Mutual fund Return : Mutual Funds That Filled Investors’ Pockets, Above 70% Return in 1 Year – Comprehensive Guide
Mutual fund Return : Mutual funds have emerged as one of the most popular financial investment options in the modern age, attracting a growing number of investors seeking to grow their wealth. In recent years, mutual fund investments have seen a remarkable increase, tripling in value over the past five years. From around Rs 25 lakh crore in 2019, mutual fund assets under management have ballooned to approximately Rs 67 lakh crore in 2024.
This surge is largely attributed to a growing awareness among investors and a realization of the potential benefits that mutual funds offer in terms of wealth generation. Over the last year, particularly, the interest in mutual funds has skyrocketed, with investors flocking to capitalize on the impressive returns that several funds have delivered.
Table of Contents
In this comprehensive essay, we will explore the fundamentals of mutual funds, examine their benefits, and take a detailed look at five of the best-performing mutual funds that have provided investors with returns exceeding 70% in just one year.
What Are Mutual Funds?
Before delving into specific funds, it is essential to understand the concept of mutual funds. A mutual fund is essentially a pool of money collected from a group of investors who share common investment goals. This pooled capital is then managed by a professional fund manager who invests the money across various asset classes, including equities (stocks), bonds, money market instruments, and other financial securities.
The central idea behind mutual funds is diversification, where an investor’s money is spread across a broad spectrum of investments, reducing the overall risk while aiming for consistent returns. By pooling funds together, individual investors can gain exposure to a wide range of securities that would otherwise be difficult or too costly for them to invest in on their own.
Mutual funds offer different investment schemes catering to the varied financial goals and risk appetites of investors. Whether an individual is looking for aggressive growth through equity funds, steady income through bond funds, or tax savings through specific plans, there is a mutual fund to suit almost every need.
However, as with any investment, mutual funds come with their share of risks. Advertisements often emphasize the fact that mutual fund investments are subject to market risks, and prospective investors should be prepared for both profit and loss. It is crucial to assess one’s financial goals and risk tolerance before deciding to invest in a mutual fund.
Benefits of Investing in Mutual Funds
Mutual funds offer a multitude of benefits, making them an attractive option for investors looking to build long-term wealth. Let us take a closer look at some of the key advantages:
1. Diversification
One of the standout features of mutual funds is diversification, which is the practice of spreading an investment across various sectors or asset classes. By diversifying, the risk associated with individual securities is minimized. Even if one security underperforms, other securities in the portfolio may perform well, thereby offsetting potential losses. This balanced approach is particularly beneficial in volatile markets, where the performance of individual securities can be unpredictable.
2. Affordability: Small Investment Amounts
Another significant advantage of mutual funds is the ability to start with small investments. Investors can begin investing with as little as Rs 500 per month through a Systematic Investment Plan (SIP).
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This feature makes mutual funds accessible to a broad range of investors, including those who may not have large sums of money to invest upfront. SIPs allow investors to contribute regularly, averaging the cost of purchasing mutual fund units and mitigating the risk of market timing.
3. Variety of Options
The mutual fund industry offers an extensive array of investment schemes, with over 2,000 schemes available to choose from. Whether an investor is looking for a high-growth equity fund, a debt fund for stable returns, or a balanced fund that combines both, there is a suitable option for every financial objective. Investors can select schemes based on their time horizon, risk appetite, and specific financial goals.
4. Liquidity
Mutual funds provide high liquidity, meaning investors can buy or sell units at their convenience. Unlike certain long-term investments such as fixed deposits or real estate, mutual fund units can be easily converted into cash. If a particular fund is underperforming, investors have the flexibility to exit the fund and move their money into better-performing funds. This ease of access to funds is a significant advantage for investors who may require quick liquidity.
5. Tax Benefits
Certain mutual fund schemes offer tax advantages, making them even more attractive to investors. For instance, investments in Equity Linked Savings Schemes (ELSS) are eligible for tax deductions under Section 80C of the Income Tax Act, 1961.
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By investing in ELSS funds, investors can reduce their taxable income and simultaneously benefit from the growth potential of equity investments. Over the long term, these tax-saving schemes can help investors accumulate wealth while enjoying the dual benefits of capital appreciation and tax relief.
The Top Five High-Performing Mutual Funds Over the Past Year
Now that we have a clear understanding of the benefits of mutual fund investments, let us turn our attention to the best-performing funds over the last year. These mutual funds have delivered stellar returns, surpassing 70%, significantly rewarding investors who placed their money in them.
1. Invesco India Focused Fund – Regular Plan
- Net Asset Value (NAV): Rs 29.40
- 1-Year Return: 74.16%
- Minimum Investment: Rs 1000
- Fund Size: Rs 3080 Crore
- Expense Ratio: 1.92%
The Invesco India Focused Fund has been one of the top performers over the last year, delivering an impressive 74.16% return. This means that an investment of Rs 1 lakh in this fund would have grown to Rs 1,74,158. The fund focuses on investing in a concentrated portfolio of high-conviction stocks, offering investors the potential for significant capital appreciation.
2. Motilal Oswal Midcap Fund – Regular Plan
- Net Asset Value (NAV): Rs 108.02
- 1-Year Return: 72.97%
- Minimum Investment: Rs 500
- Fund Size: Rs 15,940 Crore
- Expense Ratio: 1.65%
The Motilal Oswal Midcap Fund has also delivered impressive returns, with a 1-year return of 72.97%. This midcap-focused fund has a portfolio of high-growth companies with the potential to outperform large-cap stocks over time. An investment of Rs 1 lakh in this fund would have grown to Rs 1,72,975, making it a lucrative choice for investors seeking aggressive growth.
3. LIC MF Infrastructure Fund
- Net Asset Value (NAV): Rs 51.17
- 1-Year Return: 72.22%
- Minimum Investment: Rs 5,000
- Fund Size: Rs 725 Crore
- Expense Ratio: 2.40%
The LIC MF Infrastructure Fund is another top performer, with a return of 72.22% over the past year. This fund primarily invests in infrastructure-related companies, capitalizing on India’s growing infrastructure development. With an investment of Rs 1 lakh, investors would have seen their money grow to Rs 1,72,217.
4. Motilal Oswal ELSS Tax Saver Fund – Regular Plan
- Net Asset Value (NAV): Rs 55.95
- 1-Year Return: 71.46%
- Minimum Investment: Rs 500
- Fund Size: Rs 3,984 Crore
- Expense Ratio: 1.83%
The Motilal Oswal ELSS Tax Saver Fund offers both high returns and tax benefits, making it an attractive option for investors. Over the past year, the fund has delivered a return of 71.46%, with an investment of Rs 1 lakh growing to Rs 1,65,087. This fund also qualifies for tax deductions under Section 80C, offering dual benefits of wealth growth and tax savings.
5. ICICI Prudential Nifty Next 50 Index Fund
- Net Asset Value (NAV): Rs 67.48
- 1-Year Return: 69.24%
- Minimum Investment: Rs 100
- Fund Size: Rs 6,863 Crore
- Expense Ratio: 0.66%
The ICICI Prudential Nifty Next 50 Index Fund has delivered strong returns of 69.24% over the last year. This index fund tracks the performance of the Nifty Next 50 index, offering investors exposure to the next set of large-cap companies after the Nifty 50. An investment of Rs 1 lakh in this fund would have grown to Rs 1,57,489, making it a solid choice for investors seeking passive growth through index investing.
Mutual fund Return – Conclusion
Mutual funds have proven to be a powerful vehicle for wealth creation, offering investors a diverse range of options to meet their financial goals. The benefits of diversification, affordability, liquidity, and tax advantages make mutual funds an attractive investment option for both novice and experienced investors. As the mutual fund industry continues to grow, the range of schemes available ensures that there is a fund to suit every investor’s risk appetite and time horizon.
The five funds highlighted in this essay have delivered outstanding returns over the past year, with each offering unique opportunities for investors. Whether through a focused approach like the Invesco India Focused Fund, a midcap strategy like the Motilal Oswal Midcap Fund, or tax-saving benefits through the Motilal Oswal ELSS Tax Saver Fund, investors have a wide array of choices to grow their wealth.
It is important to remember, however, that past performance is not indicative of future results.
Disclaimer: The information provided in this article is for educational purposes only. Before making any investment decisions, it is advisable to consult with a financial expert. Investing in mutual funds involves market risks, including the potential for loss. Any investment decisions made are at your own discretion and risk. We do not take responsibility for any financial gains or losses that may result from actions taken based on the content of this article.
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