Estimating future returns

[ninamdar]

Hello,

If I am planning to invest in equity based mutual funds (mostly in the diversified category) for around 5-7 years, what kind of annual returns can I expect?
I know the returns are not gauranteed but I want something that I can use for estimation purpose.

The category average for equity diversified funds is around 7% for 3yrs and around 20% for 5yrs (from valueresearchonline.com). However, all 4 or 5 star rated mutual funds from valueresearchonline have annual returns much greater than the category average. So I am a bit confused.

Is it a good idea to use category average as standard estimating future returns or is there a better way to do it?

Thanks,
Niranjan

 

[nikrod]

Hello,

If I am planning to invest in equity based mutual funds (mostly in the diversified category) for around 5-7 years, what kind of annual returns can I expect?
I know the returns are not gauranteed but I want something that I can use for estimation purpose.

The category average for equity diversified funds is around 7% for 3yrs and around 20% for 5yrs (from valueresearchonline.com). However, all 4 or 5 star rated mutual funds from valueresearchonline have annual returns much greater than the category average. So I am a bit confused.

Is it a good idea to use category average as standard estimating future returns or is there a better way to do it?

Thanks,
Niranjan

Over the long period, US markets have given returns of 10.5-12%. In India you can safely assume 15% returns over long period fopr coming years.

 

[nsuresh_rasr]

It totally depends on what kind of funds you are going to invest. If you go for a large cap equity diversified fund with a 4 or 5 star ranking (60-70% of your portfolio and a mid cap fund (20-30% of your portfolio) and a dividend yield fund (20-30% of your portfolio) and keep invested for say 5 -7 years without worrying about the market moves, then you should expect around 15+% annuliazed returns. If you can afford to invest more when the market moves down, then expect a return of 20-25% @ the time of maturity.

 

[rajivnc]

It totally depends on what kind of funds you are going to invest. If you go for a large cap equity diversified fund with a 4 or 5 star ranking (60-70% of your portfolio and a mid cap fund (20-30% of your portfolio) and a dividend yield fund (20-30% of your portfolio) and keep invested for say 5 -7 years without worrying about the market moves, then you should expect around 15+% annuliazed returns. If you can afford to invest more when the market moves down, then expect a return of 20-25% @ the time of maturity.

Please recommend few divident yield funds for those in 10% tax bracket and for Long term investment [ > 1 year ]

 

[nikrod]

Please recommend few divident yield funds for those in 10% tax bracket and for Long term investment [ > 1 year ]

For equity funds, Tax bracket does not matter. Some of the good dividend yield funds are UTI Dividend Yield & ING Dividend Yield

 

[rajivnc]

For equity funds, Tax bracket does not matter. Some of the good dividend yield funds are UTI Dividend Yield & ING Dividend Yield

For the UTI Dividend Yield, should i choose the Dividend option OR Growth Option ?

 

[nikrod]

For the UTI Dividend Yield, should i choose the Dividend option OR Growth Option ?

Thats up to you. If you do not need money for near future & stay invested, go for Growth option. If you would like to receive some dividends yearly (not guranteed), go for dividend option.