Which Mutual Funds Have High Profitability Ratio?

 

Investing in mutual funds is an appealing choice for individuals aiming to generate wealth over time. Mutual funds, categorized into diverse types based on the kind of securities they invest in, include thematic mutual funds, which focus on specific themes or sectors. Assessing the profitability ratio of mutual funds can provide critical insights into their performance. Here, we delve into some thematic mutual funds in India that have demonstrated high profitability ratios.

**Primary Major Thematic Mutual Funds with High Profitability Ratio**

One of the most prominent thematic mutual funds is the Axis ESG Equity Fund. This fund emphasizes investments in companies with high Environmental, Social, and Governance (ESG) standards. Over the last three years, it has showcased a profit of around 15% annually. Given its stringent selection criteria, the fund’s portfolio typically exhibits robust financial health, contributing to its high profitability ratio.

Another key player in thematic mutual funds is the ICICI Prudential Technology Fund. Concentrating on the technology sector, this fund has capitalized on the booming tech industry. According to recent data, it managed to generate an annual profit of 18% over a five-year period. This high profitability ratio can be attributed to the tech sector's consistent performance and innovation-driven growth.

**Secondary Major Thematic Mutual Funds with High Profitability Ratio**

Thematic mutual funds, like SBI Magnum Global Fund, invest in global and diversified strategic opportunities. With a focus on multinational corporations, this fund reported an annualized return of 14% over a five-year span, leveraging the global scale and financial stability of its investments.

Additionally, the Aditya Birla Sun Life India GenNext Fund targets businesses that cater to the younger generation. Boasting a consistent annual growth rate of around 13%, this fund's profitability ratio reflects its dynamic approach towards emerging markets and new-age companies.

**Example Calculation in Indian Rupees**

For instance, an investment of ₹1,00,000 in the ICICI Prudential Technology Fund three years ago would have grown to approximately ₹1,61,051 today, considering an annualized profit rate of 18% calculated using the formula:

\[ FV = PV \times (1 + r)^n \]

Where:

\[ FV \] = Future Value

\[ PV \] = Present Value (₹1,00,000)

\[ r \] = Annual interest rate (18% or 0.18)

\[ n \] = Number of years (3 years)

\[ FV = 1,00,000 \times (1 + 0.18)^3 ≈ 1,61,051 \]

**Disclaimer**

Investors should note that while these thematic mutual funds have demonstrated high profitability ratios, past performance is not indicative of future results. Mutual funds are subject to market risks, and it is crucial to thoroughly research and understand all possible risks before making any financial commitments. Individual financial goals and risk tolerance should always be considered, and seeking advice from a certified financial advisor is recommended when trading in the Indian financial market.