One-year returns often become the biggest talking point whenever mutual fund rankings are released. But a fund that tops the charts over the past year may not necessarily be the best choice for someone investing through a monthly SIP.
To see whether recent winners have also rewarded long-term investors, we looked at the three best-performing flexi-cap funds over the past year among schemes with assets under management (AUM) of more than Rs 2,000 crore and a track record of at least three years. We then compared how these funds handled this year's market swings and what a Rs 10,000 monthly SIP would have grown to over time.
The past few months have been a good test for equity funds. Markets went through a sharp correction before staging a recovery, making it easier to see which funds bounced back the fastest.
Among the three, Quant Flexi Cap Fund stood out. It not only delivered the highest one-year return but also posted the strongest gains during the recent recovery, rising over 20 percent in the past three months. It is also the only fund among the three that remains comfortably in positive territory for the year so far.
Bank of India Flexi Cap Fund has also recovered well and stayed positive on a year-to-date basis. ICICI Prudential Flexicap Fund, meanwhile, made it to the top three on one-year returns but has slipped slightly into the red so far this year.
But the picture changes over longer periods
Although Quant Flexi Cap Fund is the best performer over one year, it doesn't top the longer-term rankings. Bank of India Flexi Cap Fund has delivered the highest annualised return over the past three years and also leads over five years.
That doesn't mean Quant has underperformed over the long run. The difference between the two is relatively small, but it does show that a fund leading the one-year chart isn't always the long-term leader as well.
A Rs 10,000 monthly SIP over three years would have grown to nearly Rs 5 lakh in both Bank of India Flexi Cap Fund and Quant Flexi Cap Fund, with Bank of India finishing slightly ahead. The gap remains small even over five years, suggesting that while recent returns can differ, both funds have delivered comparable outcomes for disciplined long-term investors.
The broader takeaway is that one-year returns are useful for spotting recent outperformers, but they don't always tell the full story. Looking at how a fund performs across different market phases and over longer periods can give investors a much better idea of what they can expect from a regular SIP.
Discover the latestBusiness News,Sensex, andNiftyupdates. ObtainPersonal Financeinsights, tax queries, and expert opinions onMoneycontrolor download theMoneycontrol Appto stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.