Not satisfied with Sensex’s return? These 10 funds gave up to 60% returns in FY17

The S&P BSE Sensex rose 18 percent in the financial year 2017, but it might have disappointed you because a lot of stocks actually more than doubled investors’ wealth in the same period.

Tracking stocks become tough if you are working full-time job. Hence, the only other alternative of safe return in equity markets is investing via mutual funds (MFs).

For those who think MFs do not perform, Morningstar gave a list of 10 funds to moneycontrol which not just created alpha, but gave twice as much return as Sensex did in the same period in absolute terms across categories.

Investing via mutual funds in equity markets not just assures professional management of your money but peace of mind and this is reflected in the asset under management (AUM) which swelled to more than Rs 18 lakh crore in the last 12 months.

Top funds which gave twice as much return in the FY17 include funds like DSP Blackrock Natural Resources, ICICI prudential Banking and Financial Services, L&T Emerging Business, Tata Banking & Financial Services, Birla Sun Life Small & Midcaps, IDFC Infrastructure, Tata Equity P/E, and Mirae Asset Emerging Bluechip.

Overall, MF AUM has seen a very healthy growth rate of 45 percent so far in FY17. The overall industry AUM is INR 18 lakh crore, as of data collated as on 28 February 2017.

Industry folio count saw a 10.5 percent increase to crossed the 5 crore count. Total folio count is at 5.28 crores as on Feb 2017.

“Equity Funds continued to receive healthy inflows, with the systematic investment plan (SIP) book continuing to grow. There was also a fair bit of buying post the market correction in Nov-16. Small and Midcap funds and ELSS continued to receive disproportionate inflows,” Morningstar told moneycontrol.

“SIP book continues to grow and currently stands at a healthy Rs 4,000 crore monthly. Equity ETFs also saw a surge in assets, with the EPFO investing into NIFTY and SENSEX ETFs. Also, the 2nd tranche of the CPSE ETF witnessed overwhelming demand,” it
said.

According to AMFI, mutual fund houses has added 67 lakh investor accounts in first 11 months of FY17 to total 5.4 crore accounts which is already higher than the total account addition in FY16 i.e. 59 lakh accounts.

In addition, the average SIP size was Rs 3,100 per month per SIP account which suggests an increase in interest from retail investors.

It is important for investors to understand the power of compounding. A small sum invested over a period of time could turn into big corpus which could be used for retirement or fulfilling various life goals.

Any goal would focus be to attain a high rate of return which provides a huge potential but by making sure that the risk associated with it is comparatively less. The rate of return is the amount earned on the amount invested.

“Various investment vehicles provide a different rate of returns. What is important is the asset allocation of a portfolio in which you have invested,” Quantum MF told moneycontrol.

“It is highly recommended that while you are young, it is wiser to be exposed to equities while steadily scaling it down to debt funds as you get older. It is important to protect your wealth by adopting a wise asset allocation,” it said.