5^] [5].
The fund is suitable for investors who are looking for high returns in the long term and are willing to take high risks and bear high volatility. The fund can be a good option for investors who want to invest in the small-cap segment, which offers higher growth potential and a lower valuation than the large and mid-cap segments. However, the fund also carries higher risk, as small-cap stocks are more sensitive to market movements, liquidity constraints, and regulatory changes. Therefore, the fund requires a long-term investment horizon of at least five to seven years and regular tracking of the portfolio.
4. HDFC Flexi Cap Fund
HDFC Flexi Cap Fund is a flexi cap fund that invests in stocks across market capitalization, sectors, and themes. The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related instruments that have strong fundamentals and growth prospects. The fund follows a growth-oriented and bottom-up approach to stock selection, focusing on the quality, sustainability, and scalability of the businesses.
The fund has been a consistent and stable performer, delivering decent returns over the long term. The fund has given 32.79%, 25.41%, 20.67%, and 17.65% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023. The fund has also maintained a low expense ratio of 0.42% and a low portfolio turnover ratio of 18.76%.
The fund is suitable for investors who are looking for long-term capital growth and are willing to take moderate to high risks and bear moderate to high volatility. The fund can be a good choice for investors who want to invest in a diversified portfolio of stocks across market segments, sectors, and themes and benefit from the growth potential of the Indian economy. However, the fund also carries some risk, as it may face market fluctuations, sectoral imbalances, and thematic shifts. Therefore, the fund requires a long-term investment horizon of at least five years and a periodic review of the portfolio.
5. Nippon India Multicap Fund
The Nippon India Multicap Fund is a multicap fund that invests in stocks across market capitalization, sectors, and styles. The fund aims to provide long-term capital appreciation by investing in a diversified portfolio of equity and equity-related instruments that have strong fundamentals and growth potential. The fund follows a combination of top-down and bottom-up approaches to stock selection, taking into account macroeconomic factors, industry trends, and company-specific factors.
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The fund has been a good performer, delivering above-average returns over the long term. The fund has given 30.87%, 24.64%, 19.87%, and 16.98% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023. The fund has also maintained a low expense ratio of 0.43% and a moderate portfolio turnover ratio of 39.12%.
The fund is suitable for investors who are looking for long-term capital appreciation and are willing to take moderate to high risks and bear moderate to high volatility. The fund can be a good option for investors who want to invest in a diversified portfolio of stocks across market segments, sectors, and styles and benefit from the flexibility and adaptability of the fund manager. However, the fund also carries some risk, as it may face market fluctuations, sectoral imbalances, and style shifts. Therefore, the fund requires a long-term investment horizon of at least five years and a periodic review of the portfolio.
6. SBI Contra Fund
The SBI Contra Fund is a value-contrarian fund that invests in stocks that are undervalued or out-of-favor by the market. The fund aims to provide long-term capital growth by investing in a diversified portfolio of equity and equity-related instruments that have strong fundamentals and growth prospects. The fund follows a contrarian and value-oriented approach to stock selection, seeking to identify stocks that are trading below their intrinsic value and have the potential to bounce back.
returns over the long term. The fund has given 35.76%, 27.32%, 22.14%, and 16.92% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023. The fund has also maintained a low expense ratio of 0.45% and a low portfolio turnover ratio of 15.32%.
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The fund is suitable for investors who are looking for long-term capital growth and are willing to take high risks and bear high volatility. The fund can be a good option for investors who want to invest in the value/contrarian segment, which offers higher returns and a lower valuation than the growth segment. However, the fund also carries higher risk, as it may underperform in the short term due to its contrarian approach and may face market fluctuations, liquidity constraints, and regulatory changes. Therefore, the fund requires a long-term investment horizon of at least five to seven years and regular tracking of the portfolio.
7. DSP Midcap Fund
DSP Midcap Fund is a midcap fund that invests in stocks of companies that are ranked between 101 and 250 by market capitalization. The fund aims to provide long-term capital appreciation by investing in a diversified portfolio of mid-cap companies that have strong fundamentals, growth potential, and competitive advantages. The fund follows a growth-oriented and bottom-up approach to stock selection, focusing on the quality, sustainability, and scalability of the businesses.
The fund has been a solid performer, delivering above-average returns over the long term. The fund has given 34.82%, 26.41%, 21.32%, and 16.87% annualized returns in three, five, seven, and 10 years, respectively, as of December 31, 2023. The fund has also maintained a low expense ratio of 0.46% and a moderate portfolio turnover ratio of 38.54%.
The fund is suitable for investors who are looking for long-term capital growth and are willing to take moderate to high risks and bear moderate to high volatility. The fund can be a good option for investors who want to invest in the mid-cap segment, which offers higher growth potential and a lower valuation than the large-cap segment. However, the fund also carries some risk, as mid-cap stocks are more sensitive to market movements, liquidity constraints, and regulatory changes. Therefore, the fund requires a long-term investment horizon of at least five years and a periodic review of the portfolio.
Conclusion
Equity mutual funds can offer high returns in the long term, as they benefit from the growth potential of the stock market. However, equity mutual funds also come with higher volatility and risk, as they are subject to market fluctuations and uncertainties. As such, equity mutual funds prove fitting for investors exhibiting a considerable risk appetite and possessing a lengthy investment horizon.
In this article, we have looked at seven equity mutual funds that have offered over 15% annualized returns in three, five, seven, and 10 years, as of December 31, 2023. These funds have been selected based on their CRISIL rankings, which consider various factors such as performance, risk, consistency, portfolio quality, and fund manager experience. We have also discussed the features, benefits, and risks of each fund and how they can fit into your investment portfolio.
These funds are among the best-performing schemes in the equity mutual fund category and have delivered consistent and superior returns over the long term. However, these funds are not guaranteed to perform well in the future and may face various challenges and uncertainties. Therefore, investors should do their own research, analysis, and due diligence before investing in any of these funds. Investors should also consider their own risk profile, investment objective, and time horizon before choosing any of these funds.
