These 11 equity schemes offered more than 30% returns in three years

Every investor wants double-digit or very high returns from their equity schemes. That is one reason why many new investors start investing when the markets are upbeat and equity mutual funds start offering very high returns. Now the market is in a tight range and most equity funds are offering single-digit returns. And most new investors, especially those who have started investing recently, are feeling dejected. Don’t lose heart – equity schemes still have the potential to offer higher returns. For example, 11 equity mutual funds have offered more than 30% returns in the last three years. Difficult to believe? Look at the numbers.

Around 11 equity schemes offered more than 30% returns in the three-year horizon, number crunching by ETMutualFunds showed. For the study, ETMutualFunds considered around 400 equity schemes that have been in the market for three years.

We considered trailing returns of all equity and equity-oriented schemes for a period of three years. We looked at equity scheme categories, including large cap, large & mid cap, small cap, multi cap, flexi cap, arbitrage funds, aggressive hybrid funds, focused funds, and ELSS funds. We considered regular plans and the growth option for the study. We then selected schemes that offered more than 30% returns.

Note, the exercise is done just to show that some equity schemes have offered more than 30% returns even in three years. Many schemes have offered double-digit returns during this period. Of course, some have also offered poor returns. However, investors should always invest in equity mutual funds with a long investment horizon. We recommend equity mutual funds to our readers only if they have an investment horizon of at least five to seven years. Investors should also keep in mind that the stock market does not offer steady or predictable returns year after year. The returns vary- they may be very high in a year and very poor in the next year. That is why we speak about average returns over a long period of time.

Coming back to our study, Quant Small Cap Fund, a small cap fund that follows a quant- based investment strategy, was the topper in the return chart. The scheme offered 47.25% returns in three years. ICICI Prudential Commodities Fund, a commodity-based thematic fund, offered 38.99% return in the same period.

Around three small cap funds offered more than 30% returns in the three-year horizon. The list also had one scheme each from contra, ELSS, flexi cap, infrastructure, mid cap, multi cap, technology, and thematic category. None of the large cap funds made it to the list.

Here’s how the toppers performed:

Source: ACE MF, Trailing returns as on February 27 2023

Note, this exercise is just to analyse the schemes offering more than 30% returns in a three- year horizon. This is not a recommendation. You need to include factors like your goals, horizons, and risk profile while choosing a scheme to make investment.