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Which Mutual Funds Give Highest Returns?

Find out how different mutual funds like equity funds, international funds, global funds, and debt funds perform in the long run. See the best performing funds currently being recommended on the Cube Wealth app!
January 6, 2021

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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.

Types Of Mutual Funds That Give Highest Returns

1. Equity 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:

  1. Conservative
  2. Moderate
  3. Aggressive
  4. Tax saving (ELSS)

Here’s a snippet of equity funds currently recommended by Wealth First on the Cube Wealth app.

Equity Mutual Funds That Give The Highest Returns

 

Equity Fund Type

Equity Fund Name

3-year Returns

5-year Returns

Conservative

Mirae Asset Large Cap Fund

7.96%

12.63%

Moderate

Axis Focused 25 Fund

11.23%

15.12%

Aggressive

Kotak Emerging Equity Fund

5.86%

12.58%

ELSS

Kotak Tax Saver Fund

7.22%

11.27%


2. International & Global Funds

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:

International & Global Funds That Give The Highest Returns

 

Fund Type

Fund Name

3-year Returns

5-year Returns

International

Franklin India Feeder - Franklin U.S. Opportunities Fund

26.01%

17.85%

International

Edelweiss Greater China Equity Off-shore Fund

22.06%

19.94%

Global

PGIM India Global Equity Opportunities Fund

29.24%

17.98%

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. 

3. Debt Funds

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:

Debt funds That Give The Highest Returns

 

Debt Fund Type

Fund Name

3-year Returns

5-year Returns

Debt

ICICI Prudential Corporate Bond Fund

8.71%

8.56%

Debt

IDFC Dynamic Bond Fund

9.50%

9.25%

Liquid

DSP Liquidity Fund

6.10%

6.52%


Comparison Of Mutual Funds With Highest Returns Versus Traditional Investments


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: 

 

Investment Type

Average Historical Returns

Returns After 5 Years

Returns After 10 Years

Returns After 20 Years

Equity Funds

12%

₹1,762,342

₹3,105,848

₹9,646,293

International & Global Funds

18%

₹2,287,758

₹5,233,836

₹27,393,035

Debt Funds

8%

₹1,469,328

₹2,158,925

₹4,660,957

Fixed Deposits

5%

₹1,276,282

₹1,628,895

₹2,653,298

Savings Account

3%

₹1,159,274

₹1,343,916

₹1,806,111

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.

Watch this video to know how busy professionals can grow rich


Conclusion

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.

Watch this video to avoid a common mistake that most investors make


Shriram Shekhar
Shriram is a Consultant at CubeWealth. He has developed cutting edge IT products for over 2 years before turning to his passion for the written word. His love for philosophy, developing products, and empowering people through quality content is what got him to CubeWealth.

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