Mutual funds invest their money in stocks, bonds, and other securities. Different mutual funds give different returns based on where they invest and how they invest.
That’s why you need to understand which mutual funds give the best returns. In this story, we’ll take a look at historical data to see mutual funds that made the highest returns. However, remember that past success does not guarantee future success.
Before we start, it’s important to note that the higher the reward, the higher the risk. Speak to a wealth coach before you invest in any mutual fund. Quality advice is crucial for true wealth creation.
Note: Facts & figures are as of 06-01-2021. While we update our blogs regularly, download the Cube Wealth app for the latest information on mutual funds.
Equity mutual funds invest a large portion of their capital in stocks. Investing in equity across multiple companies as compared to a single stock can minimize the risk and increase potential returns.
This is why equity mutual funds are known to give higher returns than debt mutual funds whose exposure to stocks is fairly low. However, direct equity may give better returns if you invest with an advisor.
Historical data suggests that equity mutual funds may give returns between 9-15%. Other benefits include the low minimum investment amount, professional management, tax benefits, etc.
Equity funds are a broad category. Cube’s mutual fund advisor, Wealth First, has simplified equity funds into 3 categories based on risk:
Here’s a snippet of equity funds currently recommended by Wealth First on the Cube Wealth app.
Both international and global mutual funds invest in foreign markets with one important distinction: International mutual funds solely invest in foreign countries while global mutual funds invest in both foreign countries and India.
Geographical diversification gives you several benefits. You can use the currency strength of other countries to your advantage while distributing your risk at the same time.
Both international and global funds leverage the growth of high-quality companies like Facebook, Apple, Tesla, Google, and more. Thus, these funds are historically known to give returns between 15-25%.
Here’s a snippet of international and global funds currently recommended by Wealth First on the Cube Wealth app:
However, international and global funds carry a certain amount of risk that you should be aware of. Remember to speak to a wealth coach before putting your hard-earned money in any foreign investment.
Curious about international and global mutual funds? Read this blog to know more.
Debt funds may not be the Tesla of funds but they are certainly considered as dependable as a Toyota. Debt funds primarily invest in good debt that includes bonds, treasury bills, and other debt & fixed income securities.
Debt funds are relatively safe compared to equity, international and global mutual funds. A good debt fund is known to give 7-9% returns which is far better than a savings account or bank fixed deposit.
Certain debt funds like liquid and ultra short term mutual funds are used to fulfil short term investment goals since both the funds have a short portfolio maturation period.
Here’s a snippet of debt funds currently recommended by Wealth First on the Cube Wealth app:
Let’s assume you invest a lump sum of ₹10,00,000 in each of the investments mentioned below. Here’s what will happen over time:
Note: The above mentioned average returns are based on publicly available data as on 06-01-2021. Check the Cube Wealth app or speak to a wealth coach for the latest data.
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Mutual funds have the potential to give high returns with benefits like indexation benefits, low minimum investment amount, professional management, and more.
However, mutual funds are market-linked instruments which carry certain risks. A fund’s value may fluctuate over the short term but it is observed that mutual funds can be potentially lucrative over 5+ years.
It is advisable to assess your risk profile and understand your investment goals before investing in any mutual fund. Cube’s risk analysis quiz can help you know your risk appetite.
But Cube goes beyond just telling you how much risk you should take. The Cube Wealth app gives you access to curated mutual funds recommended by Cube’s mutual fund advisor, Wealth First.
These recommendations are based on your risk profile and goals. Download the Cube Wealth app or Speak to a wealth coach today to know more.
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on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!