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5 equity mutual funds that can make you RICH

Last updated on: November 9, 2012 19:34 IST

5 equity mutual funds that can make you RICH

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Salil Dhawan

For a retail investor, investing in mutual funds through systematic investment plan (SIP) is the best way to ride over the volatilities of equity market and create a sizeable corpus for their long term goals. Equity works best over the long term and retail investors must take exposure to equity market to achieve goals such as child education and marriage, retirement planning , buying a house to name a few.

Here's a look at five equity mutual funds spread across different fund categories which an investor can rely upon as part of her/his equity mutual fund portfolio and are expected to give pretty decent returns over the long run.

1. Quantum Long Term Equity Fund (G)

Quantum Mutual Fund offering Quantum Long Term Equity Fund primarily aims to generate consistent good returns by investing in companies in large and mid-cap space. Excellent fund house, fund manager and lower expense ration of 1.25 per cent effective from June 1, 2011 makes it lot more compelling choice in comparison to its peers. Investors should consider investing in this fund from long-term perspective. Top stock holdings include Bajaj Auto , HDFC Bank and HDFC.

With an annualised return of 12 per cent and 9.5 per cent over a 3-year and 5-year period respectively, Quantum Long Term Equity Fund (G) is able to contain downside well and is also able to fetch good returns in a bull market. Investors investing in the fund should look for a capital appreciation over a long term and should avoid short-term investments due to steep exit loads in initial years.

Courtesy: Investment-mantra.in


Photographs: Rediff MoneyWiz

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2. HDFC Equity Fund (G)

HDFC Fund is an old favourite of mutual fund investors for a long period and looks to invest in growth companies. Though recent performance of the fund is not so compelling the fact that this fund is managed by Prashant Jain, an experienced fund manager, should give investors enough confidence to continue their existing SIP investments and fund will surely be back to its excellent performance which it has been exhibited over the years.

HDFC Equity Fund's (G)annualised returns over a 3 and 5-year period stands at 8.2 per cent and 6.8 per cent respectively. But over a longer term, this fund has no doubt not disappointed its investors with consistent good returns.

Fund is definitely one to look out for in a bull run.


Photographs: Rediff MoneyWiz
Tags: HDFC , RICH , SIP

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3. SBI Magnum Emerging Business Fund (G)

SBI Magnum Emerging Business Fund has outperformed its peers handsomely over a 3-year period. An out performance can be attributed to excellent fund management by R Srinivasan. This fund is termed as high-risk, high-return fund taking calls which can prove quite risky. But contrary to this belief, the way the fund managed its downside in a difficult year like 2011 was impressive.

Current fund portfolio consists of excellent picks with strong growth momentum such as Cairn India and some contrarian bets such as Muthoot Finance and Spicejet. This fund has capability to generate excellent returns in coming years if it sticks to its investment strategy.

Investors who can ride off volatility in equity markets should invest in this fund but should keep a close eye on the fund performance and invest systematically through SIP.


Photographs: Rediff MoneyWiz

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4. Reliance Equity Opportunities Fund (G)

Reliance Equity Opportunities Fund (G) is an excellent diversified equity fund and can generate higher returns over the long term. With an annualised returns of 17.9 per cent and 8.9 per cent over a 3-year and 5-year period respectively, fund lately has induced lot of confidence among retail investors to consider the fund to fulfill their long-term goals.

Divi's Labs, Infosys , ICICI Bank are among top three picks but it also takes bet on companies such as Hathway Cable, Shoppers Stop and Cummins which have good upside in the short to medium term -- a perfect blend of stability and aggression.


Photographs: Rediff MoneyWiz

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5. ICICI Prudential Discovery Fund (G)

ICICI Prudential Fund (G) is an excellent bet in the small and mid cap space and believes in value investing strategy -- a strategy which can give excellent returns over a long period -- given investors are patient enough to ride over the volatility in equity markets and don't exit midway. With an annualised returns of 13.9 per cent and 12.4 per cent over a 3-year and 5-year period respectively, this fund can be an excellent diversification in an investor's mutual fund portfolio.

Retail investors should look to invest in this fund for long term through the SIP route.

Summary

Investors should look to diversify their portfolio across different fund categories and invest in line with their risk profile and goals. As an investor, make sure you keep a close track of your mutual fund portfolio and review it every 6 to 8 months. Invest through systematic investment plan (SIP) route to ride successfully through volatile times and have compounding effect working for you in the long term.


Photographs: Rediff MoneyWiz
Tags: ICICI , SIP , RICH

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