Evaluating the performance of a mutual fund calls for assessing the returns, among other factors.
There are several key factors, besides the quantum of returns, such as the category of fund, fund house & fund manager’s credibility which go into evaluating the scheme’s performance.
Here we take a look at the children’s funds and their past returns in the past three and five years. But prior to that, let us define what are these funds.
Children’s Funds are primarily the mutual fund schemes that offer returns so as to meet expenses such as that of marriage and education. This leads to long term capital appreciation and they usually fall under the broader category of hybrid or balanced mutual funds.
The top-performing funds gave returns in the range of 12-16 percent in the past three years.
As one can see in the table, UTI Children's Career Fund-Investment Plan gave a little over 16 percent return in past three years, Tata Young Citizens Fund gave 15.63 percent return and HDFC Children’s Gift Fund gave 14.95 percent return.
|Mutual fund scheme||3-year-returns|
|UTI Children's Career Fund-Investment Plan||16.12|
|Tata Young Citizens Fund||15.63|
|HDFC Children's Gift Fund||14.95|
|Axis Children’s Gift Fund||12.53|
The top-performing funds gave returns in the range of 9-12 percent in the past five years.
As one can see in the chart below, HDFC Children's Gift Fund gave 11.54 percent return, Axis Children's Gift Fund gave 10.99 percent return and UTI Children's Career Fund-Investment Plan gave 10.77 percent return.
|HDFC Children's Gift Fund||11.54|
|Axis Children's Gift Fund||10.99|
|UTI Children's Career Fund-Investment Plan||10.77|
|SBI Magnum Children's Benefit Fund - Savings Plan||9.20|
(Source: AMFI data on July 15, 2022)
Let us take a look at one of the top performing funds in this category:
HDFC Children’s Gift Fund: This fund is meant for building a corpus for children’s future with a lock-in period of at least five years or till the child attains the age of majority. Around 65-80 percent of the total assets of the scheme is invested in equities and equity-related instruments, while the balance is invested in debt and money market instruments.
The scheme has given a return of 16.11 percent since inception on March 2, 2001. This means the value of investment of ₹10,000 made at the time of fund launch would have grown to ₹2,36,428.
The benchmark index is NIFTY 50 Hybrid Composite Debt 65:35 Index. The fund manager is Chirag Setalvad.
(Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.)