Best High Return Mutual Funds to invest in 2022-23

Investors always look for various investment options that can provide high returns. While mutual funds provide stable returns in medium to long term, still investors hunt for higher returns. How about taking a little high risk and aim to get high returns from mutual funds? Instead of compromising for 10% annualized returns, what if we can target and aim for 12% or 15% annualized returns? In this article we would provide 5 Best High Return Mutual Funds to invest in 2022 and 2023 that can generate superior returns in medium to long term.

Also Read:  5 Aggressive Balanced Mutual Funds to invest in 2022

What are High Return Mutual Funds?

Index or large cap funds provide stable returns between 10% to 12% (annualized) in medium to long term. However, if one can take higher risk and invest in the specific category of funds, they can expect 12% to 15% annualized returns.

Best High Return Mutual Funds to invest in 2022-2023

Midcap funds, small cap funds, sector funds and thematic mutual funds can generate high returns. However, some of these funds can outperform only in short to medium term. Investing in such funds could be risker. Hence, one should pick-up only mutual fund schemes that can outperform in medium to long term.

How we filtered these High Return Mutual Fund Schemes?

There are hundreds of equity mutual fund schemes. However, picking up only 5 funds could be a big challenge. One should not carry away that other funds are bad. The filters are applied to short list to a smaller group of funds.

1) Filtered mutual fund schemes that outperformed in various market cycles from midcap and smallcap mutual fund categories.

2) Considered sector funds that can consistently provide returns in medium to long term. These include IT/Technology and Banking Funds. We have avoided Infra, pharma, FMCG etc., as such sectors outperform in the short term and more cyclical in nature, however riskier in medium to long term.

3) Shortlisted funds that generated consistent annualized returns in the last 3 to 5 years

4) Again filtered funds that generated consistent rolling returns.

5) Finally, considered funds that have a lowest expense ratio.

Performance metrics gathered from ValueResearchOnline

Who can invest in these mutual funds?

Since the funds selected are from midcap or smallcap or specific sector, these carry high risk. As an example, the IT / Technology category has corrected for over 20% in the last 6 months. While there is an opportunity for fresh investments, such downfall can be there for short term even in future.

If you are a high risk investor, willing to invest for 5-10 years and looking for high return mutual funds, you can invest in such funds.

Moderate to low risk investors should avoid such funds.

Investors who want to invest for the short term should also avoid such funds.

Top 5 Best High Return Mutual Funds to invest in 2022-2023

Here is the list of high return mutual fund schemes.

#1 – Canara Robeco Emerging Equities Fund

#2 – Quant Mid Cap Fund

#3 – SBI Small Cap Fund or Kotak Smallcap Fund

#4 – Tata Digital India Fund

#5 – SBI Banking & Financial Services Fund

There are several other consistent funds from these categories, hence don’t think that other funds are bad.

Top High Return Funds – Detailed View

Let us get into more info about these funds

#1 – Canara Robeco Emerging Equities Fund

This mutual fund scheme invests in large and mid-cap stocks.

Currently this fund invests 60% in largecap, 38% in midcap and 2% in Smallcap stocks.

Fund Performance – Annualised Returns

  • Last 7 years – 17%
  • Last 5 years – 15%
  • Last 3 years – 25%
  • Last 1 year – 1%

Fund Performance – Rolling Returns

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 64% of the times
  • 1% to 12% returns – 31% of the times
  • Negative returns – 5% of the times

From a 5 year rolling return perspective, this fund generated:

  • Over 12% returns – 86% of the times
  • 1% to 12% returns – 14% of the times
  • Negative returns – Zero times

This fund generated a 21.3 % annualized return since inception. This fund is able to beat the benchmark consistently in the last 5 to 10 years. With the lowest expense ratio of 0.59%, this is one of the Best High Return Mutual Funds to invest in 2022-23.

I am personally investing in this fund and we covered this in our List of Top Large and Midcap Mutual Funds in our earlier articles.

#2 – Quant Mid cap Fund

This fund majorly invests in mid cap companies in India.

Currently this fund invests 31% in large cap and 72% in mid cap stocks.

Fund Performance – Annualised Returns

  • Last 7 years – 18%
  • Last 5 years – 23%
  • Last 3 years – 41%
  • Last 1 year – 20%

Fund Performance – Rolling Returns

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 59% of the times
  • 1% to 12% returns – 39% of the times
  • Negative returns – 2% of the times

From a 5 year rolling return perspective, this fund generated:

  • Over 12% returns – 43% of the times
  • 1% to 12% returns – 56% of the times
  • Negative returns – 1% of the times

This fund generated a 17.3 % annualized return since inception. With the lowest expense ratio of 0.63%, this is one of the Top High Return Mutual Funds to invest in 2022-2023.

#3 – SBI Smallcap Fund

This scheme invests predominantly in small cap stocks in India, however, can invest in other large cap or mid cap too.

Currently this fund invests 55% in mid cap stocks and 45% in small cap stocks.

Fund Performance – Annualised Returns

  • Last 7 years – 22%
  • Last 5 years – 20%
  • Last 3 years – 33%
  • Last 1 year – 16%

Fund Performance – Rolling Returns

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 67% of the times
  • 1% to 12% returns – 33% of the times
  • Negative returns – zero times

From a 5 year rolling return perspective, this fund generated:

  • Over 12% returns – 87% of the times
  • 1% to 12% returns – 13% of the times
  • Negative returns – zero times

This fund generated a 27 % annualized return since inception. With the lowest expense ratio of 0.74%, this is one of the Best High Return Mutual Funds to invest in India now.

If you remember, we covered SBI Small Cap Mutual Fund among 10 Mutual Funds with Highest SIP Returns in 10 years.

#4 – Tata Digital India Fund

The objective of this fund is to invest at least 80% in equity of companies from the IT / Technology sector in India.

Currently this fund invests 87% in large cap, 8% in mid cap stocks and 5% in small cap stocks.

Fund Performance – Annualised Returns

  • Last 5 years – 27%
  • Last 3 years – 27%
  • Last 1 year – minus 18%

Fund Performance – Rolling Returns

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 96% of the times
  • 1% to 12% returns – 4% of the times
  • Negative returns – zero times

From a 5 year rolling return perspective, this fund generated:

  • Over 12% returns – 100% of the times
  • 1% to 12% returns – zero times
  • Negative returns – zero times

This fund generated a 20% annualized return since inception. Recently technology stocks took a huge beating in the last 6 months. It’s a wonderful opportunity for investors to invest a lump sum or through SIP for 6 months in this fund. With the lowest expense ratio of 0.34%, this is one of the Best High Return Mutual Funds for 2022-23 from the technology sector.

#5 – SBI Banking & Financial Services Fund

The Fund invests minimum of 80% in stocks of companies engaged in banking and financial services.

Currently this fund invests 81% in large cap, 15% in mid cap stocks and 4% in small cap stocks.

Fund Performance – Annualised Returns

  • Last 7 years – 18%
  • Last 5 years – 13%
  • Last 3 years – 16%
  • Last 1 year – 5%

Fund Performance – Rolling Returns

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 61% of the times
  • 1% to 12% returns – 37% of the times
  • Negative returns – 2% of the times

From a 5 year rolling return perspective, this fund generated:

  • Over 12% returns – 72% of the times
  • 1% to 12% returns – 28% of the times
  • Negative returns – zero times

This fund generated a 15% annualized return since inception. Banking sector is an evergreen sector in India, which is consistently growing year on year. While this fund expense ratio is slightly higher at 0.78%, this is one of the Best High Return Mutual Funds from banking and financial services category. We have covered this fund as part of Best Banking Funds to invest in earlier years too.

Have you liked our tips and analysis? Then share it on your Facebook, Twitter, Telegram and other social media, which might be useful to your friends too.

Suresh KP

11 comments

Leave a Reply

Your email address will not be published.