Returns of 15% or more from funds | Value Research Mutual fund returns are uncertain and their past performances may not be repeated
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Returns of 15% or more from funds

Mutual fund returns are uncertain and their past performances may not be repeated

I am considering investing an amount of ₹1 lakh per month for the next 12 years. What will be this investment worth at the end of 12 years? I would like to know whether there funds that can give a CAGR of 15 percent or more and have they been around for a long time? Is it fair to expect a return of 15 % or more ( given past history of the funds ) on a CAGR basis?
- Sanjay Arora

Mutual fund returns are uncertain and their past performances may not be repeated. However, when it comes to choosing funds for investment, we search for the best performers in the category. While there is no guarantee, we can rely on funds with compelling history and invest in them. Revisiting the investment portfolio once a year or so is also necessary to replace bad performers with good ones. This will reduce your chances of losing your money.

You have a long investment tenure of 12 years. You can build an Aggressive Growth Portfolio which invests 50 per cent into equity mid & small cap schemes and the rest in large & mid cap funds. You can avoid investing in debt for now. We have found funds with a minimum age 7-yr, fetching 5- yr and subsequent year's CAGR of 15% or more. It gives us a long list of 35 funds. Here are the top 15 funds out of the list.

Fund NameCategory5-Yr Return (%)7-Yr Return (%)10-Yr Return (%)
Birla Sun Life Mid CapEQ-M&SC12.5216.9717.85
Canara Robeco Emerging EquitiesEQ-M&SC19.9821.5417.22
Franklin India Flexi CapEQ-LC&MC13.116.2217.24
Franklin India PrimaEQ-M&SC17.3619.4415.36
Franklin India Prima PlusEQ-LC&MC14.1815.8618.28
ICICI Prudential MidcapEQ-M&SC13.9914.7614.62
ICICI Prudential Value DiscoveryEQ-M&SC17.6422.9419.54
L&T MidcapEQ-M&SC15.5718.1616.53
Reliance Equity OpportunitiesEQ-M&SC14.5119.6819.23
SBI Magnum GlobalEQ-M&SC17.5718.7718.38
SBI Magnum MidcapEQ-M&SC18.5816.2415.74
Sundaram S.M.I.L.E.EQ-M&SC13.6517.3717.68
Sundaram Select MidcapEQ-M&SC16.3220.0620.96
Tata Midcap GrowthEQ-M&SC16.9417.1415.44
UTI Mid CapEQ-M&SC18.4120.3716.46
*as on September 3, 2015

Looking at historical returns,above funds seem safe however, there is no guarantee. You may invest in 3 to 4 funds of your choice and once you near your goal term, switch to debt to freeze returns and be safe. Future Value of your monthly investment of 1 lakh rupees at end of each year is given in table below.

YearTotal Instalments paidat 12% Returns (%)at 15% Returns (%)
1120000012682501286036
2240000026973462778808
3360000043076884511551
4480000061222616522839
5600000081669678857451
672000001047099311567362
784000001306722714712904
896000001599272918364106
9108000001928925822602255
10120000002300386927521706

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