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Three 5-star rated equity funds turn SIP of ₹10,000 to ₹9 lakh in 3 years


Equity mutual funds are favoured by investors that are willing to incur market-based risk in order to produce inflation and benchmark beating returns in the long run. However, before making a mutual fund investment, investors should be mindful of their objectives, time horizon, and risk tolerance; if their investment aim is short-term, debt products are a good fit. In general, equity funds are divided into 3 categories, large-cap, mid-cap, multi-cap and small cap, hence if you are a conservative investor then large-cap funds will be best suited, similarly flexi cap or multi-cap funds for moderate risk and mid-cap, small-cap funds for high-risk appetite investors. However, equity mutual funds carry a higher risk during the short term compared to the long term, thus it is always advised to hold investments in mutual funds, especially equity, for the long term. So by considering this as an example, here we have taken three 5-star rated equity mutual funds that have turned a monthly SIP of 10,000 to over 9 lakh in 3 years.

Canara Robeco Small Cap Fund – Direct Plan

The fund was established on February 15, 2019, and Value Research has given it a 5-star rating. Canara Robeco Small Cap Fund Direct – Growth’s assets under management (AUM) as of June 30, 2022 were around 3,455 Crores, and as of September 23, 2022, the fund’s NAV was 26.45. The benchmark for the fund is S&P BSE 250 SmallCap TRI, and the expense ratio is 0.47%. According to Value Research, an upfront investment of 1 lakh and a monthly SIP of 10,000 made in the fund three years ago would have provided you with a return of 9,53 lakh. Over the past three years, the fund has produced an annualised return of 43.48%. 

The Canara Robeco Small Cap Fund Direct’s growth returns over the past year were 15.81% higher than the benchmark performance of 1.69% and the category average of 5.84%. It has generated average yearly returns of 30.97% since its inception. The fund’s sector holdings include the services, financial, capital goods, materials, and construction industries. Can Fin Homes Ltd., Grindwell Norton Ltd., City Union Bank Ltd., and Cera Sanitaryware Ltd. are the top 5 holdings of the fund. The fund is exposed to domestic equities to a 93.73% extent, with 6.48% of its holdings in large cap, 20.65% in mid-cap, and 66.6% in small-cap stocks.

Bank of India Small Cap Fund – Direct Plan

The fund was introduced on December 19, 2018, and Value Research has given it a 5-star rating. Bank of India Small Cap Fund Direct – Growth’s assets under management (AUM) as of June 30, 2022 were around 354 Crores, and as of September 23, 2022, the fund’s NAV was 28.93. The benchmark for the fund is S&P BSE 250 SmallCap TRI, and the expense ratio is 1.12%. An upfront investment of 1 lakh and a SIP of 10,000 that was begun three years ago would now have provided you with a return of 9,25 lakh as the fund has achieved an annualised return of 41.49% over the past three years, as per Value Research. 

The 1-year returns of the Bank of India Small Cap Fund Direct – Growth are 8.56% higher than the category average of 5.84% and the benchmark performance of 1.69%. It has produced 32.79% yearly returns on average since its debut. Capital Goods, Financial, Materials, Chemicals, and Automobile sectors make up the fund’s sector allocation. ICICI Bank Ltd., Timken India Ltd., City Union Bank Ltd., Home First Finance Company India Ltd., and Phoenix Mills Ltd. are the fund’s top 5 holdings. With 5.73% of its holdings in large cap, 20.5% in mid-cap, and 69.25% in small-cap companies, the fund is 95.48% exposed to domestic equities. The fund’s exposure to debt securities is 0.04%.

PGIM India Midcap Opportunities Fund – Direct Plan

The fund was introduced on December 2, 2013, and Value Research has given it a 5-star rating. As of June 30, 2022, PGIM India Midcap Opportunities Fund Direct-Growth had assets under management (AUM) at 6,614 Crores, and as of September 23, 2022, the fund’s NAV was 50.08. The product is benchmarked against S&P BSE 150 MidCap TRI and has an expense ratio of 0.4%. The return would now be 9,08 lakh, reflecting an annualised return of 40.28%, if an upfront investment of 1 lakh with a monthly SIP of 10,000 had been made in the fund three years before. 

In comparison to the category average of 4.93 and the benchmark performance of 2.57% over the past year, PGIM India Midcap Opportunities Fund Direct-Growth returns were 6.53%. It has generated average yearly returns of 20.06% since its inception. The fund has a sector allocation strategy for materials, financial, automobile, financial, and capital goods industries. The top five holdings of the fund are ABB India Ltd., TVS Motor Co. Ltd., Timken India Ltd., Indian Hotels Co. Ltd., and Varun Beverages Ltd. The fund is 93.98% exposed to domestic stocks as 8.53% of its holdings are large-cap firms, 67.31% are mid-cap companies, and 18.14% are small-cap companies. Debt securities represent 7.41% of the fund’s exposure level.

 

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