Top 3 mutual Funds :1 lakh will turn into 1 crore: Comprehensive Guide 2024
Top 3 mutual Funds: Investing in mutual funds is a popular way to grow your wealth over time. These funds pool money from various investors and invest in stocks, bonds, or other assets. The potential for high returns makes mutual funds an attractive investment option. However, it’s crucial to understand that mutual funds come with varying levels of risk, and their performance can differ based on the market conditions. For investors, the key to success lies in carefully selecting funds that align with their risk tolerance, financial goals, and investment horizon.
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Among the various types of mutual funds, equity mutual funds are often favored for their potential to deliver higher returns over time. While they may be subject to short-term volatility, their long-term growth potential has made them a popular choice for investors looking to build wealth. Some equity mutual funds have performed exceptionally well, turning an initial investment of Rs. 1 lakh into substantial returns over the course of 30 years.
In this essay, we’ll explore three such equity mutual funds that have grown from an investment of Rs. 1 lakh to over Rs. 1 crore in 30 years. These examples demonstrate the potential of investing in well-managed, high-performing mutual funds, especially for those who are patient and have a long-term investment strategy.
1. Franklin India Prima Fund: A 30-Year Success Story
Launched in December 1993, the Franklin India Prima Fund is a mid-cap equity mutual fund that has delivered impressive returns over nearly three decades. With a Compound Annual Growth Rate (CAGR) of 19.59%, the fund has successfully capitalized on the growth potential of small and fast-growing companies. As of March 31, 2024, the fund manages assets worth Rs. 10,108 crore, which reflects the investor confidence and performance of the scheme.
If an investor had made a lump-sum investment of Rs. 1 lakh at the time of its launch, that investment would have grown to approximately Rs. 2.31 crore today, showcasing the power of compounding. This makes it one of the standout performers in its category.
The fund’s objective is to achieve high capital gains by investing in small and mid-sized companies that have strong growth potential. While the minimum investment for the scheme’s Systematic Investment Plan (SIP) is as low as Rs. 500 per week, month, or quarter, the long-term returns from this fund have proven to be exceptional. Investors looking for growth-oriented mid-cap exposure with a proven track record can consider the Franklin India Prima Fund.
2. Franklin India Bluechip Fund: Steady Growth with Bluechip Stocks
Another standout fund in the Franklin Templeton family is the Franklin India Bluechip Fund, which also launched in December 1993. This fund primarily invests in large-cap stocks, focusing on well-established companies with a stable performance history. The fund has delivered a strong CAGR of 19.28% over the past 30 years.
As of March 31, 2024, the fund’s assets stood at Rs. 7,691 crore, a testament to its broad investor base and its steady performance. A lump-sum investment of Rs. 1 lakh made at the time of the fund’s inception would have appreciated to about Rs. 2.13 crore today.
The Franklin India Bluechip Fund is an excellent choice for conservative investors seeking exposure to stable, blue-chip stocks. These companies typically offer lower risk but provide steady returns over time. The minimum investment for SIPs is also Rs. 500, making it accessible to a wide range of investors. This fund is ideal for those seeking a reliable long-term investment with exposure to established companies in the Indian market.
3. SBI Long Term Equity Fund: The ELSS Champion
Launched in February 1993, the SBI Long Term Equity Fund is one of the oldest and most successful funds in the Equity Linked Savings Scheme (ELSS) category. With a lock-in period of three years and the added benefit of tax deductions under Section 80C of the Income Tax Act, this fund offers a dual advantage for investors: wealth creation and tax savings.
As of March 31, 2024, the fund manages assets worth Rs. 21,976 crore. Over the past 30 years, the fund has achieved a CAGR of 16.68%, making it a consistent performer in the ELSS category. If an investor had invested Rs. 1 lakh at the time of the fund’s inception, that investment would have grown to Rs. 1.21 crore today.
The SBI Long Term Equity Fund is ideal for investors seeking long-term growth along with the tax benefits that come with ELSS investments. With a minimum investment of Rs. 500 for weekly, monthly, or quarterly SIPs, the fund provides a flexible option for investors looking to create wealth while taking advantage of tax-saving opportunities.
Read more: Investing in Mutual Funds : Invest Rs 10,000 Earn Rs 1.60 Crore : Comprehensive Guide
The Power of Compounding: How Your Rs. 1 Lakh Can Grow
The example of these three funds demonstrates a key principle of investing: compounding. Compounding allows your investment to grow exponentially over time, as the returns generated by your investment themselves start generating returns. This is particularly true for equity mutual funds, where the long-term growth of stocks leads to greater returns.
For instance, a Rs. 1 lakh investment in the Franklin India Prima Fund grew to over Rs. 2 crore in 30 years. This growth is a result of not just the initial investment, but also the compounded returns generated by the fund over the decades.
Considerations Before Investing in Mutual Funds
While mutual funds like the ones mentioned above offer substantial growth, they come with their risks. Equity mutual funds are subject to market fluctuations, and returns can be inconsistent over short periods. It’s essential to evaluate your risk tolerance and financial goals before selecting a fund. Additionally, investors should maintain a long-term investment horizon to take advantage of the growth potential of equity funds.
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Before investing in any mutual fund, it’s advisable to:
- Evaluate Your Risk Tolerance: Understand the level of risk you are comfortable with, especially when investing in equity funds, which can be volatile.
- Consult a Financial Advisor: It’s always a good idea to seek professional advice to make informed decisions based on your individual financial goals.
- Monitor Your Investments: Even though mutual funds are managed by professionals, it’s important to periodically review the performance of your investments to ensure they align with your financial objectives.
Conclusion
Equity mutual funds, especially those with a long and successful track record, offer a powerful way to build wealth over time. Franklin India Prima Fund, Franklin India Bluechip Fund, and SBI Long Term Equity Fund are three excellent examples of funds that have delivered exceptional returns over the last three decades. While these funds have turned a Rs. 1 lakh investment into several crores, it’s important to remember that past performance is not indicative of future results.
As you plan your investment strategy, consider these funds as potential options to grow your wealth over time. Remember to conduct thorough research and, if necessary, consult a financial advisor before making any investment decisions. With the right approach and a long-term perspective, mutual funds can be a key component of your financial success.
Disclaimer
Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. The past performance of a mutual fund is not indicative of its future returns. The value of investments may fluctuate, and investors may not get back the full amount invested.
It is strongly advised to consult with a certified financial advisor to understand the suitability of mutual funds in alignment with your financial goals, risk appetite, and investment horizon. All illustrations and examples provided in this blog post are for informational purposes only and do not constitute financial advice.
Keywords : Top 3 mutual Funds , Top 3 mutual Funds 2025
