We all invest for long term for accumulating a sizable corpus for meeting varied financial goals. And in this journey mutual fund SIPs have been the best instrument to play with as they through systematic investment option enable both disciplined and regular investment. Furthermore, as we here talk about equity schemes in particular, SIPs invested into in at different times i.e. when the markets are high or when markets are treading lower enable averaging of the cost.
So, here we list down 5 such equity schemes that top the chart in terms of 10-year SIP returns:
1. SBI Small Cap Fund:
This small cap fund from SBI commands a decent AUM of Rs. 10626 crore as on October 31, 2021, attracting an inflow to the tune of 46 percent of investment into the category. The fund launched in the year 2009 has since inception offered return of 21.12 percent. The scheme's return is benchmarked to S&P BSE Small Cap TRI.
Of more than 90% allocation in equities, over 66 percent is deployed in small cap stocks. Top 10 stocks in the fund's portfolio include Carborundum, Sheela Foam, Blue Star, Hatsun Agro, Finolex, JK Cement, V-guard, Elgi , V-Mart and Triveni Turbine.
In 1-year time frame, the fund has delivered return of 59.95 percent as against the benchmark which has outperformed delivering return over 73 percent.
Notably, SIP in the scheme can be initiated for just Rs. 500. Also talking about its rating, Value Research has accorded the fund a 4-star rating.
2. Nippon India Small Cap Fund:
Again an old mutual fund scheme in existence since 2010 from the house of Nippon India has assets under management of Rs. 17197 crore. The expense ratio of the fund is 1.81 percent. The fund's performance is benchmarked against NIFTY Smallcap 250 TRI.
SIP in the scheme can be kicked off with just Rs. 100 and there is 1 percent exit load charge applicable in case of redemption within 30 days.
The fund's corpus is distributed between large, mid and small cap stocks with the exposure in the small cap category being over 73 percent. Investors with investment horizon of at least 3-4 year with high risk appetite can bet on the fund.
In the 1-year period, the fund has outperformed its benchmark offering return of 81 percent.
Top stock holdings in the fund are Deepak Nitrite, Tube Investments, Birla Corp, Bajaj Electricals, Radico Khaitan, Navin Flourine, Orient Electric, Balram Chini Mills among others.
3. Mirae Asset Emerging Blue Chip Fund:
This is a large and mid cap fund from the house of Mirae Asset and commands a decent AUM of more than Rs. 20000 crore. Expense ratio of the fund is at 1.68 percent while the fund despite its classification as a bluechip fund is segregated to carry a higher risk.
Of an almost entire allocation into equities, major part is deployed into large and mid cap funds. The fund in a 1-year period has outperformed Nifty 50 by a tad and offered return of 49.09%.
The fund for initiating SIP requires minimum SIP investment of Rs. 1000 and for lump sum the investment needed is Rs. 5000.
Top 10 stocks in the portfolio of the scheme's fund include ICICI Bank, Infosys, HDFC Bank, Axis Bank, SBI, Mphasis, Voltas, JK Cement, TCS and Gujarat State.
4. Quant Tax Plan:
Among the different mutual fund categories, this equity linked savings scheme has also outperformed in 10-year SIP returns with an annualized return of 24.48%. The fund's corpus is having the most allocation in large and small cap scrips.
The fund hence apart from capital appreciation also provides income tax benefit as for investment up to Rs. 1.5 lakh the amount can be claimed as deduction under section 80C. Remember as it is a tax plan, there is a minimum lock in of 3 years.
Fund's major holdings are following scrips including L&T, RIL, ITC, SBI, Vedanta, Adani Ports, Indiabulls Real Estate, HDFC Bank and ICICI Bank.
SIP in the fund can be initiated for a minimum of Rs. 500. Return-wise the fund has outperformed the Nifty 50 TRI over the last 1-year period and generated return of 80.8%.
5. Kotak Small Cap fund:
This not so large small cap fund was launched in 2005 and since then has provided return of 18.26%. Benchmark of the fund is Nifty Small cap 100 TRI and the scheme's expense is 1.96 percent as on October 31.
In its portfolio, as the fund category suggest there is large concentration of small cap scrips with its top stock holdings being Century Plyboards, Carborundum, Sheela Foam, Persistent Systems, Galaxy Surfactants among others.
SIP in the fund can be started for Rs. 1000. In the last 1-year period, the fund's return are at 86.41%.
5 Top Equity Mutual Funds based on SIP 10-yr. returns and Rating
|Mutual fund||Sip 10-year return in %||Value of Rs. 10000 monthly SIP started 10 year ago (investment amount- Rs. 12 lakh)||Value Research Rating|
|SBI Small Cap Fund||26.39%||Rs. 49.3 lakh||4-Star|
|Nippon India Small Cap Fund||25.9%||Rs. 48.37 lakh||4-Star|
|Mirae Asset Emerging Blue Chip Fund||24.76%||Rs. 45.09 lakh||5-Star|
|Quant Tax Plan|
|24.48%||Rs. 44.5 lakh||5-Star|
|Kotak Small Cap fund:|
|23.85%||Rs. 43.11 lakh||4-Star|
Now as past returns do not guarantee similar returns in the future we certainly do not recommend buying or investing into these mutual funds without due diligence. Furthermore as equities are close to their all time high you can take a calibrated approach and not park a lump sum amount.
Also, as in the current scenario when equities are highly volatile your take on equity SIPs be dictated by your current circumstances say as in if your regular income is at risk in any way you can move your corpus in SIPs to either a short term debt fund or a savings account generating a higher return.
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