Contents
- Introduction to mutual fund returns
- Types of Mutual Fund Returns
- Absolute Returns
- Rolling Returns
- Trailing Returns
- Total Return
- Point to Point Return
- Annualised Return
- Mutual Fund Return Calculator
- Mutual fund return taxation
- What percentage of return on mutual is received for the past 10 years?
- Returns for Various Mutual Funds in India
- Moderate Risk Equity Funds
- High-Risk Equity Funds
- Moderate-Risk Tax-Saving Funds
- High-Risk Tax-Saving Funds
- Theme Funds
- Hybrid Equity-Oriented Funds – Moderate Risk
- Hybrid Debt-Oriented Funds
- Hybrid Equity-Oriented Funds – Low Risk
- Debt Funds – Six Months to One Year Holding
- Short Term Debt Funds – Low Risk
- Short Term Debt Funds – Moderate Risk
- Long Term Debt Funds – Moderate Risk
- Long Term Debt Funds – High Risk
- Conclusion
Introduction to mutual fund returns
Mutual fund investment is the best type of investment for you and your future. The good reason to invest in a mutual fund is they offer higher returns and diversification. Having a greater risk will factor will allow you to earn higher mutual fund returns. The mutual fund has become the most wanted choice among investors to reach their financial goal.
Before understanding what is mutual fund return let us understand what is a mutual fund. A mutual fund is the professionally managed investments of investors by the fund houses for the single purpose of investing in securities like stocks, bonds etc. They are supervised by a team of expert fund managers who diversify/designate the fund’s investments and try to generate capital gains or profitable annual returns. These returns depend upon the performance of the fund are determined as Mutual Fund Returns.
Types of Mutual Fund Returns
Absolute Returns
Absolute Returns shows the rise or drop in investment, in the form of a percentage. The absolute returns process of calculating returns is used for mutual funds with the security of less than 1 year. If the time is more than 1 year, the investor has to determine annualized returns.
If the holding is for above a year, we normally see at the compounded annual growth rate (CAGR). This provides you with the year-on-year returns.
The formula is ((F/S)^(1/n))-1. F = Final value, S = Initial value and n = holding period.
Rolling Returns
They relate to a scheme’s annualised returns over a specific period. Rolling returns sessions can be daily, weekly or monthly and shall be used till the end day of the duration in connection with the benchmark of the scheme or fund category.
Compound Annual Growth Rate is used to calculate the returns from mutual funds investment which has a holding period that passes a year. This would decrease the short-term fluctuations and volatility of the NAV of the funds. Under this process of calculating returns from mutual funds, it is expected that the investment is developing at a constant pace
To calculate the Compound Annual Growth Rate (CAGR) manually, the equation is as follows:
CAGR = [(Current Net Asset Value / Beginning Net Asset Value) ^ (1/number of years)]-1
Trailing Returns
It relates to an annualized return over a special trailing period till date i.e 1 year, 3 years, 5 years etc. Historical data is applied for a block of the period. It is a highly appropriate way to estimate the performance of the mutual fund. With this way, you can estimate a good 10 year time period of the fund on an MS Excel sheet by yourself. The method to measure trailing return in a Microsoft Excel sheet is :
Today’s NAV / NAV at the beginning of the trailing period ^ (1/Trailing Period) – 1
Total Return
It relates to the actual returns you have collected from the investment. It involves dividends also the capital gains.
For example, let’s say that you made an investment of Rs.1 lakh in an MF scheme, and the NAV was Rs.20. Since you made purchases worth Rs.1 lakh and the NAV is Rs.20, it means that you purchased 5,000 units. After a year, the NAV of the MF scheme increases to Rs.22, and the value of your units will be Rs.1.1 lakh (5,000 units x Rs.22 per unit), which means your capital gains shall be Rs.10,000. Now, in case the scheme declared dividends of Rs.2 per unit over the year, the overall dividend paid to the investor shall be Rs.10,000 (5,000 units x Rs.2 per unit). Therefore, your overall accrued return shall be Rs.10,000 + Rs.10,000 (dividend + capital gains) = Rs.20,000, which makes your overall return = 20%.
Point to Point Return
As the name implies a point to point return determines the amount that is earned by a mutual fund within 2 successive points of time. All that is discussed in the whole process is the opening date and the expiration date and the returns gained during that period are then analysed. All you need to measure point to point returns is the start date and the closing date of a mutual fund scheme.
Annual Return – As the name suggests, annual return indicates to the return earned from a scheme within the 1st of January and the 31st of December of a singular year.
NAV end – NAV start/ NAV start *100
Annualised Return
Annualised Return is determined the amount of increase in the value of your investment on a yearly basis. Also takes into consideration the impact of the compounding rate of interest.
Annualised Return= (1+ cumulative return ) ^ (365 / days held) -1
Mutual Fund Return Calculator
Mutual fund return taxation
Mutual funds bring tax on long term capital gains, you require not to pay any tax on long term capital gains made till January 31, of every year. But, you will have to pay tax on long term capital gains of above Rs 1 lakh done after this date.
What percentage of return on mutual is received for the past 10 years?
Basically, 15% of returns in mutual funds are received over 10 years.
Returns for Various Mutual Funds in India
Moderate Risk Equity Funds
| FUND SCHEME NAME 9.92% | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Aditya Birla Sun Life Frontline Equity Fund – Regular Plan-Growth | -6.35% | 5.66% | 8.41% |
| SBI Blue Chip Fund – Growth | -4.21% | 5.71% | 9.92% |
| DSP Equity Opportunities Fund – Regular Plan-Growth | -6.25% | 6.65% | 10.71% |
| Invesco India Dynamic Equity Fund – Growth | -2.18% | 8.60% | 7.13% |
| Mirae Asset India Equity Fund – Regular Plan-Growth | -1.69% | 10.45% | 11.92% |
High-Risk Equity Funds
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Sundaram Mid Cap Fund – Growth | -14.91% | 2.08% | 10.25% |
| Franklin India Prima Fund – Growth | -9.12% | 4.40% | 11.42% |
| ICICI Prudential Value Discovery Fund – Growth | -10.07% | 2.79% | 7.08% |
| L&T India Value Fund – Growth | -10.70% | 6.17% | 11.32% |
| HDFC Mid-Cap Opportunities Fund-Growth | -15.07% | 3.69% | 10.49% |
Moderate-Risk Tax-Saving Funds
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Axis Long Term Equity Fund – Growth | -2.22% | 10.21% | 12.42% |
| Franklin India Taxshield Fund – Growth | -7.66% | 4.51% | 9.00% |
| DSP Tax Saver Fund – Regular Plan-Growth | -2.28% | 7.66% | 11.08% |
| UTI Long Term Equity Fund (Tax Saving) – Growth | -8.62% | 5.03% | 7.32% |
| HSBC Tax Saver Equity Fund – Growth | -7.67% | 5.84% | 8.07% |
High-Risk Tax-Saving Funds
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Tata India Tax Savings Fund – Regular Plan-Growth | -2.87% | 8.23% | – |
| Aditya Birla Sun Life Tax Plan – Regular Plan-Growth | -11.94% | 6.45% | 10.52% |
| DSP Tax Saver Fund – Regular Plan-Growth | -2.28% | 7.66% | 11.08% |
| Taurus Taxshield – Growth | -9.17% | 7.91% | 8.66% |
| Kotak Tax Saver Scheme – Growth | -1.26% | 8.21% | 11.14% |
Theme Funds
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| ICICI Prudential US Bluechip Equity Fund – Growth | 4.98% | 12.29% | 10.67% |
| Franklin India Technology Fund – Growth | 2.14% | 10.56% | 8.84% |
| SBI Technology Opportunities Fund – Regular Plan-Growth | 2.55% | 12.52% | 10.33% |
| ICICI Prudential Technology Fund – Growth | -1.44% | 14.22% | 10.41% |
| Aditya Birla Sun Life Digital India Fund – Regular Plan-Growth | -3.87% | 14.08% | 11.30% |
Hybrid Equity-Oriented Funds – Moderate Risk
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| ICICI Prudential Equity & Debt Fund – Growth | -1.50% | 7.36% | 9.74% |
| HDFC Balanced Fund – Growth | -1.82% | 7.40% | 9.94% |
| Aditya Birla Sun Life Equity Hybrid 95 Fund – Regular Plan-Growth | -7.09% | 4.19% | 8.65% |
| Sundaram Equity Hybrid Fund – Growth | -2.38% | 7.70% | 7.76% |
| L&T Hybrid Equity Fund – Growth | -5.44% | 5.99% | 9.37% |
Hybrid Debt-Oriented Funds
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Sundaram Debt Oriented Hybrid Fund | -3.18% | 2.99% | 6.82% |
| BNP Paribas Conservative Hybrid Fund – Growth | 5.51% | 5.96% | 7.53% |
| SBI Debt Hybrid Fund – Growth | 4.54% | 4.79% | 8.07% |
| Indiabulls Savings Income Fund – Growth | 4.14% | 8.34% | – |
| UTI Regular Savings Fund – Growth | -0.74% | 5.28% | 7.76% |
Hybrid Equity-Oriented Funds – Low Risk
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Kotak Equity Savings Fund – Growth | 2.53% | 6.96% | – |
| Tata Equity Savings Fund – Regular Plan-Growth | 3.09% | 4.41% | 6.07% |
| ICICI Prudential Balanced Advantage Fund – Growth | 2.72% | 7.07% | 8.85% |
| HDFC Balanced Advantage Fund – Growth | -1.23% | 8.94% | 8.99% |
| L&T Balanced Advantage Fund – Growth | 1.80% | 5.90% | 7.25% |
Debt Funds – Six Months to One Year Holding
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Tata Treasury Advantage Fund – Regular Plan-Growth | 2.45% | 5.55% | 6.82% |
| Aditya Birla Sun Life Floating Rate Fund – Regular Plan-Growth | 8.92% | 7.79% | 8.43% |
| Reliance Floating Rate Fund – Growth | 8.81% | 6.99% | 7.90% |
| Franklin India Floating Rate Fund – Growth | 7.90% | 7.09% | 7.19% |
| HDFC Floating Rate Debt Fund -Growth | 8.47% | 7.57% | 8.18% |
Short Term Debt Funds – Low Risk
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Aditya Birla Sun Life Short Term Opportunities Fund – Regular Plan-Growth | 9.44% | 7.21% | 8.51% |
| UTI-Banking & PSU Debt Fund – Growth | 0.93% | – | 6.84% |
| HDFC Short Term Debt Fund – Growth | 9.29% | 7.66% | 8.37% |
| DSP Short Term Fund – Regular Plan – GrowthShort Duration | 9.10% | 6.86% | 7.84% |
| Axis Banking & PSU Debt Fund – Growth | 10.91% | – | 8.44% |
Short Term Debt Funds – Moderate Risk
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Reliance Prime Debt Fund – Growth | 7.98% | 7.27% | 8.00% |
| Union Corporate Bond Fund – Growth | 3.79% | – | – |
| Canara Robeco Corporate Bond Fund – Regular Plan-Growth | 9.53% | 6.87% | 7.88% |
| Kotak Corporate Bond Fund – Growth | 9.46% | 8.07% | 9.30% |
| DHFL Pramerica Premier Bond Fund – Growth | 8.00% | 6.04% | 7.06% |
Long Term Debt Funds – Moderate Risk
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| Aditya Birla Sun Life Dynamic Bond Fund – Regular Plan-Growth | 8.45% | 4.96% | 8.26% |
| HDFC Medium Term Debt Fund – Growth | 8.78% | 7.09% | 8.16% |
| UTI-Dynamic Bond Fund – Growth | -1.99% | 3.48% | 6.43% |
| Aditya Birla Sun Life Medium Term Plan – Regular Plan-Growth | 4.03% | 6.09% | 7.97% |
| Indiabulls Dynamic Bond Fund – Regular Plan-Growth | – | – | – |
Long Term Debt Funds – High Risk
| FUND SCHEME NAME | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
|---|---|---|---|
| DSP Credit Risk Fund – Regular Plan-Growth | -3.64% | 3.04% | 5.99% |
| Kotak Medium Term Fund – Regular Plan-Growth | 6.57% | 7.23% | 9.12% |
| UTI Credit Risk Fund – Growth | 2.13% | 5.29% | 7.17% |
| HDFC Medium Term Debt Fund – Growth | 8.78% | 7.09% | 8.16% |
| SBI Credit Risk Fund – Growth | 6.54% | 6.76% | 8.35% |
Conclusion
Mutual funds invest in an extended amount of securities ranging from equities to debts. The performance is normally tracked as the difference in the total market capitalisation of the fund. An added major factor is that the risk involved is decreased across the portfolio of investment. Further, that does suggest investors get great diversification at a very inexpensive price. The investors will get the greatest returns from mutual fund depending on the plan one pick for themselves.
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