Mutual funds: Keep these top performers on radar based on 1-year returns

Top Mutual Funds: Are you planning to add mutual funds in your investment portfolio? Before making investment decisions, experts strongly advise evaluating the past performance of mutual funds. Shedding light on the top mutual funds that should be on investors' radar based on their one-year returns, here's a glimpse into where potential growth and stability may exist.

Spotlight on top-performing large cap funds

Large cap funds, known for their stability and modest returns, have shown promising performances over the past year. Topping the list is the Quant Large Cap Fund, which has demonstrated growth with a return of 49.24 per cent, as per AMFI data. Following closely behind are the JM Large Cap Fund and the Bank of India Bluechip Fund, boasting returns of 38.25 per cent and 39.10 per cent respectively. 

Not to be overlooked, the Taurus Large Cap Fund and Nippon India Large Cap Fund have also delivered good returns of 36.72 per cent and 36.10 per cent respectively.  

Large cap fund: Is it your best fit?

Large Cap Funds, classified as equity funds, allocate a significant portion of their assets to companies with large market capitalisations. These companies, known for their reputation and track record of wealth creation, are favoured by investors seeking stability and long-term growth. Large Cap Funds are distinguished by their ability to deliver regular dividends and consistent wealth accumulation through steady compounding. 

They offer a lower risk profile compared to small-cap or mid-cap schemes, making them an attractive option for investors with a conservative risk appetite and a focus on long-term investment goals. According to SEBI, large cap companies comprise the top 100 entities based on market capitalisation, highlighting their perceived lower risk and stable performance. Investors keen on mitigating risk while aiming for steady returns often find Large Cap Funds a prudent choice for their investment portfolios.

Spotlight on top-performing mid cap funds

Leading the pack in mid cap funds, the Quant Mid Cap Fund delivered a return of 60.24 per cent, securing the top spot on the list, as per AMFI data. Following closely behind are the Mahindra Manulife Mid Cap Fund and the JM Midcap Fund, which recorded returns of 58.59 per cent and 57.90 per cent respectively. 

Additionally, the HDFC Mid-Cap Opportunities Fund and HSBC Midcap Fund showcased strong performances with returns of 53.75 per cent and 50.64 per cent respectively.

Mid cap fund: Is it your best fit?

These funds specialise in investing in medium-sized companies with growth potential, attracting investors seeking diversification and capital appreciation opportunities. These funds typically yield higher returns than large-cap funds while exhibiting more volatility, yet they remain more stable than small-cap funds albeit potentially offering lower returns. 

In essence, Mid Cap mutual funds represent a balance between risk and return, offering investors the potential for enhanced returns when selected judiciously with a diversified portfolio, sector allocation, and competent fund management.

Spotlight on top-performing small cap funds

Small Cap Funds have delivered high one-year returns, with notable contenders showing strong performances. Leading the pack is the Quant Small Cap Fund, boasting a return of 68.7 per cent, as per data on Groww. Close behind are funds like the Nippon India Small Cap Fund and the HSBC Small Cap Fund, which have delivered returns of 57.2 per cent and 51.6 per cent respectively. 

Additionally, investors have seen strong performances from the Bank of India Small Cap Fund and the Edelweiss Small Cap Fund, with returns of 51.4 per cent and 48.0 per cent respectively. Other notable performers include the ICICI Prudential Smallcap Fund and the Axis Small Cap Fund, recording returns of 45.7 per cent and 40.4 per cent respectively.

Small cap fund: Is it your best fit?

Small Cap Funds focus on investing primarily in equity or equity-related instruments of small-cap companies, as defined by the Securities and Exchange Board of India (SEBI). These schemes are mandated to allocate at least 80 per cent of their total assets to small-cap companies, which are typically ranked below the 250th position in terms of market capitalisation, equating to less than Rs 5000 crore. 

While small-cap investments offer significant growth potential, they also come with higher risks due to market volatility. However, investors with a higher risk tolerance and a longer investment horizon often find small-cap funds appealing, as these companies have the potential to deliver substantial returns over time.

Spotlight on top-performing value funds

In Value Funds, the Quant Value Fund stands out as a frontrunner, showcasing an one-year return of 65.44 per cent, as per AMFI data. Following closely behind are contenders like the JM Value Fund and the ABSL Pure Value Fund, which have delivered notable returns of 59.08 per cent and 54.43 per cent respectively. 

Additionally, investors have seen strong performances from the Nippon India Value Fund and the HSBC Value Fund, with returns of 54.11 per cent and 50.03 per cent respectively.

Value fund: Is it your best fit?

These funds specialise in employing a value investment strategy, identifying undervalued stocks that trade below their intrinsic values, presenting potential for long-term growth. With a focus on prudent investing and capital appreciation, Value Funds continue to attract investors seeking opportunities in undervalued assets amidst market fluctuations.

However, while past performance serves as a valuable indicator, experts remind investors to consider a holistic approach to fund selection. Factors such as the reputation of the fund house, market conditions, and individual risk appetite should all be taken into account before making investment decisions. In navigating the mutual fund investment options, informed choices guided by thorough research and expert advice remain paramount for investors aiming to achieve their financial goals.