Dear Investors,

It’s a known fact that Multi-baggers is a term used mostly in Equity stocks. “A multi-bagger is an investment that has gained several times its original value”. Each “bag” represents your entire original investment. A stock that doubles its price is called two-bagger while if the price grows 5-times, it would be called a 5-bagger and so on. Thus, multi-baggers are those investments whose prices have risen multiple times their initial investment values.

People often relate the term Multi-bagger to the investments in Equity shares itself. However, now a days, the term Multi-bagger can also be associated with other investment avenues also like investing in Mutual Funds.

Around 28 equity mutual fund schemes have multiplied three times the investors’ wealth in the last five years, a study by Mutual Fund showed. In other words, Rs 1 lakh invested in UTI Mid Cap Fund (an average performer in the list of 28 schemes) five years ago, would have grown to Rs 3.44 lakh today.

Apart from these 28 equity mutual fund schemes, five schemes have multiplied four times the investors’ wealth in the same time period. In short, multi-baggers are not restrained to the stock market anymore. Even the modest mutual funds can multiply investors’ wealth multiple times over the medium and long term.

Our research universe consisted of most equity scheme categories, including large-cap, large and mid-cap, mid-cap, multi-cap, small-cap, value funds, focused funds and tax-saving or ELSS schemes. We chose the investment horizon of five years for the study, as most of the mutual fund advisors ask their investors to invest in equity schemes with a minimum investment horizon of five years.

Around 15 out of 20 midcap schemes which have completed five years made it to the list of three-baggers. Eight out of 10 small-cap schemes also found their place in the list. Out of the eight schemes, three schemes – Reliance Small Cap Fund, SBI Small Cap Fund and DSP BR Small Cap Fund – performed exceptionally well. In fact, they grew investors’ wealth four-fold in the five-year time period.

Three large and midcap schemes also made it to the list. From this list, two schemes, Canara Robeco Emerging Equities Fund and Mirae Asset Emerging Bluechip, multiplied wealth fourfold.

Apart from these, three value schemes, and one scheme each in largecap, multicap, focused and tax-saving or ELSS category managed to multiply wealth four times in the last five years.

Here is the complete list:

  Rs 1 lakh would have become 5-yr absolute returns
Large and mid-cap schemes    
Canara Robeco Emerging Equities Fund 425,318 325.32
Mirae Asset Emerging Bluechip 412,670 312.67
Principal Emerging Bluechip Fund 366,235 266.24
Large-cap schemes    
Quant High Yield Eq 314,234 214.23
Mid-cap schemes    
L&T Midcap Fund 378,600 278.6
Kotak Emerging Equity Scheme 370,207 270.21
DSPBR Midcap Fund 354,082 254.08
HDFC Mid-Cap Opportunities Fund 347,225 247.23
Edelweiss Mid Cap Fund 345,582 245.58
ICICI Pru Midcap Fund 344,953 244.95
UTI Mid Cap Fund 343,635 243.64
Invesco India Midcap Fund 337,874 237.87
Sundaram Mid Cap Fund 335,062 235.06
Franklin India Prima Fund 325,856 225.86
Taurus Discovery (Midcap) Fund 319,624 219.63
Axis Midcap Fund 318,863 218.86
Tata Mid Cap Growth Fund 317,887 217.89
Aditya Birla SL Midcap Fund 311,210 211.21
SBI Magnum Midcap Fund 307,638 207.64
Multi-cap schemes    
Invesco India Multicap Fund 324,747 224.75
Small-cap schemes    
Reliance Small Cap Fund 481,204 381.2
SBI Small Cap Fund 454,095 354.09
DSPBR Small Cap Fund 411,886 311.89
HSBC Small Cap Equity Fund 379,008 279.01
Franklin India Smaller Cos Fund 367,542 267.54
Sundaram Small Cap Fund 344,551 244.55
Aitya Birla SL Small Cap Fund 336,245 236.24
Kotak Small Cap Fund 316,263 216.26
Focused schemes    
Reliance Focused Equity Fund 332,507 232.51
Value schemes    
Aditya Birla SL Pure Value Fund 364,093 264.09
Tata Equity P/E Fund 330,019 230.02
L&T India Value Fund 329,860 229.86
ELSS or tax-saving schemes    
Axis Long Term Equity Fund 306,994 206.99

*Kindly note that RichVik is not promoting any of the above schemes, the above table was purely for information purpose.

If you have any of these schemes in your investment portfolio for last five years at least, your returns would have been exceptionally well. While every investor dreams of owning a multi-bagger scheme, you should not choose only multi-baggers of the previous years. Remember that there is no assurance that these schemes may continue to perform in the same way in the coming years. Also, these schemes may not suit you as per your risk profile.

It is always recommended to get a tailored portfolio consisting schemes which are in line with your risk tolerance level and time in hand to accomplish your goals. Please consult an investment advisor before you invest.

We, at RichVik Wealth Advisory Private Limited, understand the client and their needs, availability of funds and their risk taking capacity, and then suggest a financial plan to them.

To know more on investments, feel free to contact us.

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