Low-cost funds are those which generate better returns and have a low expense ratio vis-a-vis their category. Cost in a mutual fund is the total expense ratio which an investor has to bear for investing in various mutual fund schemes. Investors willing to put money in mutual funds should consider these two essential criteria - low expense ratio and high returns.
According to Amfi (Association of Mutual Funds in India) data published in February, there are currently 435 active equity mutual fund schemes across 11 categories. An analysis of Ace Equities' growth funds’ data shows that 213 schemes have completed three years or more while 58 schemes have not yet completed three years. ETMarkets brings five funds with the highest returns in the last three years along with their expense ratios.
The components of the expense ratio include the fund manager's fee, marketing and distribution expenses, legal & audit costs along with other operating costs. An expense ratio also depends upon the type of equity mutual fund scheme i.e. direct or growth plans. The former has a lower expense ratio and may vary from fund to fund and depend upon the activity in a particular fund. A more aggressively-managed fund could have a higher expense ratio.
5 low-cost large & midcap mutual funds with highest 3-year returns.
Here are 5 mutual fund schemes with highest 3-year returns along with their expense ratios:
Quant Small Cap Fund(G) tops the chart with over 39% returns followed by Quant Mid Cap Fund(G), Nippon India Small Cap Fund(G), Quant Flexi Cap Fund(G) and Motilal Oswal Midcap Fund-Reg(G) in the same pecking order.
There are 18 schemes across categories which have delivered more than 25% CAGR in the last three years and have expense ratios lower than 2. Quant Large & Mid Cap Fund(G) (27.55%) has delivered over 25% returns but its expense ratio is slightly above 2. The rest have lower than 25% returns with an expense ratio higher than 2 in many cases.
Taurus Flexi Cap Fund-Reg(G) has the highest expense ratio of 2.64 and its returns in the said period stand at 16.68%.
Also Read: Focused vs thematic funds: Who holds the edge and top 5 funds in each category
Inputs from Surbhi Khanna
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
FAQs
Here are 5 mutual fund schemes with highest 3-year returns along with their expense ratios: Quant Small Cap Fund(G) tops the chart with over 39% returns followed by Quant Mid Cap Fund(G), Nippon India Small Cap Fund(G), Quant Flexi Cap Fund(G) and Motilal Oswal Midcap Fund-Reg(G) in the same pecking order.
Which mutual fund has the best returns in 3 years? ›
As per data available on the AMFI website, in the large-cap category, Nippon India Large Cap Fund leads the way with a direct three-year return of 25.38%, followed closely by HDFC Top 100 Fund at 21.82%, ICICI Prudential Bluechip Fund at 21.74%, JM Large Cap Fund at 21.29%, and Invesco India Largecap Fund at 20.29%.
What are the top 5 performing mutual funds? ›
5 Best Mutual Funds to Buy Now
| Mutual Fund | Assets Under Management | Expense Ratio |
|---|
| Vanguard Total Stock Market Index Fund (VTSAX) | $1.6 trillion | 0.04% |
| Fidelity 500 Index (FXAIX) | $512.4 billion | 0.015% |
| Fidelity ZERO International Index (FZILX) | $4 billion | 0% |
| American Funds Bond Fund of America (ABNDX) | $82.6 billion | 0.62% |
1 more rowWhat is the 3-year lock-in period? The 3-year lock-in period applies specifically to Equity Linked Saving Schemes (ELSS) - a type of tax-saving mutual fund. It restricts redeeming your investment within the first 3 years from purchase.
Which Midcap mutual funds has generated highest returns in the last 3 years? ›
Motilal Oswal Midcap Fund Direct Growth
Fund Performance: The Motilal Oswal Midcap Fund has given 36.38% annualized returns in the past three years and 28.69% in the last 5 years. The Motilal Oswal Midcap Fund comes under the Equity category of Motilal Oswal Mutual Funds.
Which investment is best for 3 years? ›
Best Investment Plan for 3 Years
| Short-Term Investment Instruments | Returns |
|---|
| Fixed Deposits | 4-7% |
| Fixed Maturity Plans | 6-8% |
| P2P Lending | 8-12% |
| Gold Investment | 3-4% |
3 more rowsFeb 27, 2024
Around 36 equity mutual funds doubled investors' wealth in a three-year horizon, according to data by ACE MF. Here are the top 10 schemes. The scheme offered a 196% absolute return in a three-year horizon. A lump sum investment of Rs 1 lakh made in the scheme would have been Rs 2.95 lakh in three years.
What is the safest investment with the highest return? ›
These seven low-risk but potentially high-return investment options can get the job done:
- Money market funds.
- Dividend stocks.
- Bank certificates of deposit.
- Annuities.
- Bond funds.
- High-yield savings accounts.
- 60/40 mix of stocks and bonds.
Top Mutual Fund Houses in India
| S.No. | Mutual Fund House |
|---|
| 1. | SBI Mutual Fund |
| 2. | ICICI Prudential Mutual Fund |
| 3. | HDFC Mutual Fund |
| 4. | Aditya Birla Sun Life Mutual Fund |
6 more rowsMay 16, 2024
Best retirement income funds
- Vanguard LifeStrategy Income Fund (VASIX).
- Vanguard Target Retirement Income Fund (VTINX).
- Fidelity Freedom Index Income Fund Investor Class (FIKFX).
- Schwab Monthly Income Fund Income Payout (SWLRX).
- Schwab Monthly Income Fund Flexible Payout (SWKRX).
Typically, the ideal holding period for an equity mutual fund is considered anywhere between a minimum of 3-5 years. But data shows that only investments in 3% of the units continued for more than 5 years.
Can I withdraw money from a mutual fund anytime? ›
Can I withdraw money from mutual funds anytime? Yes, you can withdraw money from most mutual funds anytime, unless they have a lock-in period.
What happens after 3 years in ELSS? ›
ELSS investments held for more than three years are considered Long-Term Capital Assets and any gains from redemption are subject to Long-Term Capital Gains Tax (LTCG) at a rate of 10% on gains exceeding Rs 1 lakh. Additionally, the gains are eligible for indexation benefits, reducing the tax liability.
What are the top 5 mutual funds in last 3 years? ›
The top performing mutual funds over the last three years include Nippon India Small Cap Fund, Quant Small Cap Fund, HSBC Small Cap Fund, Tata Small Cap Fund, and ICICI Pru BHARAT 22 FOF.
Which manager's small cap fund gave 40% CAGR returns in 3 years? ›
Canara Robeco is the 16th largest fund house in the MF industry and its schemes have been doing well recently. Take the case of Canara Robeco Small Cap Fund—managed by Bhandwaldar and Ajay Khandelwal. The scheme has delivered 40% compounded annual growth rate (CAGR) returns in just three years.
Which mutual funds give 30% return? ›
4 equity mutual funds offered over 30% returns in 3 & 5 years
- IANS. 1/6. Top Gainers. ...
- iStock. 2/6. Nippon India Small Cap Fund. ...
- iStock. 3/6. Quant Flexi Cap Fund. ...
- Getty Images. 4/6. Quant Mid Cap Fund. ...
- iStock. 5/6. Quant Small Cap Fund. ...
- Agencies. 6/6. Interested to invest?
Here's the list of top 10 best mutual funds to invest in 2024:
- HDFC Mid-Cap Opportunities Fund.
- Parag Parikh Flexi Cap Fund.
- ICICI Pru Bluechip Fund.
- HDFC Flexi Cap Fund.
- Nippon India Small Cap Fund.
- HDFC Balanced Advantage Fund.
- ICICI Prudential Equity & Debt Fund.
- ICICI Prudential Corporate Bond Fund.
General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.
