Ruchi SrivastavaMutual funds offer a highly effective way to grow wealth over the long term. With expert fund management and diversification, they serve as an accessible option for individuals looking to build substantial wealth. The Indian mutual fund industry is experiencing impressive growth, with assets under management (AUM) more than doubling in five years, rising from ₹22.26 lakh crore in 2019-20 to ₹67.09 lakh crore by October 2024. This upward trend is expected to continue, fuelled by increasing retail participation, favourable market conditions, and strong equity mutual fund inflows.
In this Blog we will explore the top 10 mutual funds that have consistently shown the potential to double your investment over time.
What are Mutual Funds?
A mutual fund is a collective investment vehicle that gathers money from multiple investors to invest in a range of assets, including stocks, bonds, and money market instruments. Its performance depends on the returns generated by its investments after deducting fees. Investors earn a proportional share of the fund’s income and capital gains based on the number of units they hold.
How Can Mutual Funds Help You Build Long-Term Wealth?
Large-cap funds are poised to attract increased investor interest as concerns over market valuations drive demand for safer options. Simultaneously, sectoral and thematic funds, targeting high-growth industries such as technology, healthcare, and renewable energy, are anticipated to deliver impressive returns. These trends highlight the importance of disciplined investing in leveraging mutual funds as a cornerstone for achieving long-term financial goals.
Over the past decade, the mutual fund industry in India has demonstrated remarkable growth, reflecting the resilience of the market and the wealth-building opportunities available to committed, long-term investors.
Small- and mid-cap funds have further showcased their potential to generate substantial returns, as seen in Nippon India Small Cap, delivering a 10-year return of 23.5%, and Motilal Oswal Midcap Fund, offering a 10-year return of 21.6%. These results emphasize the importance of selecting the right funds to capture gains across market cycles and achieve desired financial outcomes.
“At Tailwind Financial Services, we focus on ensuring consistent returns over time, reinforcing our confidence in mutual funds as a reliable tool for wealth creation. With disciplined investment and a well-diversified portfolio, investors can outperform market benchmarks while effectively managing volatility,” says Vivek Goel, Joint MD of Tailwind Financial Services.
This combination of robust fund performance, strategic diversification, and long-term commitment underscores mutual funds’ critical role in building sustainable wealth.
List of Top 10 Mutual Funds to Invest in the Financial Year 2024 -2025
1. Quant Small Cap Fund
About – Quant Small Cap Fund has been a top performer in the small-cap category, generating impressive returns over the last five years. The fund targets small-cap stocks with high growth potential, though it carries increased risk due to the inherent volatility of smaller companies.
Expected Returns in 5 Years – 47.4% return
Expected Returns in 10 Years – 21.9% returns
Best Suited for – Aggressive investors seeking high growth opportunities through small-cap investments.
2. Quant Infrastructure Fund
About – Quant Infrastructure Fund capitalizes on India’s rapid infrastructure development, with its strong returns driven by the growth of construction, industrial, and related sectors.
Expected Returns in 5 Years – 37.9%
Expected Returns in 10 Years – 20.4%
Best Suited For – Ideal for investors seeking sector-focused growth, particularly in infrastructure.
3. Nippon India Small cap Fund
About – Nippon India Small Cap Fund stands out as a top performer in the small-cap category, driven by its emphasis on emerging small companies with strong growth prospects.
Expected returns in 5 Years – 36.6%
Expected Return in 10 Years – 23.5%
Best Suited For – Suited for long-term investors with a high-risk appetite aiming for aggressive growth in the small-cap segment.
4. Quant Flexi Cap Fund
About – Quant Flexi Cap Fund offers the flexibility to invest in different market capitalizations, adjusting to market fluctuations while maintaining a balance between stability and growth opportunities across multiple sectors.
Expected Returns in 5 Years – 35.5%
Expected Returns in 10 Years – 21.2%
Best Suited For – Ideal for investors seeking diversified exposure to both large and small-cap companies.
5. SBI Small Cap Fund
About – SBI Small Cap Fund provides a diversified mix of small-cap stocks. Known for its solid long-term performance, it is a popular choice for investors looking for sustained growth in the small-cap sector.
Expected Returns in 5 Years – 29.1%
Expected Returns in 10 Years – 22.7%
Best Suited For -Aggressive investors targeting substantial returns from smaller, high-growth companies.
6. Axis Small Cap Fund
About – Axis Small Cap Fund targets smaller companies with high growth potential, offering investors an opportunity to benefit from emerging businesses.
Expected Returns in 5 Years – 29.4%
Expected Retuns in 10 Years – 20.6%
Best Suited For -Investors seeking to include high-growth small-cap stocks in their portfolio.
7. HSBC Small Cap Fund
About – HSBC Small Cap Fund, with its diverse portfolio of small-cap companies, has shown strong returns over the past five years. It focuses on emerging businesses with significant growth potential.
Expected Returns in 5 Years – 31.0%
Expected Returns in 10 Years – 20.4%
Best Suited For – Long-term investors with a high – risk tolerance seeking capital growth.
8. DSP Small Cap Fund
About – DSP Small Cap Fund has a proven track record of steady returns, driven by its focus on small-cap companies. The fund’s performance reflects effective management and strategic stock selection.
Expected Retuns in 5 Years – 31.2%
Expected Returns in 10 Years – 20.4%
Best Suited For – Investors seeking stability and consistent performance in the small-cap sector.
9. Motilal Oswal Midcap Fund
About – Motilal Oswal Midcap Fund gives investors access to mid-cap companies with strong growth potential. Mid-cap funds strike a balance between stability and growth, and this fund has consistently outperformed others in its category.
Expected Returns in 5 Years – 32.4%
Expected Retuns in 10 Years – 21.6%
Best Suited For – Investors seeking a balanced strategy that combines the stability of large-cap with the growth potential of small-cap stocks.
10. Edelweiss Mid Cap Fund
About – Edelweiss Mid Cap Fund invests in mid-cap stocks with significant growth potential. It has consistently outperformed other mid-cap funds, demonstrating effective management and a strong portfolio strategy.
Expected Returns in 5 Years – 30.9%
Expected Returns in 10 Years – 20.8%
Best Suited For – Investors with a moderate to high risk appetite seeking strong growth opportunities in the mid-cap sector.
Why these Funds are Best for Investment?
These funds have outperformed the market by focusing on high-growth sectors and market segments like small-cap, mid-cap, and niche sector funds. They are ideal for investors who:
- Have a Long-Term Investment Mindset: Many of these funds carry higher risks but offer significant returns over extended periods.
- Willing to Take on High Risk: Small- and mid-cap funds can be volatile but provide opportunities for substantial rewards.
- Aim for Aggressive Growth: These funds are tailored for those seeking rapid wealth accumulation.
Final Thoughts
Doubling your wealth is a long-term process that requires patience, discipline, and making informed decisions. It’s important to stay focused on your financial goals and avoid making impulsive choices. The top 10 mutual funds listed here are excellent options to consider as you work toward achieving your financial objectives. These funds offer diverse opportunities for growth, but it’s crucial to match them with your individual risk tolerance and investment horizon. Always assess your ability to handle fluctuations in the market and plan for the long term.
Sources: msn.com
