Franklin Prima Plus is close to completing 25 years of existence and has delivered an annualized return of 18.78% over that time period. One lakh rupees (lump sum) invested in the fund at inception would now be worth Rs 52 lakh. However Prima Plus isn’t India’s oldest mutual fund. That honour goes to UTI Mastershare which was launched in 1986, even before liberalization. This fund has delivered an equally powerful 18.07% since its inception. A Rs 1 lakh invested in the fund at inception would now be worth Rs 1.72 crore.
The table below gives you the performance of India’s oldest funds. All of the funds listed in it were launched in the 1990s and have delivered average annualised returns (barring one) of 18-20%. The performance figures illustrate the sheer power of staying invested with mutual funds over the long term.
|Fund||Category||Inception Date||Age||Return since inception|
|UTI Mastershare||Equity – Large Cap||18th October 1986||31||18.07%|
|HDFC Prudence||Hybrid – Equity Oriented||1st Feb 1994||24||18.93%|
|Franklin Prima Plus||Equity – Multicap||29th Sept 1994||23||18.78%|
|HDFC Equity||Equity – Large Cap||1st Jan 1995||23||19.32%|
|Aditya Birla Sun Life Balanced 95 Fund||Hybrid – Equity Oriented||10th Feb 1995||23||20.73%|
|HDFC Top 200||Equity – Large Cap||3rd Sept 1996||21||20.26%|
|DSPBR Equity||Equity – Multicap||29th April 1997||20||20.39%|
|Tata Pure Equity (now Tata Large Cap Fund)||Equity – Large Cap||7th May 1997||20||21.06%|
|DSPBR Equity and Bond||Hybrid – Equity Oriented||27th May 1999||18||15.30%|
|ICICI Pru Long-Term Equity||Equity – Tax Saving||19th August 1999||18||21.09%|
Source: Value Research, Data observed on 10th April 2018
It is interesting to note that the difference between different equity categories – large cap and multi-cap have been marginal over such long periods. This is also true to some extent of balanced (hybrid equity oriented) funds and pure equity funds. In other words, time in the market can smoothen out the differences in equity category performance, in the long run.
However before drawing any inferences, please note a few points:
- These are largely equity funds. Debt funds do not give these types of returns, even over the long term.
- The last twenty years may have been exceptional for India’s economy and markets. There is no guarantee that this kind of performance will repeat itself over the next 20 years. In the case of some funds, the maximum performance has happened prior to last 10 years.
- HDFC Prudence has done 18.93% since inception while 14.44% in the last 10 years. UTI Mastershare has done 10.72% in the last 10 years versus 18.07% for the lifetime. The return on ICIC Prudential Long Term Equity Fund over the last 10 years is also significantly lower at 14.14% compared to returns since inception.