High CAGR Mutual Funds

High CAGR mutual funds are investment options that consistently deliver strong compounded annual growth rates over time. These funds focus on long-term capital appreciation, offering investors the potential for significant returns by investing in high-growth sectors or assets.

The below table shows a list of the Best High CAGR Mutual Funds based on AUM, NAV, and minimum SIP.

Introduction To High CAGR Mutual Funds

HDFC Mid-Cap Opportunities Fund

HDFC Mid-Cap Opportunities Direct Plan-Growth is a Mid-Cap mutual fund scheme from HDFC Mutual Fund. This fund has existed for 11 years and 11 months, having been launched on 01/01/2013.

HDFC Mid-Cap Opportunities Fund as a Mid Cap Fund, manages assets valued at ₹75,037.43 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 30.05%. This fund has an exit load of 1% and an expense ratio of 74%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 92.1%, No Debt, and Other 7.9%.

Nippon India Small Cap Fund

Nippon India Small Cap Fund Direct-Growth is a Small Cap mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 11 months, having been launched on 01/01/2013.

Nippon India Small Cap Fund as a Small Cap Fund, manages assets valued at ₹61,027.03 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 37.44%. This fund has an exit load of 1% and an expense ratio of 68%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 94.77%, Debt 0.03%, and Other 5.2%.

Quant Small Cap Fund

Quant Small Cap Fund Direct Plan-Growth is a Small Cap mutual fund scheme from Quant Mutual Fund. This fund has been in existence for 11 years and 11 months, having been launched on 01/01/2013.

Quant Small Cap Fund as a Small Cap Fund, manages assets valued at ₹26,330.82 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 48.45%. This fund has an exit load of 1% and an expense ratio of 64%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 89.04%, Debt 0.38%, and Other 10.58%.

Motilal Oswal Midcap Fund

Motilal Oswal Midcap Fund Direct-Growth is a Mid-Cap mutual fund scheme from Motilal Oswal Mutual Fund. This fund has been in existence for 10 years and 10 months, having been launched on 03/02/2014.

Motilal Oswal Midcap Fund as a Mid Cap Fund, manages assets valued at ₹20,055.68 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 34.68%. This fund has an exit load of 1% and an expense ratio of 57%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 99.39%, No Debt, and Other 0.61%.

Bandhan Small Cap Fund

Bandhan Small Cap Fund Direct-Growth is a Small Cap mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 4 years and 10 months, having been launched on 03/02/2020. 

Bandhan Small Cap Fund as a Small Cap Fund, manages assets valued at ₹8,716.22 crore. Over the past 3 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.69%. This fund has an exit load of 1% and an expense ratio of 38%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 92.76%, Debt 0.04%, and Other 7.2%.

Nippon India Power & Infra Fund

Nippon India Power & Infra Fund Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 11 months, having been launched on 01/01/2013.

Nippon India Power & Infra Fund as a Sectoral Fund – Energy & Power, manages assets valued at ₹7,402.07 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.88%. This fund has an exit load of 1% and an expense ratio of 0.95%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 98.31%, No Debt, and Other 1.69%.

Motilal Oswal Large & Midcap Fund

Motilal Oswal Large and Midcap Fund Direct-Growth is a Large & MidCap mutual fund scheme from Motilal Oswal Mutual Fund. This fund has been in existence for 5 years and 2 months, having been launched on 27/09/2019.

Motilal Oswal Large & Midcap Fund as a Large & Mid Cap Fund, manages assets valued at ₹6,840.21 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 28.29%. This fund has an exit load of 1% and an expense ratio of 0.51%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 97.07%, Debt 1.46%, and Other 1.47%.

ICICI Pru Infrastructure Fund

ICICI Prudential Infrastructure Direct-Growth is a Sectoral-Infrastructure mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 11 months, having been launched on 01/01/2013.

ICICI Pru Infrastructure Fund as a Sectoral Fund – Infrastructure, manages assets valued at ₹6,779.16 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.98%. This fund has an exit load of 1% and an expense ratio of 1.23%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 94.58%, Debt 0.95%, and Other 4.47%.

Franklin India Opportunities Fund

Franklin India Opportunities Direct Fund-Growth is a Thematic mutual fund scheme from Franklin Templeton Mutual Fund. This fund has been in existence for 11 years and 11 months, having been launched on 01/01/2013.

Franklin India Opportunities Fund as a Thematic Fund, manages assets valued at ₹5,622.81 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 29.63%. This fund has an exit load of 1% and an expense ratio of 0.49%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 92.41%, No Debt, and Other 7.59%.

Aditya Birla SL PSU Equity Fund

Aditya Birla Sun Life PSU Equity Fund Direct-Growth is a Thematic-PSU mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 4 years and 11 months, having been launched on 09/12/2019.

Aditya Birla SL PSU Equity Fund as a Thematic Fund, manages assets valued at ₹5,456.42 crore. Over the past 3 years, it has achieved a Compound Annual Growth Rate (CAGR) of 37.03%. This fund has an exit load of 1% and an expense ratio of 0.54%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity 97.49%, No Debt, and Other 2.51%.

What Is CAGR in Mutual Funds?

CAGR, or Compound Annual Growth Rate, in mutual funds represents the average annual return an investment has generated over a specified period, assuming profits are reinvested. It reflects consistent growth, offering investors a clearer picture of long-term performance.

By calculating CAGR, investors can evaluate a mutual fund’s performance over time, regardless of market volatility. It provides a smoother representation of returns, helping investors compare different funds and assess their growth potential. A higher CAGR indicates better-compounding growth over the period.

Features Of Highest CAGR Mutual Funds

The main features of the highest CAGR mutual funds include consistent long-term growth, strong historical returns, a diversified portfolio, and the potential for compounding. These funds focus on high-growth sectors and are ideal for investors seeking substantial wealth creation over time.

• Consistent Long-Term Growth: These funds consistently outperform the market over long periods, demonstrating their ability to weather market fluctuations and deliver sustained returns. Investors benefit from steady growth, allowing them to build wealth gradually.
  
• Strong Historical Returns: Highest CAGR mutual funds have a proven track record of delivering high returns over the years. Their past performance is a strong indicator of their future potential, making them attractive to investors seeking reliable growth.
  
• Diversified Portfolio: These funds typically invest in a wide range of sectors and asset classes, reducing risk. Diversification helps protect investors from sector-specific downturns, offering more stable returns in volatile markets.
  
• Potential for Compounding: With a high CAGR, the fund’s returns are reinvested, creating a compounding effect. This growth accelerates over time, helping investors maximize returns, especially for those with a long-term investment horizon.

Best CAGR Mutual Funds Based on 6 Month Return

The table below shows the top High CAGR Mutual Funds to invest in India based on a 6-month return.

List of High CAGR Mutual Funds Based on 3-Year CAGR

The table below shows the best High CAGR Mutual Fund Returns Based on 3-Year CAGR.

Top High CAGR Mutual Funds Based on 1Y Return

The table below shows the best High CAGR Mutual Fund Returns Based on a 1-year return.

Historical Performance of Best High CAGR Mutual Funds

The table below shows the top High CAGR Mutual Funds to invest in India based on a 5-year return.

Factors To Consider When Investing In High CAGR Mutual Funds

The main factors to consider when investing in high CAGR mutual funds include fund performance, risk tolerance, investment horizon, and expense ratios. These factors help investors assess the suitability of a fund for their financial goals and potential returns.

• Fund Performance: Analyze the historical returns of the fund to evaluate its ability to generate consistent growth. A fund with a strong past performance is more likely to continue delivering high returns in the future, but past performance is not a guarantee.
  
• Risk Tolerance: High CAGR mutual funds can be more volatile due to their focus on growth sectors. It’s important to assess your risk tolerance and ensure that the fund aligns with your comfort level for potential fluctuations in value.
  
• Investment Horizon: For high CAGR funds to deliver optimal returns, a longer investment horizon is essential. These funds require time to compound, making them suitable for investors looking to invest for a period of 5-10 years or more.
  
• Expense Ratios: Evaluate the expense ratio of the mutual fund, as higher fees can erode returns over time. Funds with lower expense ratios tend to provide better net returns, especially for long-term investments focused on high CAGR.

How To Invest In High CAGR Mutual Funds?

To invest in high CAGR mutual funds, start by selecting a reliable brokerage platform like Alice Blue. It provides a user-friendly interface and access to a wide range of mutual funds with high growth potential, allowing investors to diversify their portfolios.

Once registered on Alice Blue, browse through the available high CAGR mutual funds based on historical performance, risk, and returns. You can invest through a lump sum or SIP (Systematic Investment Plan). Regularly monitor your investments and make adjustments based on market trends and fund performance.

Impact of Government Policies on High CAGR Mutual Funds

Government policies significantly impact high CAGR mutual funds, especially through regulations, taxation, and economic reforms. Changes in fiscal policies, such as tax incentives for long-term capital gains, can enhance the growth potential of these funds, attracting more investors.

Additionally, government policies related to infrastructure development, industry growth, or interest rates can directly affect the sectors in which high CAGR mutual funds invest. A favorable policy environment can boost economic activity, driving growth in key sectors and enhancing the performance of these funds.

How High CAGR Mutual Funds Perform in Economic Downturns?

High CAGR mutual funds typically experience increased volatility during economic downturns, as they focus on growth sectors that may be more susceptible to market fluctuations. Their value may drop in the short term due to broader economic instability or investor sentiment.

However, these funds have the potential to recover faster as economies stabilize, given their focus on high-growth opportunities. Investors with a long-term horizon may see significant returns once the market rebounds, as these funds benefit from compounding and the eventual resurgence of growth sectors.

Advantages Of High CAGR Mutual Funds

The main advantages of high CAGR mutual funds include the potential for substantial returns, compounding growth, diversification, and long-term wealth creation. These funds are suitable for investors seeking growth, offering a robust way to build wealth over time with a disciplined approach.

• Substantial Returns: High CAGR mutual funds are designed to generate significant returns over the long term, outperforming traditional investment options. By investing in high-growth sectors, they provide opportunities for substantial capital appreciation.
  
• Compounding Growth: With reinvested earnings, high CAGR mutual funds take advantage of the power of compounding. This allows the investment to grow exponentially over time, benefiting long-term investors.
  
• Diversification: These funds typically invest in a range of assets and sectors, helping to reduce risk. Diversification ensures that your investment is spread across multiple growth opportunities, protecting it from the volatility of individual assets.
  
• Long-Term Wealth Creation: High CAGR mutual funds are ideal for long-term investors who are focused on building wealth over time. With a patient investment approach, they can yield impressive results, making them perfect for long-term financial goals.

Risks Of High CAGR Mutual Funds

The main risks of high CAGR mutual funds include market volatility, sector-specific risks, liquidity concerns, and higher expense ratios. These factors can impact returns, especially during periods of economic instability or sector-specific downturns, requiring investors to assess risk before investing.

• Market Volatility: High CAGR mutual funds are sensitive to market fluctuations. During periods of volatility, the fund’s value can experience significant short-term losses, affecting returns. Investors need to be prepared for these ups and downs in the market.
  
• Sector-Specific Risks: These funds often invest in high-growth sectors, which may be prone to specific risks. A downturn in a particular sector, such as technology or healthcare, can negatively impact the overall performance of the mutual fund.
  
• Liquidity Concerns: Some high CAGR mutual funds may focus on emerging markets or niche sectors, which can face liquidity issues. This makes it harder to buy or sell investments quickly, especially in volatile markets or during economic uncertainty.
  
• Higher Expense Ratios: Many high CAGR mutual funds carry higher expense ratios due to active management and specialized investment strategies. These fees can erode returns over time, especially for long-term investors, making it crucial to monitor fund costs.

Mutual Fund GDP Contribution

Mutual funds play a significant role in contributing to a country’s GDP by mobilizing savings from individual investors and directing them into productive sectors of the economy. The investments in industries, infrastructure, and businesses stimulate growth and contribute to overall economic development.

As mutual funds grow, they create employment opportunities, boost innovation, and increase capital inflow into key sectors, further driving economic expansion. By enabling large-scale investments in sectors such as technology, energy, and healthcare, mutual funds support long-term sustainable growth, thereby positively impacting GDP.

Who Should Invest in the High CAGR Mutual Funds?

Investors with a long-term horizon and a higher risk tolerance should consider high CAGR mutual funds. These funds are ideal for individuals seeking substantial capital appreciation over time, as they focus on growth sectors that may be volatile in the short term.

High CAGR mutual funds are best suited for those who can withstand market fluctuations and are not reliant on immediate returns. They are appropriate for individuals with long-term financial goals, such as retirement planning or wealth accumulation, who are willing to stay invested through market cycles.

CAGR Full Form In Mutual Fund – FAQs  

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.