Top 2 oldest mutual funds with a 10-year CAGR of 25%

Although previous performance does not guarantee future outcomes, funds with a track record of consistently high returns are always appealing to investors. This article examines the Nippon India Small Cap Fund and the SBI Small Cap Fund, two mutual funds whose start dates are more than ten years apart.
We’ll examine their prior performance to see if they have continuously produced a compound annual growth rate (CAGR) of 25% over the previous ten years. It’s critical to keep in mind that pursuing historical returns might be dangerous.

There are only two funds that have given more than 25% returns in 10 years given below:

Nippon India Small Cap Fund, previously known as Reliance Small Cap Fund, is a flagship offering from Nippon India Mutual Fund. Launched on September 5, 2010, it falls under the Equity: Small Cap category.

As of the latest available data, it has a Total Expense Ratio (TER) of 1.52%. One of the key highlights of this fund is its impressive Compound Annual Growth Rate (CAGR) since inception, standing at 21.09%, significantly surpassing the benchmark’s CAGR of 16.84%. This remarkable performance is reflected in its NAV, which stood at Rs 147.26 as of April 12, 2024.

In terms of portfolio performance, the fund has outshined the broader market represented by the NIFTY 50 TRI, with an impressive outperformance of 54.60% compared to the benchmark’s 26.67% in a year.

When considering risk-adjusted returns, the fund exhibits a Standard Deviation of 14.34, indicating a moderate level of volatility. However, its Sharpe Ratio of 1.88 suggests that it has historically provided attractive returns relative to the level of risk taken. Additionally, the fund’s Alpha of 8.89 reflects its ability to generate excess returns beyond what would be expected based on its level of risk, while its Beta of 0.8 indicates that it is less volatile than the market as a whole.

Furthermore, for investors considering long-term wealth creation through systematic investment planning (SIP), the fund has demonstrated its potential, with a Rs 10,000 SIP growing to an impressive Rs 59,75,247 over the past 10 years.

SBI Small Cap Fund, a part of SBI Mutual Fund, has been a standout performer in the realm of equity investments since its inception on September 5, 2009. Falling under the Equity: Small Cap category.

Its total assets as of March 31, 2024, stand at Rs 25,434.98 crore.

Despite the inherent volatility associated with Small-Cap investments, the Compounded Annual Growth Rate (CAGR) of 20.67% since its inception, significantly outpacing its benchmark, which stands at 12.72%.

The NAV (Net Asset Value) of the fund as of April 12, 2024, was Rs 155.36. Its turnover ratio of 12% indicates a judicious approach to portfolio management. For instance, a Rs 10,000 SIP (Systematic Investment Plan) initiated ten years ago has grown to an impressive Rs 55,76,284, reflecting the wealth-building potential of consistent investment in quality small-cap equities.

Furthermore, the fund’s risk-adjusted performance metrics portray its ability to generate returns relative to the risk taken. With a Standard Deviation of 11.38, indicating the volatility of returns, and a Sharpe Ratio of 1.54, which measures the risk-adjusted return, the fund has exhibited favorable risk-adjusted performance. Additionally, its Alpha of 3.82 and Beta of 0.61 further emphasize its ability to generate excess returns over the benchmark while maintaining a lower risk profile.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.