Worried about long-term returns? No equity mutual fund lost money on 5- and 7-year SIPs

For investors worried about market volatility and the possibility of losing money in equity mutual funds, a longer investment horizon can make a significant difference. An analysis by ETMutualFunds showed that no equity mutual fund lost money on five- and seven-year SIPs.

ETMutualFunds analysed the SIP performance of around 194 equity mutual funds that have completed seven years of existence in the industry. Nearly 223 funds have completed five years of existence in the industry, including these 194 mutual funds.



The top five performers were smallcap funds in the last seven years. Quant Small Cap Fund, the topper in the list, delivered a return of 24.59% on SIP investments and gave a 14.38% return in the last five years. Bank of India Small Cap Fund, which gave 22.28% in the last seven years on SIP investments, offered a return of 16.84% in the last five years.

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Invesco India Smallcap Fund and Nippon India Small Cap Fund gave 20.79% and 20.24% respectively in the last seven years. These funds delivered a return of 16.20% and 12.39%, respectively, on SIP investments in the last five years.

DSP Small Cap Fund was the next one in the list that gave 19.41% in the last seven years and 14.21% in the last five years. Invesco India Midcap Fund, which delivered an 18.88% SIP return in the last seven years, gave 15.69% in the last five years.

HDFC Mid Cap Fund, the second largest mid cap fund based on the assets managed, gave 18.76% return on SIP investments in the last seven years and 13.94% in the last five years on SIP investments.

Nippon India Growth Mid Cap Fund, the fund with the highest NAV, offered 18.59% in the last seven years and 13.57% in the last five years on SIP investments.

Two funds from Quant Mutual Fund - Quant ELSS Tax Saver Fund and Quant Flexi Cap Fund - delivered 17.27% and 16.93%, respectively, in the last seven years. These funds gave 9.93% and 9.60% respectively in the last five years.

HDFC Flexi Cap Fund, the second largest flexi cap fund based on assets managed, delivered 16.52% and 11.84% in the last seven years and five years respectively. HDFC Small Cap Fund posted a gain of 16.15% on SIP investments in the last seven years and 8.89% in the last five years.

SBI Contra Fund, the largest and oldest contra fund, offered 15.54% and 7.96% in the last seven years and five years respectively on SIP investments. Quant Mid Cap Fund that posted a gain of 15.29% in the last seven years gave 7.37% in the last five years.

SBI ELSS Tax Saver Fund, the oldest ELSS fund, gained 14.16% in the last seven years on SIP investments and gave 9.54% in the last five years. Parag Parikh Flexi Cap Fund, the largest active fund and flexi cap fund based on assets managed, gave 14.04% and 9.69% in the last seven years and five years respectively.

Parag Parikh ELSS Tax Saver Fund gave 11.04% in the last seven years and 5.67% in the last five years. PGIM India Flexi Cap Fund was the last one in the list to deliver double digit gains in the last seven years. The fund posted a gain of 10.01% in the last seven years and 5.49% in the last five years.

Mirae Asset Large Cap Fund gave 8.25% in the last seven years and 4.63% in the last five years. Shriram ELSS Tax Saver Fund and Shriram Flexi Cap Fund were the last ones in the list as they posted the lowest gain in the last seven years. These schemes gave 5.76% and 5.75% respectively in the last seven years. In the last five years, these funds gave 2.17% and 1.96% respectively.

How have other schemes in the last five years performed?

The other 29 funds that have been in the industry for only five years gave returns ranging between 3.99% to 18.08%. Sundaram Large Cap Fund gave 3.99% return in the last five years and Bandhan Small Cap Fund gave 18.08% return in the same time period on SIP investments.

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Performance snapshot

Over the seven-year period, equity mutual fund SIP returns ranged from 5.75% to 24.59%. Quant Small Cap Fund delivered the highest return of 24.59%, while Shriram Flexi Cap Fund recorded the lowest at 5.75%.

Over the five-year period, returns ranged from 1.96% to 18.08%. Bandhan Small Cap Fund topped the list with 18.08%, while Shriram Flexi Cap Fund recorded the lowest return at 1.96%.

The analysis covered all equity and equity-oriented mutual funds, excluding sectoral, thematic and equity-oriented hybrid funds. Only regular and growth options were considered. SIP returns were calculated over five- and seven-year periods.

Note: the above exercise is not a recommendation. The exercise was done to find how equity mutual fund categories have performed on SIP investments.

One should not make investment or redemption decisions based on the above exercise. One should always consider their risk appetite, investment horizon, and goals before making any investment decisions.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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