Mutual funds have significantly aided investors in accumulating wealth. This success has boosted investor confidence, leading to rapid growth in the industry.
Since 2020, retail investments in mutual funds have consistently risen each month, a trend that continued in August 2024.
According to AMFI data, total investment in equity schemes in August 2024 reached Rs 38,239 crore, marking a 3.3 percent increase from Rs 37,113 crore in July 2024.
SIP investments hit a record high of Rs 2,350 crore, marking the 14th consecutive month at this peak level.
Equity mutual fund schemes have given great returns to investors
Mutual fund schemes, particularly equity mutual funds, have provided great returns to investors.
With the exception of international equity schemes, the average return in all equity mutual fund categories has exceeded 15% CAGR (Compound Annual Growth Rate) over the last five years.
This is the rate needed to double an investment in five years. Experts say any investment can double in five years if it grows at a CAGR of 14.87% or higher.
These 10 Mutual Funds Can Double Your Money in 5 Years
If you want to achieve great returns through Mutual Fund investments, we will discuss various categories that have the potential to double your investment in the next five years.
When selecting a fund, remember that it’s important to prioritize both good returns and capital safety.
Here, we will highlight 10 types of Mutual Funds that can potentially double your money in 5 years. Let’s explore these 10 types of mutual funds.
Multi Cap Mutual Funds
Multi Cap Mutual Funds aim to invest in companies of various market caps, including large, mid, and small caps.
These funds maintain a fixed ratio in their portfolio, providing investors with a balanced and diversified investment.
With an average return of over 25% CAGR in the last five years, this category appears promising for investment.
2. Flexi Cap Funds
Flexi Cap Mutual Funds are a well-liked category of equity mutual funds. In these funds, the manager can invest in large cap, mid cap, and small cap companies in any proportion.
This flexibility allows them to adjust the portfolio based on market conditions, leading to higher profit expectations from investors. This category has delivered a CAGR of around 21% over the past five years.
3. Multi Asset Allocation Funds
These are hybrid funds that must invest at least 10% in at least three different asset classes.
The goal of these funds is to grow and diversify the portfolio through multi-asset allocation.
Multi-asset allocation funds carry lower risk compared to most equity and hybrid funds.
Over the last five years, these funds have achieved an average CAGR (Compound Annual Growth Rate) of 19.2%.
4. Large Cap Funds
A solid portfolio of equity mutual funds is not complete without large cap funds.
These funds focus solely on the stocks of large-cap companies, offering strength and stability to investors’ portfolios.
Over the last five years, these funds have delivered an average return of over 19%. This category is suitable for investors looking to minimize risk.
5. ELSS Fund
At least 80% of an ELSS fund is invested in equity, and these funds have a lock-in period of three years.
They also provide tax-saving benefits. Over the last five years, the average return for this category has been 22%, with many top-performing ELSS funds yielding over 28%.
6. Nifty Index Funds
Investors looking to minimize risk have a solid opportunity to double their money in five years by investing in Nifty index funds. These funds have provided an annual return of 18% over the last five years.
7. Sectoral Funds
These equity-based mutual funds focus on specific sectors like energy, utilities, and infrastructure, with a significant portion invested in banks and financial services.
Recently, private banks have underperformed, limiting these funds’ ability to fully benefit from the market rally.
However, fund earnings have increased considerably, and better performance in this sector is expected over the next three to five years.
8. Technology Mutual Funds
These funds have struggled recently. However, the sector is expected to benefit from declining interest rates globally.
9. Contra Funds
These funds invest contrary to current market trends, and Contra Mutual Fund Schemes have delivered an average annual return of 27% over the last five years.
10. MNC Funds
MNC companies have strong corporate governance and are not overvalued as a category. These funds have provided an annual return of 19% over the last five years.
