We keep educating investors that investing in mutual funds can be done for medium to long term perspective to reap the benefits of compounding. Mutual funds can provide stable and high returns if invested for long term. As an example, in the last 20 years, mutual funds generated 11% to 21% annualised returns. In this article, we would provide 5 mutual fund schemes that generated 3,370% and 4,700% returns in the last 20-Years from 28-Feb-2004 to 27-Feb-2024. Note that the performance pertains to regular funds as direct funds were not existing during that period.
5 Mutual Fund Schemes with 20-Year Returns between 3,370% to 4,700%
Here is the list of 5 Top Performing Mutual Funds in the last 20-Years that generated over 3,370% returns.
#1 – Sundaram Midcap Fund – 20-Year Returns: 4,700%
#2 – Nippon India Growth Fund – 20-Year Returns: 4,280%
#3 – SBI Long Term Equity Fund – 20-Year Returns: 3,750%
#4 – SBI Contra Fund – 20-Year Returns: 3,730%
#5 – SBI Large & Midcap Fund – 20-Year Returns: 3,370%
Note: ETFs, funds that got merged and sector funds are excluded from this list. Data source is Value Research and Moneycontrol.
You can also check out our article on 5 Mutual Fund Schemes with 3-Year Returns between 160% to 215%
What is Beta and Alpha in Mutual Funds?
We have given beta and alpha metrics, hence providing detailed definitions for investors to understand them. You can skip this section if you are already aware of them.
Beta – It is a measure of a fund’s sensitivity to the market movement. Beta of less than 1 indicates that fund would have lower swing compared to the ups and downs of the benchmark. Beta of more than 1 indicates that fund would have wider swings compared to benchmark. Investors should prefer lower beta funds which can have lesser swings compared to benchmark.
Alpha – It is a measure of extra returns provided by the fund compared to the benchmark. Investors should prefer high alpha funds which can generate higher returns. One should use Alpha and Beta together which goes hand in hand when comparing between risk and returns.
5 Mutual Fund Schemes with 20-Year Return Over 3,370% – Investment Objective and Performance Details
Let’s get into more information about these funds.
#1 – Sundaram Midcap Fund – 20-Year Returns: 4,700%
Investment Objective:
The scheme aims to achieve capital appreciation by investing in mid-cap stocks. The fund defines ‘midcap’ as a stock whose market capitalization shall not exceed the market capitalization of the 50th stock (after shorting the securities in the descending order of market capitalization) listed with the NSE.
Pls note that Principal Midcap Fund has merged into Sundaram Mid Cap Fund earlier.
Performance Details
Absolute Returns of the fund (Regular Plans)
- 1-Year Return: 53%
- 2-Year Return: 64%
- 3-Year Return: 91%
- 5-Year Return: 153%
- 10-Year Return: 527%
- 20-Year Return: 4,700% (1 Lac would have turned to 48 Lacs)
Annualised Returns of the fund (Regular Plans)
- 1-Year Return: 53%
- 2-Year Annualised Return: 28%
- 3-Year Annualised Return: 24%
- 5-Year Annualised Return: 20%
- 10-Year Annualised Return: 20%
- 20-Year Annualised Return: 21.35%
Our View:
- Like I indicated in our earlier articles, midcap cap funds invest in mid-size companies and are high risk. However, they reward with high returns too.
- Its top-10 share holdings are PFC, Tube Investments, Federal Bank, Cummins India, Shriram Finance, Kalyan Jewellers, Trent, Fortis Healthcare, REC and Persistent Systems.
- Fund’s beta is 0.91 (<1 is better) and Alpha is minus 1.25 (positive alpha is better).
- This fund has been a consistent performer that has generated 24.3% annualised returns since inception.
- High risk investors can make such funds as part of their mutual fund portfolios and invest for a medium to long term. Moderate or low risk investors can avoid such funds.
If you are looking for short term, you can check our view about 5 Mutual Fund Schemes with 1-Year Returns between 66% to 90%.
#2 – Nippon India Growth Fund – 20-Year Returns: 4,280%
Investment Objective:
The primary investment objective of the Scheme is to achieve long-term growth of capital by investing in equity and equity related securities through a research based investment approach.
Performance Details
Absolute Returns of the fund (Regular Plans)
- 1-Year Return: 56%
- 2-Year Return: 69%
- 3-Year Return: 110%
- 5-Year Return: 218%
- 10-Year Return: 590%
- 20-Year Return: 4,280% (1 Lac would have turned to 43.8 Lacs)
Annualised Returns of the fund (Regular Plans)
- 1-Year Return: 56%
- 2-Year Annualised Return: 30%
- 3-Year Annualised Return: 28%
- 5-Year Annualised Return: 26%
- 10-Year Annualised Return: 21%
- 20-Year Annualised Return: 20.8%
Our View:
- This fund invests 65% in midcap and smallcap stocks which are high risk and rewards with good returns too.
- Its top-10 share holdings are PFC, Cholamandalam Finance, Persistent Systems, Fortis Healthcare, Varun Breverages, Supreme Industries, NTPC, Prestige Estates, AU Small Finance Bank and Angel One.
- Fund’s beta is 0.92 (<1 is better) and Alpha is 2.24 (positive alpha is better).
- This fund has been a consistent performer that has generated 22.6% annualised returns since inception.
- High risk investors can invest in such funds from medium to long term perspective. Moderate or low risk investors can avoid such funds.
#3 – SBI Long Term Equity Fund – 20-Year Returns: 3,750%
Investment Objective:
The scheme seeks capital appreciation through investments in equities, cumulative convertible preference shares and fully convertible debentures and bonds. The scheme was converted into an open-ended plan in November 1999.
Performance Details
Absolute Returns of the fund (Regular Plans)
- 1-Year Return: 59%
- 2-Year Return: 78%
- 3-Year Return: 105%
- 5-Year Return: 175%
- 10-Year Return: 410%
- 20-Year Return: 3,750% (1 Lac would have turned to 38.5 Lacs)
Annualised Returns of the fund (Regular Plans)
- 1-Year Return: 59%
- 2-Year Annualised Return: 33%
- 3-Year Annualised Return: 27%
- 5-Year Annualised Return: 22%
- 10-Year Annualised Return: 17%
- 20-Year Annualised Return: 20.02%
Our View:
- This is ELSS Tax Saving scheme where investors would get the income tax benefit u/s 80c up to ₹ 1.5 Lakhs in a financial year. However, there would be 3 year lock-in period for investors to redeem their funds.
- Its top-10 share holdings are GE T&D India, ICICI Bank, Bharti Airtel, Torrent Power, Cummins India, HDFC Bank, M&M, SBI, GAIL and Reliance Industries.
- Fund’s beta is 0.92 (<1 is better) and Alpha is 5.62 (positive alpha is better).
- This fund has been a consistent performer that has generated 17.1% annualised returns since inception.
- Investors who are looking for tax savings u/s 80c with 3 year lock-in period can invest in such schemes. Other equity fund investors can invest in non ELSS equity fund schemes.
#4 – SBI Contra Fund – 20-Year Returns: 3,730%
Investment Objective:
The scheme seeks to provide the investor with the opportunity of long-term capital appreciation by investing in a diversified portfolio of equity and equity related securities following a contrarian investment strategy.
Performance Details
Absolute Returns of the fund (Regular Plans)
- 1-Year Return: 49%
- 2-Year Return: 75%
- 3-Year Return: 121%
- 5-Year Return: 230%
- 10-Year Return: 483%
- 20-Year Return: 3,730% (1 Lac would have turned to 38.3 Lacs)
Annualised Returns of the fund (Regular Plans)
- 1-Year Return: 49%
- 2-Year Annualised Return: 32%
- 3-Year Annualised Return: 30%
- 5-Year Annualised Return: 27%
- 10-Year Annualised Return: 19%
- 20-Year Annualised Return: 20%
Our View:
- This is a contra fund that invests in stocks of large cap, midcap and smallcap segment following a contrarian investment strategy. This strategy is an investment style in which investors purposefully go against prevailing market trends by selling when others are buying and buying when most investors are selling.
- Its top-10 share holdings are HDFC, Gail, SBI, Cognizant, PNB, ICICI Bank, Petronet, Tata Steel, Biocon and ONGC.
- Fund’s beta is 0.83 (<1 is better) and Alpha is 13.2 (positive alpha is better).
- This fund has been a consistent performer that has generated 19.75% annualised returns since inception.
- This fund is suitable to Investors who have advanced knowledge of macro trends and prefer to take selective bets for higher returns compared to other equity funds. Other investors may avoid such funds.
Do you know that 10 years is decent time frame to invest in mutual funds to reap the benefits of compounding. Check out our 5 Mutual Fund Schemes with 10-Year Returns between 920% to 1,250%
#5 – SBI Large & Midcap Fund – 20-Year Returns: 3,370%
Investment Objective:
To provide the investor with the opportunity of long-term capital appreciation by investing in diversified portfolio comprising predominantly large cap and mid cap companies
Performance Details
Absolute Returns of the fund (Regular Plans)
- 1-Year Return: 34%
- 2-Year Return: 49%
- 3-Year Return: 80%
- 5-Year Return: 151%
- 10-Year Return: 428%
- 20-Year Return: 3,370% (1 Lac would have turned to 34.7 Lacs)
Annualised Returns of the fund (Regular Plans)
- 1-Year Return: 34%
- 2-Year Annualised Return: 22%
- 3-Year Annualised Return: 22%
- 5-Year Annualised Return: 20%
- 10-Year Annualised Return: 18%
- 20-Year Annualised Return: 19.4%
Our View:
- This is a large and mid cap fund that invests in stocks of large cap and mid cap companies. Since it invests in midcap segment too, its high risk-high return fund.
- Its top-10 share holdings are Reliance, HDFC Bank, ICICI Bank, HDFC, Infosys, SBI, Coforge, Nalco, Voltas and Sun Pharma.
- Fund’s beta is 0.86 (<1 is better) and Alpha is 4.87 (positive alpha is better).
- This fund has been a consistent performer that has generated 15% annualised returns since inception.
- High risk investors can invest in such funds. Alternatively, one can consider a large cap fund and one midcap fund instead of single fund.
Conclusion: In summary, the mutual fund schemes highlighted in this article have generated superior performance over the past twenty years. Yes, many equity funds generated superior returns due to recent bull run. When assessing mutual fund portfolio, investors should consider the risks involved in investing in midcap and smallcap segment. They should carefully assess their risk tolerance, investment goals, and time horizon before considering any of these funds.
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