25 equity mutual fund schemes completed 25 years; offer around 17% average returns

DSP Flexi Cap Fund completed 25 years last week. Launched in April 1997, the scheme offered around 19% annual returns. The news got ET Mutual Funds thinking how many Indian equity mutual fund schemes have completed 25 years and how much returns have they offered since inception.

According to data sourced from Ace MF, there are 26 equity mutual fund schemes that have completed 25 years in the Indian mutual fund industry. We have included only 25 schemes in the list as Quant Small Cap Fund (G) has been through a complete strategy change because of a take over. Quant Small Cap Fund was earlier Escorts Small Cap Fund, until Quant Mutual Fund took over Escorts MF in 2018.

Here’s a list of the 25 equity funds that have weathered various market cycles for the last 25 years:

Scheme Name CAGR returns since inception (%)
Aditya Birla SL Equity Advantage Fund(G) 17.429
Franklin India Bluechip Fund(G) 19.537
Franklin India Flexi Cap Fund(G) 17.851
Franklin India Prima Fund(G) 19.030
HDFC Capital Builder Value Fund(G) 14.136
HDFC Flexi Cap Fund(G) 18.416
HDFC Large and Mid Cap Fund-Reg(G) 12.088
HDFC TaxSaver(G) 23.348
HDFC Top 100 Fund(G) 18.859
ICICI Pru Multicap Fund(G) 14.640
Nippon India Growth Fund(G) 22.110
Nippon India Vision Fund(G) 17.923
SBI Large & Midcap Fund-Reg(G) 14.648
SBI Long Term Equity Fund-Reg(G) 15.556
SBI Magnum Equity ESG Fund-Reg(G) 14.463
SBI Magnum Global Fund-Reg(G) 14.330
Sundaram Tax Savings Fund-Reg(G) 16.009
Tata Ethical Fund-Reg(G) 16.020
Tata Large & Mid Cap Fund(G) 12.586
Tata Mid Cap Growth Fund(G) 12.047
Taurus Discovery (Midcap) Fund-Reg(G) 7.497
Taurus Flexi Cap Fund-Reg(G) 10.068
Taurus Largecap Equity Fund-Reg(G) 10.104
Taurus Tax Shield Fund-Reg(G) 11.472
JM Large Cap Fund-Reg(G) 8.666

Data: Ace MF

HDFC Tax Saver Fund topped the list with around 23% returns. Nippon India Growth Fund came next with 22% returns. Taurus Discovery Fund was the worst performer in the list. The scheme offered around 7.49% in the last 25 years. JM Large Cap Fund was another scheme that managed to offer only single-digit returns. The scheme offered around 8.66%,

As you can see, most of these funds managed to offer more than 12% returns in the last 25 years. Most mutual fund advisors and managers ask investors to use 12% returns for their calculations. And the fact that majority of schemes that have completed 25 years succeeded in offering respectable double-digit returns should reassure investors,

Does this mean you can blindly bet on these schemes? Mutual fund advisors don’t think so. They concede that schemes with a longer track record have an edge but they suggest taking a closer look at their performance.

“Many of these schemes have been through a lot of changes- like change in category, change in fund management, change in basic strategy etc. So, the CAGR factors all that. Moreover, before the Sebi re-categorisation, many of these schemes didn’t invest like they do now. So, one has to look at how these schemes have navigated through all these factors in the market. Schemes like Franklin India Prima Fund, have been among the consistent schemes. This scheme has been a mid cap fund, following the same trajectory since inception. So, you can easily see how this scheme has done in various market cycles,” says SR Srinivasan, Founder, SriNivesh, a financial planning firm based in Chennai.

Out of nearly Rs 14 lakh crore of AUM of equity funds, the funds with a history of 25 years manage around Rs1.56 lakh crore. Mutual fund advisors say that investors who want to keep a simple portfolio and not spend too much time churning their portfolio in the long run, can look at the good schemes among the above list and stay with them. However, they also say that the new categories and innovative products that we have today were not there 25 years ago, So investors should not take their investment decisions based solely on the longer track records.

“If we leave out thematic funds, the average return across these funds which are 25 years old is around 17% p.a. This reiterates how well equities can work for investors over the long term. The history and track record of mutual funds is an important factor at the time of investing; however, the age of the fund cannot be the only parameter for investing in it. There are many funds with less than 10 years of history that have delivered good returns and managed the downside very well too. The key however is to avoid making decisions based on short term outperformance or underperformance of funds. You have to believe more in how the funds have worked across different market cycles,” says Harshad Chetanwala, Founder, MyWealthGrowth, a wealth management firm, based in Mumbai.


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