Before investing in a mutual fund scheme, it is vital to examine the past returns of that scheme and compare the same with similar schemes in the same category. For instance, if an investor wants to invest in a large cap mutual fund, it is recommended to compare the past few years’ returns delivered by large cap mutual funds.
Although historical returns do not guarantee future returns, they tend to give an indication of how different schemes may perform in future.
Aside from past returns, other factors which are worth considering by the mutual fund investors include the reputation of the fund house, macro-economic factors, whether the scheme is active or passive and past performance of the fund manager (in case of active scheme), among others.
Large Cap Funds
Here we list out some large cap mutual funds which have delivered over 20 percent return in the past 3 years. Those who are not aware, large cap funds refer to the schemes which invest 80 percent of their assets in large cap stocks.
(Source: AMFI; direct returns as on July 11)
As one can see in the list above, there are seven large cap mutual funds which have delivered over 20 percent annualised return in the past three years.
Nippon India Large Cap Fund delivered 23.98 percent per annum and Invesco India Large Cap Fund gave 21.59 percent per annum. Other schemes which gave over 20 percent return in the past three years include Edelweiss Large Cap Fund and Baroda BNP Paribas Large Cap Fund.
Notably, the historical returns do not guarantee a scheme’s future returns. This means just because a scheme has delivered exceptional performance in the past three years, it does not mean it will continue to perform at the same pace in future as well.
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