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These mutual fund schemes have given 45-65% return in 3 years; check details here
Investing in equities through mutual funds is considered one of the best approaches. For long-term investors, market volatility shouldn’t be a major concern in mutual funds, as Systematic Investment Plans (SIPs) provide an effective means to navigate through these fluctuations. SIPs allow you to invest a fixed amount at regular intervals, enabling you to mitigate the impact of market volatility by averaging out the buying cost over the long run. With a robust monthly SIP book of over Rs 14,000 crore, the potential of SIPs is yet to be fully realized.
Consider this: Twenty years ago, if you had started investing Rs 10,000 every month in an equity fund then your portfolio would have grown to 92 lakh at an assumed rate of 12 per cent. Just by staying invested and doing nothing you would have become a crorepati. While 15 per cent is the average return we have taken in this example there are many schemes that have outperformed the benchmark and have managed to give return as high as 45-65 per cent return over the tenure of 3 years
According to Value Research, these mutual fund schemes gave 45-65 per cent returns in the last 3 years.
Mutual funds that have given more than 50% return in 3 years
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Selecting Right Mutual Fund
While investing in mutual funds may sound easy, selecting the right fund can be challenging. Hence you should keep these points in mind while choosing the right fund.
Determine Your Financial Goal: It is important to ask yourself why you want to save and invest. The time period required to achieve these goals can vary from months to years. For instance, saving for a down payment on a car is a short-term goal, while saving for retirement or a child’s education are long-term goals. By identifying your goal, you can align your investments accordingly and avoid prematurely withdrawing funds for other short-term goals.
Assess Your Risk Appetite: Once you know your goals, you need to assess your risk tolerance. If you are comfortable taking higher risks, you can consider investing in mid-cap and small-cap funds. If you are starting out, large-cap funds may be more suitable as they are relatively less risky. It is important to ask yourself whether you are comfortable investing in equities. If not, conservative investors can opt for debt and balanced funds.
Choose the Mutual Fund Category: Once you have identified your financial goals and assessed your risk appetite, you need to narrow down the category of mutual funds that aligns with your requirements. For long-term goals that are five years away, it is advisable to invest in equity funds.
Evaluate Fund Performance: After determining the category you want to invest in, select the specific scheme within that category. Examine the fund’s performance over different time periods and compare it with the benchmark and similar funds in the same category. Numerous mutual fund websites offer scheme comparisons, which can be useful in making informed investment decisions.
By following these steps, you can make informed decisions while selecting mutual funds and increase the likelihood of achieving your financial goals.