Mumbai: Certainly, the top-performing mutual funds in 2023 exhibited exceptional returns, with some surpassing a remarkable 40 percent over the year. Investors should carefully analyze fund performance, investment objectives, and risk factors before making investment decisions.
The robust performance of the Indian stock market in 2023, marked by almost a 20% increase in both BSE Sensex and NSE Nifty, significantly influenced the returns of mutual fund investors during this fiscal year.
Investors who ventured into mutual funds in 2023 experienced substantial returns, particularly from the top 5 large-cap firms, each delivering returns exceeding 24%. Mid-cap and small-cap firms also contributed significantly, providing returns of nearly over 40% each.
In 2023, large-cap mutual funds recorded an average annual return of 16.15%, while mid-cap and small-cap firms outperformed with averages of 30.77% and 34.29%, respectively. Notably, many small-cap mutual funds boasted annual returns exceeding 40%, with Mahindra Manulife Small Cap Fund leading the pack, delivering over 53% in annual returns last year, as per data from the Association of Mutual Funds in India (AMFI).
In 2023, large-cap funds, despite providing lower annual percentage returns, maintained the highest total Assets Under Management (AUM) at ₹2,76,639 crore. Here are the top five funds in each category—small cap, mid cap, and large cap—with the highest returns in 2023.
Top 5 large cap mutual funds with highest returns
| Top large cap mutual funds | Annual Returns 2023 |
|---|---|
| Nippon India Large Cap Fund | 28.85% |
| Bank of India Bluechip Fund | 27.05% |
| HDFC Top 100 Fund | 26.61% |
| JM Large Cap Fund | 26.16% |
| Invesco India Large Cap Fund | 24.45% |
Top 5 mid cap mutual funds with highest returns
| Top mid cap mutual funds | Annual Returns 2023 |
|---|---|
| Nippon India Growth Fund | 42.93% |
| JM Midcap Fund | 42.88% |
| Mahindra Manulife Mid Cap Fund | 41.31% |
| HDFC Mid-Cap Opportunities Fund | 41.11% |
| WhiteOak Capital Mid Cap Fund | 38.53% |
Top 5 small cap mutual funds with highest returns
| Top small cap mutual funds | Annual Returns 2023 |
|---|---|
| Mahindra Manulife Small Cap Fund | 53.22% |
| Bandhan Small Cap Fund | 49.48% |
| Franklin India Smaller Companies Fund | 49.44% |
| ITI Small Cap Fund | 48.54% |
| Quant Small Cap Fund | 44.90% |
Mutual funds serve as a preferred investment avenue for long-term investors, offering the flexibility of making lump sum investments or participating in monthly Systematic Investment Plans (SIPs) based on individual financial capacities. Despite inherent risks, mutual funds are often regarded as a relatively less risky option, particularly for long-term investments, enhancing the potential for favorable returns.