Invest in Best Growth Funds in India 2024
Discover the best Growth Funds to invest in India for 2024. Learn who should invest, key benefits, risks, and find the top performing Growth Funds in the market.
What is Growth Mutual Funds?
A growth mutual fund is a diversified portfolio of stocks with the primary goal of capital appreciation with nil dividends. They invest in the stocks of companies which has above-average growth and they reinvest their revenue earnings in R&D, acquisitions, and expansion/mergers.
Who Should Invest in Growth Mutual Funds?
- Investors with a long investment horizon: These funds typically follow the pattern high-risk high-reward concept. It is ideal for investors who prefer to stay invested for long term for a minimum of 5 years.
- Investors with a higher risk tolerance: Growth funds are more volatile than other equity funds they are more closely related to stock markets
Best Performing Growth Mutual Funds
| Mutual Fund Name | Category | 1-Year Return | 3-Year Return | 5-Year Return |
|---|---|---|---|---|
| Mirae Asset Large Cap Fund | Large Cap | 13.50% | 15.20% | 14.80% |
| Axis Bluechip Fund | Large Cap | 12.80% | 14.00% | 14.20% |
| SBI Small Cap Fund | Small Cap | 20.30% | 18.50% | 17.20% |
| ICICI Prudential Equity & Debt Fund | Hybrid Equity-Debt | 11.00% | 13.00% | 12.50% |
| HDFC Mid-Cap Opportunities Fund | Mid Cap | 14.00% | 16.00% | 15.00% |
| Kotak Emerging Equity Fund | Large & Mid Cap | 13.00% | 15.50% | 14.70% |
| Franklin India Flexi Cap Fund | Flexi Cap | 15.50% | 17.00% | 16.30% |
| UTI Nifty Index Fund | Index Fund | 12.00% | 14.20% | 13.80% |
Factors to Consider While Investing in Growth Mutual Funds
- Fund Manager’s Expertise: Look for funds whose fund manager has a good track record
- Investment Strategy: Understand the sectors under which this payment goes in
- Fund Performance: Analyze the fund’s past performance, considering factors like returns, risk-adjusted returns, and consistency.
- Expense Ratio: The expense ratio represents the fund’s annual operating costs. Choose funds with a good expense ratio to get better returns
Major Benefits of Growth Mutual Funds
- Potential for High Returns: Growth funds have the potential to generate higher returns than long term equity funds
- Long-Term Capital Appreciation: Since they invest in stock of companies with top growth potential, they have good capital appreciation
- Professional Management: Fund managers handle the investment decisions, providing expertise in identifying and investing in growth stocks.
- Tax Efficiency: Long-term capital gains from equity mutual funds are taxed at 12.5% compared to short term gains which have a higher tax of 20%
Risks Involved in Growth Mutual Funds
- Market Volatility: Growth funds are highly sensitive to market fluctuations, making them more volatile than other equity funds.
- Sector Risk: Economic downturns and geopolitical events can rapidly influence the sector which you invested in
Frequently Asked Questions about Growth Mutual Funds (FAQs):
1. How can I invest in growth mutual funds?
You can invest in growth mutual funds through mutual fund distributors, respective mutual fund website, or through Mutual fund aggregator like Fincover
2. Are growth mutual funds suitable for retirement planning?
Growth mutual funds can be suitable for retirement planning since they are long term investment horizon
3. What is the investment objective of growth mutual funds?
The primary objective of growth mutual funds is to provide investors with capital appreciation over a period of time. They capitalize on stock price increase appreciation
4. What are the typical characteristics of growth mutual funds?
Growth mutual funds have higher risk profile compared to other fund categories and they typically invest in sectors like healthcare, education, IT, and Manufacturing