Two equity schemes multiplied investors’ wealth by more than 10 times in 10 years

Two equity schemes have multiplied investors’ wealth by more than 10 times in a span of 10 years, an analysis by ETMutualFunds showed. Investors are always looking for investments that would double or triple their wealth in, say, five or 10 years. That is why ETMutualFunds looked at the returns offered equity over 10 years. That told us that two schemes helped investors to multiply their investments more than 10 times in a 10 year horizon.

We considered equity categories such as large cap, mid cap, small cap, and ELSS funds. We chose these categories because they were around before the recategorisation of mutual funds by Sebi. We did not consider large & mid cap, focused, flexi cap, multi cap, value/contra fund as these categories were introduced after the recategorisation. We only considered regular and growth options. Around 78 equity schemes from these categories completed 10 years in the market. We considered CAGR on lumpsum investment.

The two small cap schemes, Nippon India Small Cap Fund and SBI Small Cap Fund, have managed to multiply investors’ wealth by more than 10 times in 10 years. Nippon India Small Cap Fund, the largest scheme in the small cap category based on assets managed, offered 28.04% CAGR. To make it more simpler, if someone invested Rs 10,000 in Nippon India Small Cap Fund on July 10, 2013, the investment would have multiplied by around 11.86 times to Rs 1.18 lakh now. The scheme is benchmarked against Nifty Smallcap 250 – TRI. The benchmark offered 18.79% return during the same time period.

SBI Small Cap Fund, the third largest scheme in the category by assets managed, offered 26.18% CAGR. If Rs 10,000 was invested in SBI Small Cap Fund on July 10, 2013, the investment would have multiplied by 10.25 times to Rs 1.02 lakh now. The scheme is benchmarked against S&P BSE 250 Small Cap – TRI. The benchmark offered 17.18% return during the same time period.

Note, the above exercise is not a recommendation. The main purpose of the exercise is to find which equity schemes have multiplied investors in 10 years. One should not make investment or redemption decisions based on the above exercise. One should always consider risk appetite, investment horizon and goal before making investment decisions. Past performance of the scheme does not guarantee future performance.

Small cap schemes invest in very small companies or their stocks and are extremely risky. The small cap segment can be extremely volatile in the short term, but they have the potential to offer very high returns over a long period. Small cap schemes are recommended only to aggressive investors with a high-risk appetite and long investment horizon, say, around seven to 10 years. ETMutualFunds do not recommend small cap schemes to new and inexperienced investors.

If you are looking for recommendations, see Best small cap mutual funds to invest in 2023