If you’re looking for a smart way to build wealth over time, Systematic Investment Plans (SIPs) in mutual funds might be one of the best options. By investing a fixed amount each month, you can gradually accumulate significant wealth over the years, especially with equity mutual funds known for high long-term returns. Looking back at the last 15 years, several equity mutual funds have delivered impressive returns, turning monthly SIPs of Rs 10,000 into over Rs 1 crore. Here are the top five funds that have consistently outperformed and helped investors multiply their wealth.
1. SBI Small Cap Fund: High Growth in Small Caps
SBI Small Cap Fund has been one of the best-performing funds in the small-cap category. Over the last 15 years, this fund has provided an impressive annualized return of 23.43% for SIP investors. With a monthly SIP of Rs 10,000, the total investment of Rs 18 lakh over 15 years would have grown to Rs 1.29 crore. Even a one-time investment of Rs 1 lakh 15 years ago would have appreciated to Rs 18.63 lakh, showcasing the potential of small-cap stocks over the long term.
- 15-Year SIP Annualized Return: 23.43%
- Total Value of Rs 10K Monthly SIP: Rs 1.29 crore
- Lump Sum Growth: Rs 1 lakh invested 15 years ago is now Rs 18.63 lakh
- Benchmark: BSE 250 SmallCap TRI
- Expense Ratio: 1.56% (September 2024)
The fund’s focus on quality small-cap stocks with growth potential has driven its high returns, making it a top choice for long-term investors willing to take moderate risks.
2. Edelweiss Mid Cap Fund: Strong Mid-Cap Performer
Edelweiss Mid Cap Fund has delivered annualized returns of 21.76% over 15 years. Investors who maintained a monthly SIP of Rs 10,000 would now have a portfolio valued at Rs 1.12 crore. For lump sum investors, an initial Rs 1 lakh investment would have grown to Rs 16.45 lakh in the same period.
- 15-Year SIP Annualized Return: 21.76%
- Total Value of Rs 10K Monthly SIP: Rs 1.12 crore
- Lump Sum Growth: Rs 1 lakh invested 15 years ago is now Rs 16.45 lakh
- Benchmark: NIFTY Midcap 150 TRI
- Expense Ratio: 1.72% (September 2024)
Edelweiss Mid Cap Fund has tapped into high-growth mid-cap companies, which has led to consistent returns, making it suitable for those looking to capitalize on India’s mid-cap market.
3. Franklin Build India Fund: A Focus on Infrastructure
Franklin Build India Fund has provided annualized returns of 21.36% over the last 15 years. A monthly SIP of Rs 10,000 in this fund would now be worth Rs 1.08 crore. This fund, which primarily invests in infrastructure and related sectors, has benefitted from India’s growing infrastructure development.
- 15-Year SIP Annualized Return: 21.36%
- Total Value of Rs 10K Monthly SIP: Rs 1.08 crore
- Lump Sum Growth: Rs 1 lakh invested 15 years ago is now Rs 14.04 lakh
- Benchmark: BSE India Infrastructure TRI
- Expense Ratio: 1.98% (September 2024)
For investors looking to tap into India’s infrastructure growth, Franklin Build India Fund has been a strong performer, leveraging growth across industries that fuel the country’s economic development.
4. Quant Small Cap Fund: Consistent Growth in Small Caps
Quant Small Cap Fund, like SBI Small Cap, focuses on the small-cap segment. It has generated annualized returns of 21.32% for SIP investors over 15 years. Those investing Rs 10,000 per month in this fund would have seen their investment grow to Rs 1.07 crore. A one-time investment of Rs 1 lakh 15 years ago would now be worth Rs 13.83 lakh.
- 15-Year SIP Annualized Return: 21.32%
- Total Value of Rs 10K Monthly SIP: Rs 1.07 crore
- Lump Sum Growth: Rs 1 lakh invested 15 years ago is now Rs 13.83 lakh
- Benchmark: NIFTY Smallcap 250 TRI
- Expense Ratio: 1.59% (September 2024)
Quant Small Cap Fund has managed consistent returns by identifying and investing in promising small-cap companies, giving it the edge for investors looking for high growth in small-cap stocks.
5. HDFC Mid-Cap Opportunities Fund: Long-Term Mid-Cap Gains
HDFC Mid-Cap Opportunities Fund has given annualized returns of 21.17% over 15 years. A Rs 10,000 monthly SIP in this fund would have grown to Rs 1.06 crore. For lump sum investors, Rs 1 lakh invested at the start would now be worth Rs 17.06 lakh.
- 15-Year SIP Annualized Return: 21.17%
- Total Value of Rs 10K Monthly SIP: Rs 1.06 crore
- Lump Sum Growth: Rs 1 lakh invested 15 years ago is now Rs 17.06 lakh
- Benchmark: NIFTY Midcap 150 TRI
- Expense Ratio: 1.39% (September 2024)
HDFC Mid-Cap Opportunities Fund, with its diversified mid-cap focus, is ideal for those looking for steady gains from mid-sized companies in India.
Is SIP the Right Choice for You?
The examples above show that SIPs can be a powerful wealth-building tool. While these funds have shown strong performance, it’s crucial to remember that past performance doesn’t guarantee future returns. SIPs work best for those who can invest consistently over a long period and are willing to endure market fluctuations. With the discipline to invest monthly and hold for the long term, even moderate contributions can grow into substantial wealth.
How to Choose the Right Fund
When selecting a SIP or mutual fund, consider your financial goals, risk tolerance, and investment horizon. It’s always advisable to consult with a financial advisor, as they can help you assess which funds best align with your goals. Also, look at the expense ratio, as high costs can eat into your returns.
The above funds have proven to be excellent for wealth creation over 15 years, transforming monthly SIPs into impressive crores. However, market conditions can change, so diversify your investments and ensure you’re comfortable with the potential risks involved.
Final Thoughts
Mutual funds, especially through SIPs, offer a structured approach to wealth creation. By committing to a monthly SIP, you can grow your money steadily over the years, and with the right choice of funds, you could achieve substantial returns on your investments. Always remember to stay informed, review your investments periodically, and make adjustments as needed.
