The last 10 years have been very important for mutual fund investors. During this period, the stock market has experienced ups and downs, as well as boom times; however, those who remained invested in the long term were rewarded. Those who invested in the three key categories of equity funds – large-cap, mid-cap and small-cap – experienced different levels of returns and risk.
Data shows that in 10 years, small-cap funds performed the best. Mid-cap funds also did not lag. On the other hand, large-cap funds gave a relatively low return, yet stable performance. This clearly means that whoever took more risk also got higher returns in the long term.
Small-cap Vs mid-cap Vs large-cap – Category average returns
Small-cap funds – This category has given an average return of 17.35% in the last 10 years.
Mid-cap funds – Mid caps also did not disappoint investors and gave an average return of 16.27%.
Large-cap funds – The average performance of this category was 12.79%, which is less than small and mid cap, but is considered important from the stability point of view.
Although the category average gives an overall picture, if we look at the top funds in these three categories, the returns are much higher.
Small-cap category – The top 5 funds (direct plan) of this category have given more than 20% returns in 10 years.
- Nippon India Small Cap Fund (22.67%)
- Axis Small Cap Fund (20.43%)
- Quant Small Cap Fund (20.34%)
- SBI Small Cap Fund (20.33%)
- HDFC Small Cap Fund (20.17%)
Mid-cap category – Top 5 mid cap-funds (direct plans) have given around 19% to 20% returns in 10 years.
- Invesco India Mid Cap Fund (20.33%)
- Kotak Midcap Fund (19.82%)
- Edelweiss Mid Cap Fund (19.60%)
- Motilal Oswal Midcap Fund (19.29%)
- Nippon India Growth Mid Cap Fund (18.98%)
Large-cap category – Large-cap funds (direct plans) also performed well and top 5 funds gave returns of 15% to 16%.
- Quant Focused Fund (16.03%)
- Nippon India Large Cap Fund (15.68%)
- ICICI Prudential Large Cap Fund (15.60%)
- Canara Robeco Large Cap Fund (15.52%)
- Invesco India Largecap Fund (14.90%)
(Data source: Value Research)
Benefits and risks
Small-cap funds – Big opportunity for high returns, but also the highest risk. These are most affected during market downturns.
Mid-cap funds – Balanced category, in which growth prospects are also good and risk is less than small cap.
Large-cap funds – Considered stable and safe investment options. Risk is relatively low, but returns are also limited compared to other categories.
Caution for investors
Investors should note that these figures reflect the average and top fund performance over the last 10 years. Market conditions may change in the future and returns may also vary. Therefore, it is important to keep in mind your risk appetite, investment period and financial goals while making investment decisions.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.