Best mutual funds: These 5 schemes across the equity spectrum gave highest returns in the past 5 years. Do you own any?

Before investing in a mutual fund scheme, investors tend to compare the past returns delivered by the scheme vis-a-vis others schemes in the same category. This gives an indication of the scheme's future growth potential. Although wealth advisors often point out that relying on the past returns alone is not advisable, they, however, play a key role in the investor's decision making process.

So, it is advisable to look beyond the past returns and examine other factors such as the category it belongs to, macro economic factors and reputation of fund house and even the past performance of fund manager in case of an active scheme.

Having said this, the past performance tends to influence the investing decision of retail investors. We, therefore, list out the five top performing schemes within the top five categories of equity mutual funds based on their asset size.

Upon a closer examination of mutual fund categories, we discovered that the highest AUM of mutual funds belong to these equity mutual fund categories: sectoral/thematic funds (4.67 lakh crore), flexi cap funds (4.44 lakh crore), mid cap funds (3.97 lakh crore), large cap funds (3.79 lakh crore) and small cap funds (3.28 lakh crore), reveals the latest AMFI (Association of Mutual Funds in India) data.

Here we list out the top performing five mutual fund schemes within each of these five categories.

Top Five Equity Mutual Fund Categories

I. Sectoral/thematic Mutual Funds

These schemes are meant to invest a minimum of 80 percent of assets in stocks of a particular sector/ theme. Within this category, sectoral funds refer to the schemes which invest in a particular sector of the economy such as infrastructure, banking, technology or pharmaceuticals. These funds focus on just one sector of the economy, they limit diversification and therefore, riskier.

 Thematic funds, on the other hand, select stocks of companies in industries which belong to a particular theme such as infra, service industries, PSUs or MNCs. These are the five top-performing sectoral mutual funds based on their past five year returns:

(Source: AMFI, returns as on Oct 11, 2024)

II. Flexi Cap Mutual Funds

These mutual funds are meant to invest a minimum of 65 percent of assets in equity and equity related instruments with exposure to large cap, mid cap and small cap stocks in no specific proportion.

The top performing flexi cap mutual fund schemes are as follows:

(Source: AMFI, returns as on Oct 11, 2024)

III. Mid Cap Mutual Funds

These refer to mutual fund schemes which invest a minimum of 65 percent of their assets in mid cap stocks.

These are the top performing mid cap funds based on their past five year returns:

(Source: AMFI, returns as on Oct 11, 2024)

IV. Large Cap Mutual Funds

These refer to mutual fund schemes which invest a minimum of 80 percent of assets in large cap stocks.

Here we list out the top performing large cap schemes based on their past five year returns

(Source: AMFI, returns as on Oct 11, 2024)

V. Small Cap Mutual Funds

These refer to mutual fund schemes which invest a minimum of 65 percent of their assets in small cap stocks.

Here we list out the top performing small cap schemes based on their past five year returns

(Source: AMFI, returns as on Oct 11, 2024)

Meanwhile, it is important to note that the past returns, although a good indicator of a mutual fund scheme's performance, do not assure any future returns. In other words, historical returns of a scheme may or may not continue in the future. 

So, investors are advised to take a calculated decision of investing based on an interplay of factors which include the fund house's reputation, category of scheme, whether scheme is active or passive, and the overall macro scenario of economy.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.