Introduction:
Due to recent bullish trends, several mutual funds have showcased remarkable performance over the last 1 to 3 years. While short-term analysis may not be ideal for evaluating mutual funds, a review becomes essential for those considering medium to long-term investments. This article presents information on five mutual fund schemes that have yielded impressive returns ranging from 160% to 215% over the last 3 years, from January 21, 2021, to January 20, 2024.
Below are the Exceptional funds and their return analysis:
- Quant Small Cap Fund – This fund records achieving 215% return in 3 years
Investment Objective:
Capital appreciation and long-term growth through investment in a portfolio of small-cap companies.
Performance Details:
Absolute Returns:
1-Year: 54%
2-Year: 62%
3-Year: 215% (1 Lac turned to 3.15 Lacs)
Annualized Returns:
1-Year: 54%
2-Year: 27%
3-Year: 46%
Our View:
This fund is a consistent performer in medium to long-term tenure.
Beta: 1.02, Alpha: 10.5.
Suitable for high-risk tolerance investors.
- Nippon India Small Cap Fund – This fund records achieving 180% return in 3 years
Investment Objective:
Long-term capital appreciation through investment in equity and equity-related instruments of small-cap companies.
Performance Details:
Absolute Returns:
1-Year: 52%
2-Year: 58%
3-Year: 180% (1 Lac turned to 2.8 Lacs)
Annualized Returns:
1-Year: 52%
2-Year: 25%
3-Year: 41%
Our View:
Beta: 0.85, Alpha: 10.4.
Consistent performer is suitable for high-risk investors.
- ICICI Prudential BHARAT 22 FOF – This fund records achieving 175% return in 3 years
Investment Objective:
Generate returns by investing in units of BHARAT 22 ETF, comprising 18 PSU and 3 private sector firms.
Performance Details:
Absolute Returns:
1-Year: 60%
2-Year: 97%
3-Year: 175% (1 Lac turned to 2.75 Lacs)
Annualized Returns:
1-Year: 60%
2-Year: 40%
3-Year: 40%
Our View:
Beta: 1, Alpha: 18.6.
The fund outperformed due to the bull run in PSU stocks.
Recommended for short-term; diversified mutual funds suggested for medium to long term.
- HSBC Small Cap Fund – This fund records achieving 167% return in 3 years
Investment Objective:
This fund generates long-term capital from the managed portfolio of equity
Performance Details:
Absolute Returns:
1-Year: 51%
2-Year: 46%
3-Year: 167% (1 Lac turned to 2.67 Lacs)
Annualized Returns:
1-Year: 51%
2-Year: 21%
3-Year: 38%
Our View:
Beta: 0.81, Alpha: 9.3.
This share is suitable for investors taking high risk with medium to long-term tenure.
- Tata Small Cap Fund – This fund records achieving 160% return in 3 years
Investment Objective:
Gaining long-term capital by investing in equity and equity-related instruments mostly in small-cap companies.
Performance Details:
Absolute Returns:
1-Year: 37%
2-Year: 48%
3-Year: 160% (1 Lac turned to 2.6 Lacs)
Annualized Returns:
1-Year: 36.9%
2-Year: 21.7%
3-Year: 37.5%
Our View:
Beta: 0.76, Alpha: 9.5.
The consistent performer is suitable for high-risk investors with a medium to long-term horizon.
CONCLUSION
Investment in a mutual fund is a good decision to accumulate funds in long term because of the diversification of investment. Importantly, mutual funds cater to distinct risk appetites and funding dreams, presenting a diffusion of fund alternatives from conservative to aggressive. Additionally, the convenience of buying and promoting mutual fund stocks provides liquidity, permitting traders to transform their holdings into coins tremendously unexpectedly if wished.
