The rate of returns delivered by mutual funds in the past is one of the key factors which help determine their performance. Although there are a number of other factors that collectively help investors evaluate the scheme’s performance, the returns delivered in the short, medium and long term also play a significant role at the same time.
Here we take a look at the equity saving fund.
At the outset, we first try to define what are equity savings funds.
Equity savings funds
These are hybrid mutual funds best suited for investors with a moderate risk appetite. These funds have lower risk in comparison to aggressive hybrid funds such as hybrid equity funds. Investors usually opt for them for low volatility and income.
As we can see in the chart below, Mirae Asset Equity Savings Fund gave 12.12 percent return, Mahindra Manulife Equity Savings Dhan Sanchay Yojana gave 11.26 percent return and SBI Equity Savings Fund gave 10.34 percent return.
The other fund schemes gave returns in the single digit percentage points. For instance, ICICI Prudential Equity Savings Fund gave 7.75 percent return and Invesco India Equity Savings Fund delivered 6.64 percent return.
|MF Schemes||Three-year-returns (%)|
|Mirae Asset Equity Savings Fund||12.12|
|Mahindra Manulife Equity Savings Dhan Sanchay Yojana||11.26|
|SBI Equity Savings Fund||10.34|
|L&T Equity Savings Fund||10.28|
|HDFC Equity Savings Fund||9.97|
(Regular returns as on July 29, 2022, source: AMFI)
In the long run, most mutual funds gave returns in the range of 5-7 percent in the past five years. For instance, IDBI Equity Savings Fund gave 5.68 percent and Tata Equity Savings Fund gave 6.23 percent. Other top-performing funds gave slightly higher returns as shown in the table below.
Kotak Equity Savings Fund gave 7.94 percent return and Edelweiss Equity Savings Fund delivered 7.86 percent return.
|Fund scheme||Five-year-returns (%)|
|Kotak Equity Savings Fund||7.94|
|Edelweiss Equity Savings Fund||7.86|
|SBI Equity Savings Fund||7.28|
|HDFC Equity Savings Fund||7.37|
|Axis Equity Saver Fund||7.71|
(Source: AMFI; regular returns as on July 29)
Two of the consistent performers in this category seem to be SBI Equity Savings Fund and HDFC Equity Savings Fund.
SBI Equity Savings Fund: It was launched on May 11, 2015. The fund has delivered a return of 7.89 percent as on July 31. In other words, if someone had invested ₹10,000 in the scheme at the time of inception, it would have grown to ₹17,244. Total AUM of the scheme is ₹2,374.62 crore.
HDFC Equity Savings Fund: The scheme was launched on September 17, 2004. The regular returns since inception are 9.39 percent. In other words, if someone had invested ₹10,000 then, it would have swelled to ₹49,776 now.
The top holdings as on June 30, 2022 are ICICI Bank, SBI, HDFC Bank, Infosys, RIL, L&T, Bharti Airtel, ITC, Axis Bank and NTPC. The total AUM are ₹2,502 crore.
(Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.)