This Children’s Day, November 14, 2024, presents a great opportunity for parents to invest in their child’s financial future. With mutual fund schemes crafted specifically for children’s education and future goals, parents can make strategic investments that grow over time. Several children’s mutual fund schemes have delivered strong returns this past year, making them ideal options for parents seeking reliable and profitable avenues for long-term growth. Below are the top-performing children’s funds based on annual returns, asset size, and risk ratings, along with a guide to help parents make informed decisions.
Top-Performing Children’s Mutual Funds in 2024
These funds have been selected based on data from the Association of Mutual Funds in India (AMFI) as of November 13, 2024. Each of these funds has delivered annual returns above 20% and holds an asset base exceeding ₹300 crore.
1. SBI Magnum Children’s Benefit Fund – Investment Plan
- 1-Year Return (Direct Plan): 34.94%
- Benchmark Index: CRISIL Hybrid 35+65 Aggressive Index (20.94% benchmark return)
- Asset Under Management (AUM): ₹2,753.75 crore
With the highest returns among children’s mutual funds, SBI Magnum Children’s Benefit Fund is built for aggressive long-term growth with a hybrid approach. The fund invests in a mix of equity and debt, helping balance growth with stability.
2. ICICI Prudential Child Care Fund – Gift Plan
- 1-Year Return (Direct Plan): 29.51%
- Benchmark Index: NIFTY 50 Hybrid Composite Debt 65:35 Index (17.97% benchmark return)
- AUM: ₹1,293.82 crore
The ICICI Prudential Child Care Fund aims to offer strong returns by focusing on a balanced portfolio of equity and debt, suitable for parents who seek higher growth with managed risk.
3. UTI Children’s Equity Fund
- 1-Year Return (Direct Plan): 25.29%
- Benchmark Index: NIFTY 500 Total Return Index (27.72% benchmark return)
- AUM: ₹1,102.63 crore
This fund leans towards equity investments, making it suitable for parents who can handle moderate risk levels in return for potentially high gains over a long period.
4. HDFC Children’s Gift Fund
- 1-Year Return (Direct Plan): 23.76%
- Benchmark Index: NIFTY 50 Hybrid Composite Debt 65:35 Index (17.97% benchmark return)
- AUM: ₹9,640.62 crore
HDFC’s children’s fund is among the largest with over ₹9,000 crore in assets, offering consistent growth through a balanced portfolio. This fund is appealing to parents aiming for steady returns over time.
5. Aditya Birla Sun Life Bal Bhavishya Yojana
- 1-Year Return (Direct Plan): 22.63%
- Benchmark Index: NIFTY 500 Total Return Index (27.72% benchmark return)
- AUM: ₹1,074.23 crore
Aditya Birla’s Bal Bhavishya Yojana combines equity with debt, providing a balanced approach to growth, appealing to parents looking for steady returns with manageable risks.
6. Axis Children’s Fund
- 1-Year Return (Direct Plan): 21.40%
- Benchmark Index: NIFTY 50 Hybrid Composite Debt 65:35 Index (17.97% benchmark return)
- AUM: ₹891.29 crore
With a slightly lower return but balanced risk, Axis Children’s Fund is a dependable option for conservative parents who prefer stability along with growth potential.
7. Tata Young Citizens Fund
- 1-Year Return (Direct Plan): 20.90%
- Benchmark Index: NIFTY 500 Total Return Index (27.72% benchmark return)
- AUM: ₹365.84 crore
The Tata Young Citizens Fund is well-suited for parents looking to invest in a moderately aggressive fund, offering a solid balance of risk and return for long-term wealth creation.
Consider Risk Levels When Investing in Children’s Funds
While these funds have delivered impressive returns, it’s essential to consider the risk level indicated by the riskometer. Children’s funds tend to have high equity exposure, putting them in the “very high risk” category. However, some funds use a hybrid approach, balancing equity with debt to provide more stability. Understanding the share of equity and debt in each fund is crucial to ensure it aligns with your risk tolerance.
Choosing the Right Fund for Your Child’s Future
Before investing in a children’s fund, it’s important to look into several factors:
- Risk and Return Comparison: Review the fund’s past returns against the benchmark index to evaluate its performance.
- Investment Strategy: Analyze the fund’s strategy and investment goals, as some may be more aggressive while others take a balanced approach.
- Long-Term Vision: Children’s funds typically require a long investment horizon. This makes them ideal for parents looking to accumulate wealth for goals like education and future milestones.
Is a Children’s Fund Right for You?
Children’s mutual funds are specifically designed to help parents build a secure financial foundation for their children’s futures. By leveraging the growth potential of equity markets while maintaining risk balance, these funds can be a strong component of a long-term financial plan. However, consult a financial advisor to ensure the fund aligns with your goals and risk preferences.
(Disclaimer: This article is for informational purposes only and not a recommendation for specific funds. Always consult an investment advisor before making decisions.)
