I keep getting messages and emails from investors enquiring whether they can invest in low priced NAV mutual fund schemes or NFOs as they feel these are damn cheap compared to mutual funds that have high NAV. It is immaterial whether the fund has a low NAV or high NAV, end of the day, the returns matter. However, investors are always curious to know how such high NAV funds have been performing. In this article, I would talk about 5 Mutual Fund Schemes with Highest NAV of Rs 1,560 to Rs 3,650, their investment strategy, fund performance and our view about these funds.
What is NAV in a mutual fund?
Skip this section if you are already familiar about this.
NAV stands for Net Asset Value. It is the per-unit market value of a mutual fund’s scheme’s assets minus its liabilities.
NAV is typically calculated at the end of each trading day, and it fluctuates with changes in the value of the fund’s underlying securities.
Can investors consider NAV as a basis for investing in mutual funds?
Comparing mutual funds solely based on their NAV (Net Asset Value) can be misleading because NAV alone does not indicate the performance or potential returns of the fund.
Here are two examples why investors should not solely focus on NAV:
Example 1: Growth Potential vs. NAV:
Fund A:
- NAV: Rs 100 per unit
- Annualized Return over 5 years: 8%
Fund B:
- NAV: Rs 50 per unit
- Annualized Return over 5 years: 12%
Despite Fund A having a higher NAV (Rs 100 per unit) compared to Fund B (Rs 50 per unit), Fund B has consistently outperformed Fund A over the past 5 years with an annualized return of 12% compared to Fund A’s 8% return. Therefore, investors focusing on NAV might overlook Fund B’s superior performance.
Example 2: Impact of Expenses:
Fund X:
- NAV: Rs 20 per unit
- Expense Ratio: 1.5%
- Annualized Return over 3 years: 6%
Fund Y:
- NAV: Rs 50 per unit
- Expense Ratio: 0.5%
- Annualized Return over 3 years: 8%
Although Fund X has a lower NAV (Rs 20 per unit) compared to Fund Y (Rs 50 per unit), the higher expense ratio of Fund X (1.5%) significantly impacts its returns. After accounting for expenses, Fund X only delivers a net annualized return of 6% over the past 3 years, whereas Fund Y, despite its higher NAV and lower expense ratio (0.5%), provides a net annualized return of 8%. In this case, Fund Y proves to be a better investment option despite its higher NAV.
How did we filter these funds with Highest NAV?
- We have considered all equity mutual funds excluding sector / thematic mutual funds of direct plans only.
- Excluded ETF’s from this list.
- Considered top 5 mutual funds that has highest and latest NAV between Rs 1,560 to Rs 3,650.
Top 5 Mutual Funds with Highest NAV of Rs 1,560 to 3,650
Here is the list of highest NAV mutual funds.
#1 – Nippon India Growth Fund – NAV 3,650
#2 – Franklin India Prima Fund – NAV 2,490
#3 – HDFC Flexicap Fund – NAV 1,763
#4 – ABSL Flexicap Fund – NAV 1,677
#5 – Franklin India Flexicap Fund – NAV 1,560
5 Mutual Fund Schemes with Highest NAV – 1,560 to 3,650 – Deep Dive into these Funds
Here is the list of highest NAV mutual funds. Let us get into the details about their investment strategy, performance and our view about these funds.
#1 – Nippon India Growth Fund – NAV 3,650
Investment Strategy of the Fund
The scheme aims at long term growth of capital through research based investment approach. The funds will be invested in Equity and equity related instruments, and there will be an exposure to debt and money market instruments also.
Absolute Returns of the fund
- 1-Year Return: 62.5%
- 2-Year Return: 66.6%
- 3-Year Return: 117.8%
- 5-Year Return: 212.8%
- 10-Year Return: 604.6% (1 Lac would have turned to 7.04 Lacs)
Annualised Returns of the fund
- 1-Year Return: 62.5%
- 2-Year Annualised Return: 29.1%
- 3-Year Annualised Return: 29.5%
- 5-Year Annualised Return: 25.6%
- 10-Year Annualised Return: 21.5%
Conclusion and our view:
- This is a Midcap Fund that invests 98.6% in equity and 1.4% in other instruments.
- Its equity component is 14% in large cap, 50% in midcap, 14% in small cap stocks and balance in other equity instruments.
- As part of other investments, it invests in TREPS.
- Fund’s beta is 0.94. It is a measure of the fund’s sensitivity to the market movement. Beta of less than 1 indicates that the fund would have lower swing compared to the ups and downs of the benchmark. Beta of more than 1 indicates that the fund would have wider swings compared to the benchmark.
- Alpha is 3.43. 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.
- Its expense ratio is 0.88% for direct plans.
- One can invest as low as Rs 100 through lump sum and Rs 100 through SIP for 6 months in this fund. While there is no lock-in period, this fund has exit load of 1% if redeemed within 30 days from the date of investment.
- This fund has been a consistent performer that has generated 19.1% annualised returns since inception of direct plans in 2013. It has beaten its benchmark, Nifty 150 Midcap TRI in the last 1 year, 5 years and since inception.
- In fact this is one of the oldest mutual fund schemes in India that launched in 1995 where its regular plan has generated 22.6% returns since inception.
- Since it invests in Midcap stocks, it is high risk-high return fund. Investors with high risk appetite can invest in such funds for a medium to long term. Low or moderate risk investor should avoid such funds.
- We have covered this fund earlier as part of 5 Mutual Fund Schemes with 20-Year Returns between 3,370% to 4,700%
#2 – Franklin India Prima Fund – NAV 2,490
Investment Strategy of the Fund
To provide medium to long-term capital appreciation as a primary objective and income as a secondary objective.
Absolute Returns of the fund
- 1-Year Return: 52.9%
- 2-Year Return: 56.4%
- 3-Year Return: 81.5%
- 5-Year Return: 142.6%
- 10-Year Return: 521.5% (1 Lac would have turned to 6.21 Lacs)
Annualised Returns of the fund
- 1-Year Return: 52.9%
- 2-Year Annualised Return: 25%
- 3-Year Annualised Return: 21.9%
- 5-Year Annualised Return: 19.3%
- 10-Year Annualised Return: 20%
Conclusion and our view:
- Even this is a Midcap Fund and invests 97% in equity and 3% in other instruments.
- Its equity component is 8% in large cap, 50% in midcap, 18% in small cap stocks and balance in other equity instruments.
- As part of other investments, it invests in net receivables.
- Fund’s beta is 0.92. It is a measure of the fund’s sensitivity to the market movement. Beta of less than 1 indicates that the fund would have lower swing compared to the ups and downs of the benchmark. Beta of more than 1 indicates that the fund would have wider swings compared to the benchmark.
- Alpha is minus 2.8. 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.
- Its expense ratio is 1.04% for direct plans.
- One can invest as low as Rs 5,000 through lump sum and Rs 500 through SIP for 12 months in this fund. While there is no lock-in period, this fund has exit load of 1% if redeemed within 365 days from the date of investment.
- This fund has been a consistent performer that has generated 19.5% annualised returns since inception of direct plans in 2013. While the fund has beaten its benchmark (Nifty 150 Midcap TRI) since inception, it is the under performer in the last 1 year to 5 years.
- In fact even this is one of the oldest mutual fund schemes in India that was launched in 1993 where its regular plan has generated 19.5% returns since inception.
- Since it invests in Midcap stocks, it is high risk-high return mutual fund. Earlier we wrote about this fund as part of 5 Mutual Funds that Generated Rs 1.6 to 1.9 Crores from 10K SIP in 20 Years.
- Investors with high risk tolerance can invest in such funds for a medium to long term. Low or moderate risk investor should avoid such funds.
#3 – HDFC Flexicap Fund – NAV 1,763
Investment Strategy of the Fund
HDFC Flexi Cap Fund is an open-ended dynamic equity scheme investing across large cap, mid cap and small cap stocks.
The fund’s investment strategy revolves around bottom-up approach to stock selection with focus on quality companies at reasonable valuations, HDFC Mutual Fund said.
Absolute Returns of the fund
- 1-Year Return: 45.5%
- 2-Year Return: 57.2%
- 3-Year Return: 104.8%
- 5-Year Return: 148.3%
- 10-Year Return: 421.1% (1 Lac would have turned to 5.2 Lacs)
Annualised Returns of the fund
- 1-Year Return: 45.5%
- 2-Year Annualised Return: 25.3%
- 3-Year Annualised Return: 26.9%
- 5-Year Annualised Return: 19.9%
- 10-Year Annualised Return: 17.9%
Conclusion and our view:
- This is a flexicap fund that invests in large cap, midcap and smallcap stocks. Currently, it invests 88% in equity and 12% in other instruments.
- Its equity component is 61% in large cap, 6% in midcap, 3% in small cap stocks and balance in other equity instruments.
- Its top 10 equity holdings are ICICI Bank, HDFC Bank, Axis Bank, Cipla, HAL, SBI, HCL Tech, SBI Life, Bharti Airtel and Apollo Hospitals.
- As part of other investments, it invests in TREPS and InvITs.
- Fund’s beta is 0.91. It is a measure of the fund’s sensitivity to the market movement. Beta of less than 1 indicates that the fund would have lower swing compared to the ups and downs of the benchmark. Beta of more than 1 indicates that the fund would have wider swings compared to the benchmark.
- Alpha is 7.57. 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 can invest as low as Rs 100 through lump sum and Rs 100 through SIP for 6 months in this fund. While there is no lock-in period, this fund has exit load of 1% if redeemed within 365 days from the date of investment.
- This fund has been a consistent performer that has generated 17.4% annualised returns since inception of direct plans in 2013. This fund has beaten its benchmark (Nifty 150 Midcap TRI) in the last 1 year, last 5 years and since inception.
- Its expense ratio is 0.81% for direct plans.
- In fact even this is one of the oldest mutual fund schemes in India that was launched in 1995 where its regular plan has generated 19% returns since inception.
- Since it invests in midcap and smallcap stocks too, it is high risk high return mutual fund. As an example, this Flexicap Mutual Fund turned Rs 1 Lakh to Rs 9.2 Lakhs in last 10 years.
- High risk appetite investors can invest in such funds for over 5 years time frame. Low or moderate risk investor should avoid such funds.
#4 – ABSL Flexicap Fund – NAV 1,677
Investment Strategy of the Fund
The Aditya Birla Sun Life Flexi Cap Fund’s investment strategy is to invest in equities for 90% and debt and money market securities of 10%. The fund uses a top-down and bottom-up approach, and also invests in IPOs, emerging sectors, and other primary market offerings.
Absolute Returns of the fund
- 1-Year Return: 39.9%
- 2-Year Return: 32.5%
- 3-Year Return: 63.8%
- 5-Year Return: 116.5%
- 10-Year Return: 416.1% (1 Lac would have turned to 5.16 Lacs)
Annualised Returns of the fund
- 1-Year Return: 39.9%
- 2-Year Annualised Return: 15.1%
- 3-Year Annualised Return: 17.8%
- 5-Year Annualised Return: 16.7%
- 10-Year Annualised Return: 17.8%
Conclusion and our view:
- Even this flexicap fund invests in large cap, midcap and smallcap stocks. Currently, it invests 97.5% in equity and 2.5% in other instruments.
- Its equity component is 55% in large cap, 22% in midcap, 6% in small cap stocks and balance in other equity instruments.
- Its top 10 equity holdings are ICICI Bank, HDFC Bank, Infosys, Sun Pharma, HCL Tech, Reliance, Bharti Airtel, Apollo Hospital, L&T and United Spirits.
- As part of other investments, it invests in TREPS and other MF units.
- Fund’s beta is 0.94. It is a measure of the fund’s sensitivity to the market movement. Beta of less than 1 indicates that the fund would have lower swing compared to the ups and downs of the benchmark. Beta of more than 1 indicates that the fund would have wider swings compared to the benchmark.
- Alpha is minus 0.45. 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 can invest as low as Rs 100 through lump sum and Rs 100 through SIP for 6 months in this fund. While there is no lock-in period, this fund has exit load of 1% if redeemed within 90 days from the date of investment.
- Its expense ratio is 0.87% for direct plans.
- This fund has been a consistent performer that has generated 17.2% annualised returns since inception of direct plans in 2013. While the fund has beaten its benchmark (Nifty 500 Midcap TRI) since inception and in short term, however it is the under performer in the last 5 years.
- Even this too is one of the oldest mutual fund schemes in India that launched in 1998 where its regular plan has generated 21.65% since inception.
- Since this flexicap fund invests in midcap and smallcap stocks, it is high risk-high return fund. High risk appetite investors can invest in such funds for over 5 years time frame. Low or moderate risk investor should avoid such funds.
Investors can also check for mutual funds that have consistently generated positive returns every year in the last 10 years.
#5 – Franklin India Flexicap Fund – NAV 1,560
Investment Strategy of the Fund
The investment objective of the scheme is to provide growth of capital plus regular IDCW through a diversified portfolio of equities, fixed income securities and money market instruments.
Absolute Returns of the fund
- 1-Year Return: 47.2%
- 2-Year Return: 46.7%
- 3-Year Return: 86.3%
- 5-Year Return: 145.3%
- 10-Year Return: 435.9% (1 Lac would have turned to 5.3 Lacs)
Annualised Returns of the fund
- 1-Year Return: 47.2%
- 2-Year Annualised Return: 21.1%
- 3-Year Annualised Return: 22.9%
- 5-Year Annualised Return: 19.6%
- 10-Year Annualised Return: 18.2%
Conclusion and our view:
- Even this flexicap mutual fund invests in large cap, midcap and smallcap stocks. Currently, it invests 94% in equity and 6% in other instruments.
- Its equity component is 62% in large cap, 11% in midcap, 6% in small cap stocks and balance in other equity instruments.
- Its top 10 equity holdings are ICICI Bank, HDFC Bank, Infosys, L&T, Bharti Airtel, Axis Bank, SBI, HCL Tech, NTPC and Reliance.
- As part of other investments, it invests in net receivables.
- Fund’s beta is 0.9. It is a measure of the fund’s sensitivity to the market movement. Beta of less than 1 indicates that the fund would have lower swing compared to the ups and downs of the benchmark. Beta of more than 1 indicates that the fund would have wider swings compared to the benchmark.
- Alpha is 4. 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 can invest as low as Rs 5,000 through lump sum and Rs 500 through SIP for 12 months in this fund. While there is no lock-in period, this fund has exit load of 1% if redeemed within 365 days from the date of investment.
- Its expense ratio is 1.03% for direct plans.
- This fund has been a consistent performer that has generated 17.5% annualised returns since inception of direct plans in 2013. This fund has beaten its benchmark (Nifty 500 Midcap TRI) in the short term, medium term and since inception.
- Even this is one of the oldest mutual fund schemes in India that was launched in 1994 where its regular plan has generated 18.2% returns since inception.
- As indicated in above sections, flexicap fund invests in midcap and smallcap stocks and high risk. It is rewarded with higher returns too.. High risk appetite investors can invest in such funds for over 5 years time frame. Low or moderate risk investor should avoid such funds.
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