Although historical returns are not guaranteed, it gives a fair idea of the returns which one can expect from the scheme as the time rolls on. Aside from the past returns, one can consider other factors which include past performance of fund manager (in case of active scheme), reputation of fund house, category of scheme and overall scenario of market.
Focused mutual funds
Here, we give the past returns of focused mutual funds. For the uninitiated, focused mutual funds refer to those schemes which invest in the number of stocks (maximum 30) with at least 65 percent in equity and equity related instruments.
There are a total of 28 schemes with total asset size of ₹1.5 lakh crore, reveals the latest AMFI (Association of Mutual Funds in India) data.
As we can see in the table above, the highest return was given by HDFC Focused 30 Fund which delivered 32.18 percent annualised return in the past five years.
Nippon India Focused Equity Fund gave 27.30 percent return, Quant Focused Fund gave 25.50 percent return and Tata Focused Equity Fund gave 24.58 percent return.
Notably, it is worth recalling that the past returns are not generally enough to judge a scheme’s potential to perform in the future. This is because historical returns may or may not continue in the future. In other words just because a mutual fund scheme has given good returns in the past – it does not mean that it will continue to give the same return in the future as well.
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