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Investment choices shouldn’t rely only on past returns; risk appetite, duration, and financial goals must be weighed carefully before selecting the right mutual fund
Although these funds carry inherent risks, they can provide substantial returns in the long term. (Representative/Shutterstock)
Systematic Investment Plans (SIPs) have become increasingly popular among investors, yet many still struggle to identify which mutual funds will yield significant profits. Successful SIP investment requires a strategic approach and insight into which mutual funds can generate substantial returns.
For those considering SIP investments over the next five years, it is crucial to be aware of some of the best-performing mutual funds. A recent report by The Economic Times highlighted several funds that have delivered impressive returns over the past five years.
However, it is important to remember that investment decisions should not be based solely on past performance. Factors such as risk tolerance, investment duration, and financial goals should be considered when selecting a fund.
Motilal Oswal Midcap Fund
The Motilal Oswal Midcap Fund has achieved an XIRR (Extended Internal Rate of Return) of 29.38% over the past five years. If a monthly SIP of Rs 10,000 had been made, the investment would now be worth Rs 12.27 lakh. This fund focuses on midcap companies, which lie between large and small enterprises. Although these funds carry inherent risks, they can provide substantial returns in the long term.
ICICI Prudential Infrastructure Fund And HDFC Infrastructure Fund
Next are two infrastructure funds. The ICICI Prudential Infrastructure Fund delivered an XIRR of 29.33%, while the HDFC Infrastructure Fund provided 28.10%. A monthly SIP of Rs 10,000 in these funds would have grown to Rs 12.25 lakh and Rs 11.90 lakh, respectively.
Other Promising Funds
The Bandhan Small Cap Fund also features in this list, achieving an XIRR of 27.18%. A monthly SIP of Rs 10,000 in this fund would now be worth Rs 11.65 lakh. Small-cap funds invest in smaller companies, which carry higher risks but can also offer substantial returns. Similarly, the Invesco India Midcap Fund converted a monthly SIP of Rs 10,000 into Rs 11.58 lakh with an XIRR of 26.93%.
Additionally, several other infrastructure funds have shown commendable performance. Franklin Build India Fund, LIC Infrastructure Fund, Nippon India Power and Infra Fund, DSP T.I.G.E.R Fund, and Canara Robeco Infrastructure Fund have delivered XIRRs ranging from 26.29% to 26.88%. Monthly SIPs of Rs 10,000 in these funds would have grown to between Rs 11.42 lakh and Rs 11.57 lakh. These funds also invest in companies related to infrastructure.
It is essential to understand that midcap and small-cap funds involve higher risks as they invest in smaller companies. Investors willing to take on the risk and stay invested for five years may find these funds offering good returns.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
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