Cost Effective SIP: 5 mutual funds that are economical in investment but strong in returns, are increasing money in SIP at the rate of 25 to 29%

Mutual Funds SIP Return:When investors look for a mutual fund scheme, they have in mind to achieve high returns. Therefore, many investors first look at the past performance of that scheme. At the same time, we also see the possibilities whether this scheme will give good returns in future or not. But they do not look at the expense ratio of that scheme i.e. the cost of investment. If you are also doing this then it may be a mistake. If the expense ratio of a fund is high then the actual returns received in the scheme are affected. In a way, the expense ratio of the fund decides whether investing in that scheme will be cheap or expensive.

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Effect of expense ratio on returns

The mutual fund scheme in which you invest money is managed by a fund manager. The expenses incurred on managing the fund are recovered by the fund house in the form of expense ratio. That means expense ratio is the annual fee charged for managing your fund.

Suppose you have invested Rs 1 lakh in a fund for 1 year. Its expense ratio is 1.50 percent. If you get 10 percent return in a year then it will be Rs 10,000. But 1.5 percent expense ratio will also be deducted from this return. That means your actual return will be 8.5 percent. Whereas if the expense ratio was 0.50 percent, your actual return would be 9.5 percent.

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Edelweiss Mid Cap

Expense ratio: 0.36%
Total Assets: Rs 7755 crore (September 30, 2024)

lump sum return

1 year return: 59.50%
3 year return: 26.34%
5 year return: 31.45%
7 year return: 21.64%
10 year return: 21.29%

SIP returns

This 11 year old fund has given 24.61% annualized returns to those doing SIP. If someone has done a monthly SIP of Rs 10,000 in this fund with an upfront investment of Rs 1 lakh, then the total value of his investment would now have become Rs 67,62,924.

Kotak Small Cap Fund

Expense ratio: 0.48%
Total Assets: Rs 18,287 crore (September 30, 2024)

lump sum return

1 year return: 45.62%
3 year return: 21.12%
5 year return: 32.88%
7 year return: 21.71%
10 year return: 21.31%

SIP returns

This 11 year old fund has given 24.49% annualized returns to those doing SIP. If someone had done a monthly SIP of Rs 10,000 in this fund with an upfront investment of Rs 1 lakh, then the total value of his investment would now have become Rs 67,10,175.

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Nippon India Small Cap Fund – Direct

Expense ratio: 0.66%
Total Assets: Rs 62,260 crore (September 30, 2024)

lump sum return

1 year return: 47.20%
3 year return: 30.89%
5 year return: 36.81%
7 year return: 23.61%
10 year return: 23.94%

SIP returns

This 11 year old fund has given 28.47% annualized returns to those doing SIP. If someone has done a monthly SIP of Rs 10,000 in this fund with an upfront investment of Rs 1 lakh, then the total value of his investment would now have become Rs 87,05,722.

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SBI Small Cap Fund

Expense ratio: 0.66%
Total Assets: Rs 34,217 crore (September 30, 2024)

lump sum return

1 year return: 38.73%
3 year return: 21.60%
5 year return: 28.80%
7 year return: 20.51%
10 year return: 23.73%

SIP returns

This 11 year old fund has given 25.73% annualized returns to those doing SIP. If someone has done a monthly SIP of Rs 10,000 in this fund with an upfront investment of Rs 1 lakh, then the total value of his investment would now have become Rs 72,77,883.

Motilal Oswal Midcap Fund

Expense ratio: 0.58%
Total Assets: Rs 18,604 crore (September 30, 2024)

lump sum return

1 year return: 67.94%
3 year return: 34.96%
5 year return: 32.82%
7 year return: 23.51%
10 year return: 22.18%

SIP returns

This 10 year old fund has given 24.77% annualized returns to those doing SIP. If someone has done a monthly SIP of Rs 10,000 in this fund with an upfront investment of Rs 1 lakh, then the total value of his investment would now have become Rs 53,71,341.

(Source: Value Research, Amfi)