Top 4 Mutual Funds with High Return Capacity
It is often said that “Saving money makes you smart, investing makes you smarter”, and with a good reason. Investing money opens a window of possibilities for you wherein you have the opportunity of multiplying your money rather than leaving it in your bank account completely idle. Though there are several investment options available, mutual funds are considered a better option mostly because of their capacity to provide good returns.
A lot of people are well-aware of mutual funds and their benefits but the challenge and the confusion that comes with it is what usually drives them away. But the fact that mutual funds offer a wide range of schemes for all kinds of investors has made things easier.
It is true that investing in mutual funds can be risky but only when it is not planned properly. There are certain parameters such as the performance of the fund, expense ratio, the fund manager’s experience, and more that one needs to consider before investing money. Understanding that doing all that research work can be very time-consuming and frustrating as well, we bring to you a small list of the top mutual funds that bring in the highest returns.
Credits: Bank of Baroda
1. Quant Tax Plan
The Quant Tax Plan falls under the category of Equity Linked Savings Scheme (ELSS)and has an AUM of ₹327.45 crores. The plan tries to produce capital appreciation by putting resources into equity shares that have the potential to grow in the future. Evaluated as an incredibly high-risk plan, it has a minimum lump sum and SIP investment of ₹500. Under Section 80C, up to ₹1.5 lakh on the profits are exempt from tax while any returns over ₹1.5 lakh will be charged at 10%. But the plan requires a lock-in time of 3 years. The Quant Tax Plan offers a 5-year CAGR of 23.92% which is pretty impressive.
Credits: The Mutual Fund Guide
2. Nippon India Small-Cap Fund
The Nippon India Small-Cap Fund was introduced to the investors in the year 2013 and is an extremely risky fund. It focuses on investing in small-cap companies across all sectors. The minimum lump sum investment is ₹5000 and the minimum SIP investment is ₹100. Also, the investors need to keep in mind that the exit load for the Nippon India Small-Cap fund is 1% if one decides to redeem it within a month. Yet another thing to keep in mind is that you should invest in this fund only when you are willing to bear moderate losses owing to the high risk involved. When it comes to suitability, the fund is best suited for investors who are willing to take higher risks and are looking to earn higher returns. The Nippon India Small-Cap Fund offers a 5-year CAGR of 23.61%.
3. SBI Small-Cap Fund
With a 5-year CAGR of 23.31%, this fund is best suited for investors who are looking to achieve long-term wealth growth. The SBI Small-Cap Fund has an AUM of ₹9620.21 crores and an expense ratio of 0.84%. Also, the Net Asset Value (NAV) of this fund stood at ₹102.68 as of 16th August 2021. Since the fund is extremely risky, the minimum SIP investment is ₹500. The best part about this fund is that it considers both growth and value investing as a part of its stock selection strategy.
Credits: The Economic Times
4. Mirae Asset Tax Saver Fund
The Mirae Asset Tax Saver Fund falls in the category of Equity Linked Saving Scheme (ELSS) and has an expense ratio of just 0.48% which is quite impressive. Plus, its ability to offer high returns with zero exit load is what makes it even more attractive to investors. Being an open-ended ELSS, the fund has a lock-in time of 3 years and is available to invest across market capitalizations. Its adaptable methodology offers a differentiated portfolio containing steady, well-established organizations and shows good potential for higher growth. With a 5-year CAGR of 22.45%, the Mirae Asset Tax Saver fund is best suited for financial investors looking to invest for a long period (in this case, 3 years). Another reason why investing in this particular fund can prove to be beneficial is its ability to fulfill the dual purpose of creating wealth for the long-term and saving tax at the same time.
Though there is no such thing as “the perfect mutual fund” that can offer high returns with no risks involved to its investors, the aforementioned are some of the mutual funds that can offer higher returns in the long run. As an investor, the easiest and the best way of deciding which mutual fund to invest in is to go with the one that can help you achieve your financial goal and at the same time suits your risk appetite. But since it is always advised to be careful when it comes to investing in mutual funds, taking help from a financial advisor can be beneficial.
The facts and figures are referred to from Financial Express.