The top 5 equity mutual funds with highest returns.

Equity mutual funds have become a popular investment avenue for retail investors. Inflows into equity mutual funds hit a 14-month high in May 2021 as stock market strength prompted investors to invest more money in equity products. Investors invested Rs 10,083 crore in the stock plan for the third consecutive month.

Mutual fund schemes have been classified as:

  1. Equity schemes
  2. Debt schemes,
  3. Hybrid schemes,
  4. Solution-oriented schemes – for retirement and children and
  5. Other schemes – Index funds and of ETFs and fund funds.

mutual funds

According to the Investment Funds Association of India, an equity scheme is a fund that:

  •  Invests primarily in stocks and equity related instruments.
  • Seeks long term growth but can be volatile in short term.
  • Suitable for investors with a high appetite for risk and a long investment horizon.

Equity funds generally aim to achieve long-term capital appreciation. Equity funds may focus on specific market segments or may have a specific investment style.

There are large-cap, mid-cap and small-cap funds in the equity category.

Under the Equity category, there are Large cap, Mid cap and Small cap funds.

It is generally suggested that one should invest in mutual fund schemes with a horizon of 3-5 years to get good returns. Retail investors usually look at historical returns before deciding which mutual fund scheme to invest in.

For judging the performance of a scheme one should not consider short term returns like 1 year. Suppose 5 years long term returns are to be checked. This will help you identify the schemes that have consistently performed well in the market in good and bad times.

Top 5 large, mid, small cap schemes hgenerating highest 5 Year returns

Return is a dynamic figure and keeps on changing.

In the Large Cap category, Canara Robeco Bluechip Equity Fund has generated the highest return of 18.9% per annum (per annum) over a period of five years. It is followed by Axis Bluechip Equity Fund (17.9% p.a.) and Mirae Asset Largecap Fund (17.0% p.a.). Among the top 5 return generators, Axis has the largest assets under management, followed by Mirai.

In the mid cap category, Axis Midcap Fund has earned the highest return of 21.0% per annum (PA) over a period of five years. Next is PGIM India Market Opportunities Fund. Kotak Emerging Equity Fund, ranked fourth in 5-year returns, has the largest assets under management followed by Axis.

In the small cap category, Nippon Small Cap Fund has earned the highest return of 22.7% p.a. (per annum) over a period of five years. It is followed by Kotak Small Cap Fund with 21.6% p.a. Nippon has the largest assets under management in this category followed by HDFC.

One scheme from Axis Mutual Fund is listed in the top 5 each in large, mid and small cap categories. Kotak and Edelweiss are in the top 5 in the two large and mid cap categories.

As can be seen from the table, small cap funds generated the highest returns, followed by mid cap and large cap funds as described in the Risk Vs Return parameter.

Disclaimer: This is not an investment recommendation and readers are expected to do their own research before investing.