10 years of Modi regime: How mutual funds turned into a must-have investment
The equity market has grown by nearly 14 percent on a 10-year basis, commemorating Narendra Modi-led NDA government. That brought retail investors into mutual funds by the drove as equity funds benefitted
The S&P BSE Sensex hit 75,000 points on April 9 for the first time in history and also closed the day on April 10 above a historic mark. This prints a 3-fold increase from the 25,000 points that Sensex was at, when Narendra Modi took over as India’s prime minister in May 2014, after the BJP-led coalition National Democratic Alliance won the general elections. Since then, the S&P BSE Sensex total return index (TRI) gained at a compounded annual growth rate of 13.5 percent and, for the Nifty 50, it stood at 13.6 percent. Small- and mid- cap indices also performed impressively during Modi’s 10-year run.
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Equity mutual funds benefitted. Retail investors who invested in stock markets through mutual funds, made money. The total number of retail accounts in mutual funds surged to 15 crore, up from 3.8 crore, 10 years back. Those who invested through Systematic Investment Plan (SIP) benefitted from volatility bouts in these 10 years. Here's a list of top-performing schemes (in terms of 10 year returns) from the major equity-oriented mutual fund categories. Period considered for the study is between June 1, 2014 and April 9, 2024. [Source: ACEMF]
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Largecap Funds As per guidelines laid out by markets regulator Sebi, these schemes invest in companies that rank between 1 and 100 in terms of market capitalisation. These schemes are considered of relatively lower risk compared to other types of equity mutual funds.
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Midcap Funds These schemes invest in the mid-sized companies that are ranked between 101 and 250 in terms of market capitalisation.
Equity-Linked Savings Schemes (ELSS) Equity-Linked Savings Schemes (ELSS) are tax-saving mutual fund schemes that invest predominantly in equity and equity-related securities. Investments up to Rs 1.5 lakh in ELSS funds qualify for tax deduction under Section 80C of the Income Tax Act, 1961.
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Banks & Financial Services Funds Banks & Financial Services are sector funds that majorly investing in financial sector companies. They are high risk high return funds as they invest in a single sector.
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Pharma & Healthcare Funds These sector funds invest in pharmaceutical companies, biotechnology firms, and related healthcare industries.
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Technology Funds These sector funds in equity and equity-related securities of technology and technology-dependent companies.
Infrastructure Funds Infrastructure Funds are thematic funds investing in companies and sectors that contribute to various infrastructure projects.
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Gold ETFs and FoF A Gold ETF is an exchange-traded fund (ETF) that aims to track the domestic physical gold price. They are passive investment instruments that are based on gold prices and invest in gold bullion.
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