Top Low Expense Ratio Equity Mutual Funds in Nov 2024 Based on 5-Year CAGR

For many investors, equity mutual funds represent a powerful way to harness long-term growth in the stock market. When selecting these funds, expense ratios play a key role. A lower expense ratio means lower fees, which leaves more of the fund’s returns in investors’ hands. 

This blog explores some of the top low-expense-ratio equity mutual funds in November 2024 based on their 5-year compounded annual growth rate (CAGR). We’ll also look at important details like minimum investment requirements, exit loads, SIP options, absolute 1-year returns, and their assets under management (AUM).

Top Low Expense Ratio Equity Mutual Funds in Nov 2024 

Note: The equity funds in India provided here are as of October 31, 2024. The Equity mutual funds are sorted based on the 5-yr CAGR. 

Overview of Top Low Expense Ratio Equity Mutual Funds 

1, Motilal Oswal Nifty 500 Index Fund

Motilal Oswal Nifty 500 Index Fund provides investors with diversified exposure to large, mid, and small-cap stocks across the Nifty 500. With a one-year absolute return of 35.74%, it has shown solid growth potential for broad-market exposure. This index fund’s minimum lumpsum investment of ₹500 is accessible, but the SIP minimum of ₹6,000 could deter some investors. This fund is well-suited for broad market participation at a low expense ratio.

2. DSP NIFTY Next 50 Index Fund

DSP NIFTY Next 50 Index Fund is a top choice for investors seeking exposure to large-cap alternatives through the Nifty Next 50 Index. Offering an impressive one-year absolute return of 60.41%, it’s ideal for long-term growth with minimal fees and no exit load. With its low entry points of ₹100 for both SIP and lumpsum investments, this fund is highly accessible, making it suitable for first-time investors and seasoned market participants looking for cost-efficient options.

3. Tata Small Cap Fund

Tata Small Cap Fund appeals to those with a higher risk appetite, as it targets high-growth potential within the small-cap segment. Its one-year absolute return of 50.49% reflects small-cap stocks’ inherent volatility but rewards. While there’s no minimum lumpsum requirement, the SIP starts at ₹1,500, making it accessible for those looking to commit a moderate amount. This fund suits investors aiming for long-term capital appreciation with tolerance for market fluctuations typical of small-cap funds.

4. Motilal Oswal Nifty Midcap 150 Index Fund

Focusing on the mid-cap segment, the Motilal Oswal Nifty Midcap 150 Index Fund is a promising choice for investors who want mid-cap exposure at a lower cost. It generated a one-year return of 44.46%, showing solid mid-cap sector performance. With a minimum lumpsum investment of ₹500 and a ₹1,500 SIP requirement, the fund balances affordability with growth potential. This index fund is ideal for diversifying their portfolio beyond large-cap stocks without high expenses.

5. ICICI Pru Nifty Next 50 Index Fund

ICICI Pru Nifty Next 50 Index Fund is an attractive, low-cost choice for diversifying their holdings within large-cap alternatives. With a one-year return of 60.40%, it delivers robust growth potential. The minimum SIP and lumpsum investment are set at ₹100, adding accessibility for all investor types. With no exit load, this fund offers easy entry and exit for those looking to capture market returns while keeping their expense ratios low.

6. LIC MF Nifty Next 50 Index Fund

LIC MF Nifty Next 50 Index Fund delivers access to Nifty Next 50 companies with a one-year return of 60.07%, aligning with other top funds in this space. Although the minimum lumpsum investment is set higher at ₹5,000, this fund is ideal for investors seeking long-term returns within the large-cap alternative segment. A minimum SIP of ₹1,000 and no exit load make it accessible to mid-range investors focused on steady returns and low management fees.

7. Tata Digital India Fund

Tata Digital India Fund stands out for its focus on the technology sector, an area known for its high growth potential. With a 47.51% one-year absolute return, this sectoral fund benefits from the rising demand for tech innovation. Though it requires a higher initial investment of ₹5,000 for lumpsum, the fund has a modest exit load of 0.25%. Ideal for tech-savvy investors, this fund provides a focused play on India’s rapidly expanding digital ecosystem, suitable for long-term growth.

8. UTI Nifty Next 50 Index Fund

The UTI Nifty Next 50 Index Fund provides low-cost exposure to large-cap alternatives, appealing to investors seeking steady growth. With a 60.40% one-year return, it’s competitive in the low-expense-ratio category. It has a minimum lumpsum investment of ₹1,000 and a minimum SIP requirement of ₹500, making it broadly accessible. The absence of an exit load adds flexibility, appealing to both first-time and seasoned investors who prefer an index-driven approach without high costs.

9. Kotak Emerging Equity Fund

Kotak Emerging Equity Fund targets mid-cap stocks, making it a great choice for investors seeking growth beyond the large-cap sector. With a one-year absolute return of 47.21%, this fund highlights the potential of mid-cap stocks. It’s accessible with a low ₹100 minimum for both lump sum and SIP, appealing to investors who want to capitalise on mid-cap growth while managing risk. The fund is suited to those with a long-term view and moderate risk tolerance.

10. Edelweiss Mid Cap Fund

Edelweiss Mid Cap Fund focuses on mid-cap investments, offering the potential for significant capital appreciation. Its one-year return of 59.97% underscores strong performance in this sector, although mid-caps tend to be more volatile. With a minimum lumpsum and SIP investment of just ₹100, the fund is highly accessible for various investor profiles. This fund is an excellent option for those seeking mid-cap growth with manageable entry costs, suitable for investors comfortable with moderate risk.

Why Choose Low Expense Ratio Mutual Funds?

Expense ratios reflect the annual fees a fund charges to cover its management, operational, and administrative expenses. For investors, these fees are crucial because they directly impact the net returns from their investments. Lower expense ratios mean more of the fund’s returns go directly to the investor, which can make a significant difference, particularly in index and passive funds where cost-efficiency is often prioritised.

A low expense ratio is especially appealing for long-term investors, as the benefits compound over time. Combined with a fund’s high CAGR over five years, low expenses can yield robust returns while allowing investors to retain a larger share of the gains.

Conclusion

Low-expense-ratio equity mutual funds allow investors to capture market returns while minimising costs. These funds can provide the growth needed to meet long-term financial goals. However, it’s essential to consider investment objectives and risk tolerance, especially when venturing into mid-cap and small-cap funds or sectoral options.

Ensure steady returns with systematic withdrawals! Estimate your withdrawals with our SWP Calculator and manage your finances seamlessly.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.