7 Equity Funds With Consistent Over 13% Returns Across All 7-Year Cycles

The chase for the “best mutual fund to invest in” never seems to end. In fact, the most searched mutual-fund-related term on Google is "Best Mutual Fund to Invest."  But what really defines a fund as the “best”?

For long-term equity investors, the best funds are the ones that perform consistently well across market cycles — not the ones that top the charts one year and then fall into the last quartile the next, as the market changes. At Outlook Money, we analyzed the numbers to identify equity funds that have consistently delivered returns exceeding 13% in every possible seven-year period since their launch.

How We Identified the 7-Year Consistent Performers?

We considered only diversified equity fund categories, namely–large cap, mid cap, small cap, large & mid Cap, multi Cap, and flexi cap funds.

This gave us a list of 208 equity mutual funds.

Next, for each fund, we calculated its 7-year rolling returns, rolled on a daily basis, from the day it was launched.

Rolling return is like taking a daily SIP of returns, measuring every possible period, not just point-to-point returns. Now, as rolling returns are based on thousands of data points, they reveal how consistently a fund has performed over time, not just during lucky phases.

(For a detailed explainer, read: Why Rolling Returns Matter: A Better Way to Pick Mutual Funds)

We used the Ace Mutual Fund database for the numbers. Once we received the returns, we shortlisted funds whose 7-year returns never fell below 13 percent in any of the possible 7-year periods since inception.

This gave us a list of 14 schemes.

Some of these shortlisted funds were only seven to eight years old. This completely defeated the point of using rolling returns.

A fund that has been around for 7–8 years will have almost no real rolling periods to analyse. Such funds basically had just one or two data points. That doesn’t show consistency.

To get meaningful results, out of the 14 funds, we kept only those with at least 10 years of history.

This gave us our final list of seven funds that have never delivered returns lower than 13 per cent in any of the possible seven-year periods since their launch. The funds have been listed in descending order of the investors’ money they manage.

• Parag Parikh Flexi Cap Fund

• Nippon India Small Cap Fund

• Mirae Asset Large & Midcap Fund

• SBI Small Cap Fund

• Axis Small Cap Fund

• HSBC Small Cap Fund

• PGIM India Midcap Fund

The detailed rolling return analysis is shown in the table given below. For example, Mirae Asset Large & Midcap Fund — launched almost 15 years ago- has had 2,064 seven-year periods since its inception.

The average of returns for all the 2064 , 7-year periods is called the Average Rolling Return, which stood at 20.67 per cent. The minimum 7-year return was 13.94 per cent, and the maximum return was 27.24 per cent.

Similarly, you can read the details of other funds in the given table.

Should Investors Buy These Funds?

The biggest limitation of this study is that it is entirely based on past performance. Markets may not behave the same way going forward, and there is no guarantee these funds will deliver similar performance.

So, treat this study for educational and informational purposes. Refrain from investing only on the basis of this study. Either research well, understand your goals, your risk appetite, and time in hand to invest accordingly, or take the help of a financial advisor to make appropriate investments.