10 Mutual Fund Types That Could Double Your Wealth in 5 Years

The Mutual Fund Boom Continues

The mutual fund industry has been on a remarkable journey in recent years, characterized by consistent inflows, impressive returns, and a growing preference among retail investors. The allure of doubling wealth in just five years has driven this surge, with various equity fund categories offering the potential to achieve this ambitious goal.

The Power of Equity Funds

Equity mutual funds, which invest primarily in stocks, have been the driving force behind these exceptional returns. With the exception of International Equity schemes, most equity fund categories have delivered average returns exceeding 15% per annum over the past five years. This impressive performance has made them a popular choice for investors seeking substantial growth.

Top Contenders for Doubling Your Wealth

While the potential for doubling your wealth in five years exists across multiple equity fund categories, certain schemes stand out based on their recent performance and investment strategies:

Multi-Cap Funds: These funds invest across market cap sizes (large, mid, and small-cap), offering a diversified approach. With an average return of over 25% CAGR in the last five years, they’ve been particularly promising.
Flexi-Cap Funds: Enjoying flexibility in their investment mandate, these funds can allocate assets across market caps based on the fund manager’s assessment of market conditions. Their average return of around 21% in the past five years makes them a compelling option.
Multi-Asset Allocation Funds: A blend of equity and debt, these funds offer a balance of growth and stability. Their average return of 19.2% CAGR demonstrates their potential for significant gains.
Contra Funds: These funds take a contrarian approach, investing against prevailing market trends. Their average annual return of 27% over the past five years highlights their ability to capitalize on undervalued opportunities.
MNC Funds: Focusing on multinational companies, these funds benefit from the global reach and stability of these corporations. Their average annual return of 19% makes them a solid choice.
Nifty Index Funds: Tracking the Nifty 50 index, these funds offer a low-cost way to invest in India’s leading companies. Their average annual return of 18% over the past five years makes them a conservative option for those seeking to double their wealth.
Sectoral Funds: While the performance of sectoral funds can be volatile, certain sectors, such as banking and financial services, have shown potential for growth. Careful analysis of sector-specific trends is essential when considering these funds.
Technology Mutual Funds: Although they’ve faced challenges in recent times, the long-term prospects of the technology sector remain promising. A recovery in this sector could lead to significant returns for investors.
Large-Cap Funds: Despite the current market heat, well-managed large-cap funds can still offer substantial returns. Their average return of over 19% in the past five years makes them a viable option for moderately aggressive investors.
ELSS Funds: While primarily known for their tax benefits, ELSS funds can also deliver competitive returns. Their average return of 22% in the past five years, along with the lock-in period, can contribute to wealth growth.