5 funds to create wealth in long-term

Everyone wants to create wealth to meet their financial goals, but still most people end up missing their financial obligations. The primary reasons behind this are that people don’t invest enough and put their money in assets which hardly beat inflation.

Sep 28, 2017 12:09 IST India Infoline News Service

Investment

Everyone wants to create wealth to meet their financial goals, but still most people end up missing their financial obligations. The primary reasons behind this are that people don’t invest enough and put their money in assets which hardly beat inflation. It has been empirically proven that equities based investment give inflation beating returns over long-term despite short-term volatilities. But most people argue that they don’t invest in equities as they don’t understand equity markets and stock valuations. These types of investors can opt to invest in equity markets via mutual funds. The Indian mutual fund industry is well regulated, transparent and mature. In fact, for small investors mutual funds also accept minuscule investments like Rs 500 per month via SIP.

Systematic Investment Plan (SIP) is a way to invest a particular amount in mutual funds regularly for a pre-defined period. There are a huge number of mutual funds to select from for an investor which makes the selection process an ordeal. To make this act easier, we have selected the 5 best mutual funds to create wealth in the long-term.

1. ICICI Pru Balanced Fund is an equity-oriented balanced fund which does tactical allocation between debt and equity to ensure optimal risk reward. The Fund has invested ~70% of AUM in equity to give steady growth over long term while ~27% is allocated to debt investments to cap the down side risk. In addition, ~57% of the AUM is invested in large-cap stocks while ~13% is invested in mid-cap and small-cap stocks. In last 5 years, the fund has consistently outperformed its benchmark, category return and broader market.

Scheme Name

1 Year

3 Years

5 Years

ICICI Pru Balanced Fund(G)

12.6

12.9

18.0

CRISIL Balanced Fund - Aggressive Index

10.5

8.4

11.0

NIFTY 50

11.8

6.9

11.5

Category Return

11.4

10.7

14.8

1 year returns are absolute; Returns greater than 1 year are CAGR
Returns as on September 27, 2017
Source: ACE MF


2. Aditya Birla SL Top 100 Fund is a large-cap equity fund which primarily invests in top 100 stocks by market capitalization. The fund has invested ~80% of its AUM in large-cap stocks and ~8% is invested in mid-cap stocks. The fund follows 'Growth cum value' investment style to create wealth in long-term. In the last 5 years, the fund has consistently outperformed its benchmark, Nifty 50, and category return.

Scheme Name

1 Year

3 Years

5 Years

Aditya Birla SL Top 100 Fund(G)

14.5

12.3

17.8

NIFTY 50

11.8

6.9

11.5

Category Return

13.7

11.3

15.1

1 year returns are absolute; Returns greater than 1 year are CAGR
Returns as on September 27, 2017
Source: ACE MF

3. Axis Focused 25 Fund is a large-cap equity fund that invests in high conviction stocks, maximum 25 stocks, from top 200 stocks by market capitalization. The Fund’s strategy is to invest in quality companies with credible management, sustainable profit growth and cash flow, and have clean balance sheet. The fund has invested ~60% of its AUM in large-cap stocks and ~27% in mid-cap stocks to generate higher returns. In the last 5 years, the fund has consistently outperformed its benchmark, Nifty 50, and category return. 

Scheme Name

1 Year

3 Years

5 Years

Axis Focused 25 Fund(G)

20.9

16.0

17.2

NIFTY 50

11.8

6.9

11.5

Category Return

13.7

11.3

15.1

1 year returns are absolute; Returns greater than 1 year are CAGR
Returns as on September 27, 2017
Source: ACE MF


4. Aditya Birla SL Equity Fund is a multi-cap equity fund which does tactical allocation between large-cap and mid-cap stocks to generate decent returns for investors. The fund has invested ~68% of its AUM in large-cap stocks and ~19% in mid-cap stocks to generate higher returns. In the last 5 years, the fund has consistently outperformed its benchmark, Nifty 50, and category return.

Scheme Name

1 Year

3 Years

5 Years

Aditya Birla SL Equity Fund(G)

16.7

16.9

21.5

NIFTY 50

11.8

6.9

11.5

Category Return

14.8

12.7

17.0

1 year returns are absolute; Returns greater than 1 year are CAGR
Returns as on September 27, 2017
Source: ACE MF


5. HDFC Mid-Cap Opportunities Fund is a mid-cap equity fund which has allocated 60% to mid-cap stocks and ~28% to large-cap stocks to generate high returns for investors. It has well diversified portfolio with no more than ~10% exposure to any particular sector. It has also managed its concentration risk, top 10 stocks account for only ~25% of the AUM. In the last 5 years, it has outperformed its benchmark, Nifty Free Float Mid-cap 100, by ~6% CAGR.

Scheme Name

1 Year

3 Years

5 Years

HDFC Mid-Cap Opportunities Fund(G)

15.2

18.5

24.5

Nifty Free Float Midcap 100

14.7

16.4

18.2

Category Return

16.3

17.4

23.4

1 year returns are absolute; Returns greater than 1 year are CAGR
Returns as on September 27, 2017
Source: ACE MF

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