It is said that with stock markets at record high when it can be both difficult to time the markets, one can in order to take advantage of market gains can at best take the SIP or Systematic Investment Plan route which involves disciplined as well as regular investment. Further SIP route in mutual fund also makes sense as the fund can even distribute your funds across assets thus both diversifying as well as reducing the overall risk for the investor.
Now as is known to reap handsome gains from mutual funds and other such funds that provide exposure to markets, you need to remain invested for a longer span of at least 3 years or more, here we list out some of the funds from varied categories that have more than doubled the SIP amount in 5 years. Here we take into account SIP of Rs. 10000 per month started off 5 years back.
5 Mutual Funds that generated highest 5-year return in the last 5-years
|Fund SIP||5 year SIP returns as on August 2, 2021||Rs. 6 lakh now valued at|
|ICICI Prudential Technology Fund- Direct Plan||40.47%||Rs. 15.76 lakh|
|Quant Small Cap-Direct Plan-Growth||39.96%||Rs. 15.67 lakh|
|Tata Digital India Fund - Direct Plan|
|39.04%||Rs. 15.24 lakh|
|Aditya Birla Sun Life Digital India Fund - Direct Plan||38.52%||Rs. 15.05 lakh|
|SBI Technology Opportunities Fund - Direct Plan||35.32%||Rs.l4.02 lakh|
1. ICICI Prudential Technology Fund-
Direct Plan: IT pack has been the outlier for many years and this is imminent from this ICICI Prudential fund i.e. invested into IT and technology dependent companies. The fund aims to offer capital appreciation to its investors. The fund with an asset size of over Rs. 3494 crore carries an expense ratio of over 1%.
Since its launch in 2013 the fund has provided a return of 26.95%. SIP in the fund can be started for Rs. 100, while for minimum lump sum payment one needs to shell out Rs. 5000.
Top holdings of the fund include Infosys, Tech Mahindra, TCS, HCL, Persistent Systems, IRCTC, Coforge etc.
Interestingly, Rs. 1 lakh investment as lump sum in this fund has trebled in value to Rs. 3.65 lakh in 5 years, while SIP of Rs. 10000, amounting to Rs. 6 lakh in 5 years is valued at Rs. 15.76 lakh.
2. Quant Small Cap-Direct Plan-Growth:
This fund is a very high risk high return plan with 3/4th of the fund's corpus put in small cap stocks. The Rs. 700 crore fund carries an expense ratio of 0.5% lower than the category average
Since its launch the fund has offered a return of over 17% and its benchmark is NIFTY Smallcap 250 TRI. Some of the top holdings of the mutual fund are The India Cements, Indiabulls Real Estate, EID Parry, Fortis, Shree Renuka Sugars, HFCL etc.
SIP in the fund can be started for Rs. 1000. And here as we talk of the returns, in 5-years time the fund's SIP has yielded a return of 39.96%, fetching Rs. 15.67 lakh on an investment of Rs. 6 lakh ( started as monthly SIP of Rs. 10000 for 5 years). This fund is accorded a 4-Star rating by Morning Star.
3. Tata Digital India Fund - Direct Plan
This is again a thematic fund focused on technology. The IT fund from the Tata mutual fund commands a fund size of Rs. 1796.6 crore. The expense ratio of the fund is also lower than the category average at 0.67%. Tata Digital India fund was launched in the year 2015 and since then has offered a return of over 25%.
SIP in the fund can be started for just Rs. 150 and some of the top holdings of the fund include Infosys, TCS, Tech Mahindra, Persistent Systems and HCL among others.
Now as is noteworthy here that technology and small cap funds are the main categories that have generated the best five year returns in last 5-years. Though, IT sector will still see boom going ahead because of the heightened adoption of technology and will be generating multi-bagger returns. Investors who are not highly aggressive should rather avoid small cap funds and instead can go by multi-cap funds. Also, another thing when determining whether you should or not consider these top performing mutual funds can be the consistency in their returns.
Mutual fund investments are market related and subject to risk. Returns on mutual funds for the last 5-years are provided just for knowledge sake and should not be construed as investment advice.