Over the last few years, the popularity of mutual fund SIP has grown by leaps and bounds. Data shows this – monthly SIP inflows stood at Rs 3,122 crore in April 2016 and have now been constantly hovering around the Rs 26,000 crore level for the past many months. It’s more than an 8-fold growth.
The biggest reason for this growth is probably the investment simplicity – investing a fixed amount every month and continuing it for a long time. Neither the worry of market timing nor the need for a lump sum amount. Not only does investing through SIP become easy, but gradually, a large fund is also prepared. Perhaps this is why today SIP has become the first choice for the middle class and small investors.
Meanwhile, those who have stuck to SIP for a long time have also got good benefits from it. If we look at the data of the last 10 years, many equity mutual funds have given a return of more than 20% annually. Imagine, if someone had done a SIP of just Rs 10,000 every month, today his investment would have reached Rs 44 lakh! These figures show not only the power of mutual funds, but also the power of investing with patience and discipline. In this write-up, we will take a look at top-10 equity mutual funds that have given more than 20% CAGR returns over the last 10 years.
Also read: Go for low-duration funds now
Of these top 10 mutual funds schemes based on the last 10 year-performance, four of them are midcap funds, three are sectoral funds, two smallcap funds and one ELSS fund.
Top 10 mutual funds with best SIP returns in 10 years
1. Quant Small Cap Fund
SIP returns over last 10 years: 24.56% CAGR
Based on this SIP return, Rs 10,000 monthly SIP would have been worth Rs 43.54 lakh in 10 years.
Lump sum investment return of 10 years: 19.17% CAGR
Rs 1 lakh lump sum investment in this scheme 10 years back would have turned into nearly Rs 5.78 lakh.
2. Nippon India Small Cap Fund
SIP returns over last 10 years: 22.93% CAGR
Based on this SIP return, Rs 10,000 monthly SIP would have become Rs 39.90 lakh in 10 years.
Lump sum investment return of 10 years: 20.44% CAGR
Rs 1 lakh lump sum investment in this scheme would be now Rs 6.42 lakh 10 years later.
3. Quant ELSS Tax Saver Fund
SIP returns over last 10 years: 21.74% CAGR
Based on this SIP return, an SIP of Rs 10,000 monthly started 10 years ago would have given investors Rs 37.43 lakh.
Lump sum investment return of 10 years: 19.62% CAGR
A lump sum investment of Rs 1 lakh 10 years ago would be worth now Rs 6 lakh.
4. Quant Mid Cap Fund
SIP returns over last 10 years: 21.60% CAGR
Based on this SIP return, Rs 10,000 monthly SIP would have been worth Rs 37.15 lakh in 10 years.
Lump sum investment return of 10 years: 19.63% CAGR
Rs 1 lakh lump sum investment in this scheme 10 years back would have turned into nearly Rs 4.78 lakh.
5. Motilal Oswal Midcap Fund
SIP returns over last 10 years: 21.47% CAGR
This CAGR return over 10 years would have turned a monthly Rs 10,000 SIP into Rs 36.90 lakh.
Lump sum investment return of 10 years: 16.99% CAGR
Based on this return, a lump sum investment of Rs 1 lakh 10 years ago would have become Rs 4.80 lakh.
6. ICICI Prudential Infrastructure Fund
SIP returns over last 10 years: 21.37% CAGR
Based on this SIP return, an SIP of Rs 10,000 monthly started 10 years ago would have given investors Rs 36.7 lakh.
Lump sum investment return of 10 years: 15.53% CAGR
A lump sum investment of Rs 1 lakh 10 years ago would be worth now Rs 4.23 lakh.
7. Edelweiss Mid Cap Fund
SIP returns over last 10 years: 20.97% CAGR
Based on this SIP return, Rs 10,000 monthly SIP would have become Rs 35.91 lakh in 10 years.
Lump sum investment return of 10 years: 17.26% CAGR
Rs 1 lakh lump sum investment in this scheme would be now Rs 4.91 lakh 10 years later.
8. Invesco India Infrastructure Fund
SIP returns over last 10 years: 20.67% CAGR
Rs 10,000 monthly SIP started 10 years ago would have been worth Rs 35.33 lakh now.
Lump sum investment return of 10 years: 15.65% CAGR
Rs 1 lakh lump sum investment in this scheme started 10 years back would be now worth nearly Rs 4.28 lakh.
9. Franklin Build India Fund
SIP returns over last 10 years: 20.60% CAGR
Based on this SIP return, Rs 10,000 monthly SIP would have become Rs 35.21 lakh in 10 years.
Lump sum investment return of 10 years: 16.59% CAGR
Rs 1 lakh lump sum investment in this scheme would be now Rs 4.64 lakh 10 years later.
10. Nippon India Growth Fund
SIP returns over last 10 years: 20.38% CAGR
A Rs 10,000 monthly SIP would be worth Rs 34.79 lakh in 10 years.
Lump sum investment return of 10 years: 16.66% CAGR
Based on this return, Rs 1 lakh lump sum investment in this plan would now be worth Rs 4.67 lakh 10 years later.
(Data: Value Research)
Market volatility affects SIP investments
However, it is also true that the market does not perform well all the time. This has been seen in the last one year, when almost all equity mutual funds – except a few sectoral funds – either remained in loss or gave very meager returns. From this, it is important to understand that SIP is not a magical formula that will give huge profits every year. It is also affected by the fluctuations of the market. But one special thing about SIP is that it averages out those fluctuations, due to which there is a possibility of getting good returns in the long run.
Who should do SIP investments?
Now the question arises, for whom is SIP right? Actually, SIP is an excellent option for those people whose income is regular and who can stay invested for a long period. For working people, young professionals or those who want to invest keeping in mind their big financial goals like children’s education, buying a house or retirement, SIP can be a smart way.
While investing in SIP, some important things should be kept in mind – like choosing the right fund, reviewing your investment every year, increasing the SIP amount over time and not stopping investing in panic when the market falls.
If these habits are formed, then SIP can not only become a means of wealth creation, but can also take you towards a strong and self-reliant future. The most important things in this journey are – time, patience and discipline. With these three things, small amounts can turn into crores.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.