Which type of mutual fund is profitable?
Actively managed funds
It is this case, as you are investing for the long term, equity mutual funds can be the best option for you. However, there are other sub-categories within equity mutual funds, such as large cap funds, mid-cap funds, and small-cap funds.
The mutual fund category most often providing the highest return is small-cap funds. Read on to know the current risks associated. A small-cap mutual fund is by default, most often, the category with the highest returns, especially this year with a massive 51.8 per cent return.
| Ticker | Name | 5-year return (%) |
|---|---|---|
| PBFDX | Payson Total Return | 16.30% |
| SSAQX | State Street US Core Equity Fund | 16.20% |
| CORRX | Columbia Contrarian Core Adv | 15.89% |
| FGRTX | Fidelity Mega Cap Stock | 15.73% |
Large cap funds
Large cap schemes are suitable for risk-averse equity investors seeking safety. These funds invest in the top 100 stocks, providing relatively stable returns and lower volatility compared to mid cap and small cap schemes. Invest in large cap schemes for modest returns and stability.
Therefore, an investor can also become susceptible to making wrong investment decisions in his eagerness to make a lot of money quickly. So, can a person become rich by investing in mutual funds? Yes, it is possible!
A common misconception is that rich people pick stocks themselves, when in fact, wealthy investors are often putting their cash in index funds, ETFs, and mutual funds, Tu told MarketWatch Picks.
The highest delivering small cap mutual fund in 2023 was Mahindra Manulife Small Cap Fund, which offered over 53 per cent annual return last year, according to data available on Association of Mutual Funds in India (AMFI).
- HDFC Mid-Cap Opportunities Fund.
- Parag Parikh Flexi Cap Fund.
- ICICI Pru Bluechip Fund.
- HDFC Flexi Cap Fund.
- Nippon India Small Cap Fund.
- HDFC Balanced Advantage Fund.
- ICICI Prudential Equity & Debt Fund.
- ICICI Prudential Corporate Bond Fund.
| Mutual funds | 1-year return (%) |
|---|---|
| JM Value Fund | 47.66 |
| Nippon India Value Fund | 42.38 |
| Aditya Birla Sun Life Pure Value Fund | 43.02 |
| Axis Value Fund | 40.16 |
Do millionaires use mutual funds?
Cash equivalents are financial instruments that are almost as liquid as cash and are popular investments for millionaires. Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills. Some millionaires keep their cash in Treasury bills.
| S.No. | Mutual Fund House |
|---|---|
| 1. | SBI Mutual Fund |
| 2. | ICICI Prudential Mutual Fund |
| 3. | HDFC Mutual Fund |
| 4. | Aditya Birla Sun Life Mutual Fund |
| Fund Name | 5 Years Return | 10 Years Return |
|---|---|---|
| Parag Parikh Flexi Cap fund (G) | 23.3% | 20.5% |
| ICICI Prudential Infrastructure Fund (G) | 27.6% | 20.5% |
| ICICI Prudential Value Discovery Fund (G) | 22.7% | 20.5% |
| Tata Infrastructure Fund (G) | 25.2% | 20.4% |
| Fund Name | Category | Risk |
|---|---|---|
| Kotak Equity Arbitrage Fund | Hybrid | Low |
| Nippon India Arbitrage Fund | Hybrid | Low |
| Tata Arbitrage Fund | Hybrid | Low |
| Axis Arbitrage Fund | Hybrid | Low |
There is no fixed minimum return in a mutual fund. Mutual fund returns can vary widely and are influenced by various factors, including the types of assets the fund invests in, market conditions, fund management, and economic factors.
- Quant Mid Cap Fund. 12.49%
- Quant Small Cap Fund. 11.38%
- Quant Large & Mid Cap Fund. 10.19%
- Quant Large Cap Fund. 9.95%
- ITI Mid Cap Fund. 9.49%
- Kotak Multicap Fund. 9.45%
- Quant Focused Fund. 9.34%
- SBI Long Term Equity Fund. 9.31%
Key Takeaways
Cashing out mutual funds from an IRA or other qualified retirement account could trigger income tax on earnings, as well as an early withdrawal tax penalty. Withdrawing money from your investments to pay debt means missing out on future growth from compounding interest.
Mutual Funds may offer high liquidity and simple entry/exit choices depending on the type of fund selected. Therefore, you always have the option to liquidate your Mutual Fund assets in case of an emergency.
When an investor sells mutual fund shares, the redemption process is straightforward, but there might be unexpected charges or fees. Class A shares usually have front-end sales loads, which are fees charged when the investment is made, but Class B shares may impose a charge when shares are sold.
As for mutual funds, Kiyosaki has said for several years: “I just don't like mutual funds.
Who should not invest in mutual funds?
Mutual funds are managed and therefore not ideal for investors who would rather have total control over their holdings. Due to rules and regulations, many funds may generate diluted returns, which could limit potential profits.
I spent five years studying and interviewing 233 millionaires to learn about their habits and the way they think. Work was a big topic: 51% were entrepreneurs, 28% had traditional 9-to-5 jobs, and 18% were senior-level executives at large companies.
Moreover, mutual funds are meant to be evaluated against a benchmark such as a broad index or other yardstick of value - so if the S&P 500 falls 3% in a year and a large-cap mutual fund only falls 2.5%, it can be considered a "good" return, relatively speaking.
Five large cap mutual funds that gave the highest return in the past 10 years are Nippon India Large Cap Fund which gave 17.09% returns, followed by Mirae Asset Large Cap Fund with 16.99% return. The other three are ICICI Prudential Bluechip Fund, SBI Bluechip Fund and HDFC Top 100 Fund.
If you were to stay invested for a shorter duration, say 20 years, you'd invest Rs 2,40,000, but your portfolio value would be Rs 9.89 lakh. A decade-long investment of Rs 1,000 per month would equal Rs. 2,30,038, as compared to Rs. 1,20,000 invested over the same period.
