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 ET.com 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.