Equity mutual funds are one of the best ways to generate wealth in the long term. These strong equity mutual funds have grown at a CAGR of 40 percent in three years. Should you invest? Let’s go, let’s go, let’s go.
An indirect approach to exposure to the stock market is through investment in equity mutual funds. A mutual fund is basically a fund pooled from investors and invested in different asset classes by a specific fund manager. Before investing your hard-earned money, it is important to evaluate the past performance of mutual funds as not all of them can outperform the benchmark indices.
Although past performance does not guarantee the same level of performance in the future, it is important to know. Along those lines, here is a list of strong equity mutual funds that have returned a compound annual growth rate (CAGR) of more than 40 percent over the past three years.
Quant Small Cap Fund
Quant Small Cap Fund is a small cap investment fund managed by Quant Money Managers Ltd that invests in the stocks of companies with a total market capitalization of 251 and above, making it a large short cap fund. The fund has the largest weighting (12.72 percent) in construction and engineering businesses, which peaked in September 2022, at 19.41 percent.
Thanks for the latest Multi bag Following the outbreak, the fund’s three-year CAGR in the small-cap category is an unparalleled 57.28 percent. With an expense ratio of 0.62 percent, it has an AUM of Rs 2,355. The benchmark index of this fund is Nifty Smallcap 250 Total Return Index (TRI).
Quant Infrastructure Fund
Quant Infrastructure Fund, another fund from Quant Money Managers, is a thematic fund that focuses on the infrastructure sector, with a minimum AUM of Rs 778 crore. Ambuja Cements (9.28 percent), Asylum Industries (8.87 percent) and Adani Ports and Special Economic Zone Limited (8.68 percent) are the three most heavily weighted companies in the portfolio.
PSU banks have the largest exposure in the portfolio, which is one of the reasons for the increase in the fund’s returns in the last six months. The last three year CAGR is 44.66% with an expense ratio of 0.64%. Nifty Infrastructure is a growth fund with TRI as its benchmark index.
ICICI Prudential Commodities Fund
ICICI Prudential Commodities Fund is a thematic fund that invests in commodity based companies. As of November 2022, iron and steel companies had the largest weighting (31.12 percent) in the fund, with construction and engineering stocks second at 30.07 percent.
Coming to individual stocks, the top three holdings are JSW Steel, UltraTech Cement and Ambuja Cements. The fund has a minimum AUM of Rs 738 crore and a three-year CAGR of 44.1%. The expense ratio is slightly higher than average, at 1.07 percent, but this is justified by the fund’s performance. The fund’s benchmark index is Nifty Commodities TRI.