Top performing mutual funds over 20 years

Ideally, an investment scheme is considered good if it performs well in both bear and bull market situations. If a stock booms in buoyant market conditions and crashes when the market is bleak, it can potentially lead you to losses. 

This article covers:

• Criteria to identify the mutual funds with the best average return
• List of top 10 mutual funds with best average return in the last 20 years 

Table of Contents

• Criteria to identify the mutual funds with the best average return
• List of top 10 mutual funds with best average return in the last 20 years 
  • 1. Franklin India Taxshield Fund
  • 2. Franklin India Prima Fund
  • 3. ICICI Prudential Long Term Equity Fund (Tax Saving)
  • 4. Aditya Birla Sun Life MNC Fund
  • 5. Tata India Tax Savings Fund
  • 6. Franklin India Technology Fund
  • 7. UTI MNC Fund
  • 8. ICICI Prudential FMCG Fund
  • 9. SBI Large and Midcap Fund
  • 10. HDFC Capital Builder Value Fund
• Conclusion

Criteria to identify the mutual funds with the best average return

If you are an investor and are interested in knowing about the mutual funds that have been giving the best returns in the last 20 years, continue reading this. Find here, the average return on the best MF schemes over the last 2 decades. 

Let us now have a look at the criteria we have used to identify the top mutual funds that have given the best results in the last 20 years.

• Funds launched before 2020 have completed 20 years in the market and fit our basic criteria. 
• Next, out of the mutual funds shortlisted in the first step, we further shortlist the schemes that have given a good performance and have given over 12% annualised return since they were launched. 

List of top 10 mutual funds with best average return in the last 20 years 

Here’s a list of top 10 mutual funds with best average return in the last 20 years:

1. Franklin India Taxshield Fund

• Fund objective: Franklin India Taxshield Fund is a scheme that aims at medium to long term capital growth with the added benefit of income tax rebate. The mutual fund scheme has an exposure to debentures, PSU bonds and money market instruments and it invests in equities. 
• Fund performance and risk ratios: Since the time of its inception, this mutual fund scheme has given 21% annualised returns and has clearly outperformed. For this fund, the returns have been highest for 10 years. It has a low beta of 0.85
• Final view: In the ELSS category, this is one of the star performing mutual funds and holds a 3 star rating

2. Franklin India Prima Fund

• Fund objective: The basic objective of Franklin India Prima Fund is giving medium to long term gains on capital along with income. 
• Fund performance and risk ratios: Since its inception, this fund has outperformed to give an annualised return of 19%. Over the last decade, it has given an annualised return of 15%, while last year it gave a negative return of 7%. It has a low beta of 0.76 
• Final view: This MF scheme gave the second highest annualised returns (19%) since it was launched over 20 years ago and holds a 4 star rating from Value Research

3. ICICI Prudential Long Term Equity Fund (Tax Saving)

• Fund objective: ICICI Prudential Long Term Equity Fund (Tax Saving) invests approximately 90% of the funds in equity and parks the remaining 10% in cash, debt and money market instruments for long term appreciation. 
• Fund performance and risk ratios: With a 19% annualised return since its launch, this fund has clearly outperformed. Over the last 10 yrs, it has given an annualised return of 13%, and in the previous financial year, a 7% negative gain has been noted. It has a low beta of 0.84
• Final view: It holds a 3 star rating and is considered as one of the best mutual fund schemes from the ELSS category for 2019.

4. Aditya Birla Sun Life MNC Fund

• Fund objective: To achieve long term growth at moderate risk levels, Aditya Birla Sun Life MNC Fund invests in securities of multinational companies only. A part of the fund is also invested in primary market offerings and IPOs. 
• Fund performance and risk ratios: With a 18% annualised return since its launch, this fund has clearly outperformed. Over the last 10 yrs, it has given an annualised return of 17% and last year, the return was 7% negative. It has a low beta of 0.78 
• Final view: In the MNC segment, this scheme is one of the top performers. 

5. Tata India Tax Savings Fund

• Fund objective: Tata India Tax Savings Fund invests approximately 80% of the funds in equity and remaining 20% in money market instruments and debt for long term capital growth.
• Fund performance and risk ratios: With a 18% annualised return since its launch, this fund has clearly outperformed. Over the last 10 yrs, it has given an annualised return of 13%, and in the last one year, it gave a 1% negative return. It has a moderate beta of 1.06  
• Final view: This MF was launched over 24 yrs ago and is considered as one of the best ELSS MF schemes. 

6. Franklin India Technology Fund

• Fund objective: With an 80% or less investment in equity and over 20% investment in money market instruments and debt, Franklin India Technology Fund targets long term capital growth. 
• Fund performance and risk ratios: With a 18% annualised return since its launch, this fund has clearly outperformed. Over the last 10 yrs, it has given an annualised return of 13%, and in the previous  year, a negative return of 3% was reported. It has a low beta of 0.62 
• Final view: This sector based mutual fund needs to be reviewed every quarter and if the sector shows a down trend you can consider reviewing and exit.

7. UTI MNC Fund

• Fund objective: UTI MNC Fund mainly invests in equity and securities related to equity for MNCs.
• Fund performance and risk ratios: With a 16% annualised return since its launch, this fund has outperformed. Over the last 10 yrs, it has given an annualised return of 15%, and in the last one year, negative return reported is 11%. It has a low beta of 0.77 
• Final view: This fund has underperformed in the last 3-5 yrs. 

8. ICICI Prudential FMCG Fund

• Fund objective: ICICI Prudential FMCG Fund invests around 90% of the corpus in FMCG companies and remaining 10% in money market instruments and debt. 
• Fund performance and risk ratios: With a 16% annualised return since its launch, this fund has outperformed. Over the last 10 yrs, it has given an annualised return of 17%, and last year, negative return reported was 3%. It has a low beta of 0.81 
• Final view: This mutual fund is one of the best performers in the last 5-20 years. 

9. SBI Large and Midcap Fund

• Fund objective: The equity to money market instruments and debt ratio for SBI Large and Midcap Fund is nearly 80-20. 
• Fund performance and risk ratios: With a 14% annualised return since its launch, this fund has outperformed. Over the last 10 yrs, it has given an annualised return of 12%, and last year, there was a negative return of 5%. It has a low beta of 0.81 
• Final view: This mutual fund has given above average returns in this category. 

10. HDFC Capital Builder Value Fund

• Fund objective: HDFC Capital Builder Value Fund scheme primarily invests in undervalued stocks.
• Fund performance and risk ratios: With a 14% annualised return since its launch, this fund has outperformed. Over the last 10 yrs, it has given an annualised return of 12%, while last year, there was a negative return of 13%. It has a low beta of 0.55 
• Final view: This fund has been unable to deal with stock market corrections and you can consider reviewing and exiting it.

Conclusion

Mutual funds have emerged as extremely flexible and tax efficient instruments. They also offer an investor the freedom to select investment options based on their track record, risk profile and fund objectives. However, as they are volatile in nature, hence, it is important to review their performance from time to time to minimise your risk.

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