10 Best High-Risk & High-Return Mutual Funds for 2024

Risk tolerant Investors who are looking to generate wealth for future often pick high-risk, high-return mutual funds. This fund target mid-cap and small-cap industries which offer great potential for growth but comes with a great return risk.  If you have a higher risk tolerance and a long-term investment horizon, these are the funds that should be in your portfolio

In this blog, we would provide you the 10 best high-risk and high-return mutual funds for 2024, that are designed to improve your wealth neutralizing market volatility

What Are High-Risk & High-Return Mutual Funds?

High-risk mutual funds typically invest on equities, particularly small-cap, mid-cap, or sectoral/thematic funds, which are very volatile in nature. These funds generate big returns but they are susceptible to market downturns. They are best suited for aggressive investors who are comfortable with volatility and decided to stay invested for 5 to 10 years

10 Best High-Risk & High-Return Mutual Funds

Fund Name	NAV (₹)	Fund Size (₹ Cr)	Expense Ratio (%)	3-Year Return (%)	5-Year Return (%)	10-Year Return (%)
Nippon India Small Cap Fund	180.8805	62,259.56	1.42	28.68	37.80	23.49
Edelweiss Mid Cap Fund	101.919	7,755.06	1.74	25.23	31.83	21.00
Nippon India Growth Fund	4,207.5558	35,208.97	1.59	25.37	31.72	19.58
Kotak Small Cap Fund	286.713	18,286.76	1.64	22.76	33.11	19.47
Axis Midcap Fund	115.03	32,015.56	1.56	21.91	28.67	18.64
HDFC Small Cap Fund	141.317	33,962.8	1.57	22.57	30.24	20.00
Invesco India Midcap Fund	170.47	5,903.85	1.82	24.12	29.52	19.51
Mirae Asset Large & Midcap Fund	151.339	40,670.04	1.52	18.43	23.46	16.39
DSP Small Cap Fund – Direct Plan – Growth	221.898	16,704.97	0.80	23.61	33.84	21.38

Factors to Consider Before Investing

1. Risk Tolerance: High-risk funds can see   quick market volatility. People who have high risk tolerance can choose this
2. Investment Horizon: You to need to stay invested over a long time investment horizon to ride out market downturns
3. Diversification: While high-risk funds offer substantial returns, you would need to balance it out with other funds to save you during market drops
4. Expense Ratios: Higher expense ratios can cost your returns over the long term, so it’s important to choose funds with reasonable costs
5. Fund Performance: Past performance can offer insight, though it is not always indicative of future results.

Why Invest in High-Risk & High-Return Mutual Funds?

1. High Returns: These funds have the potential to deliver huge returns compared to other funds
2. Long-Term Growth: If you stay invested over a long term, you can benefit from market upswings and capital appreciation
3. Diversification: High-risk funds lend diversification to a portfolio dominated by safer investments.

How to Select High-Risk, High-Return Mutual Funds

Choosing the right high-risk mutual fund can be a difficult decision due to the volatility associated with these investments. However, there are key criteria that can help investors make informed choices:

• Fund Manager Expertise:

The performance of a high-risk fund is highly dependent on the expertise and track record of its fund manager. Ensure you check the performance of the manager in managing such fans over an extended period of time

• Historical Performance:

Although past performance doesn’t guarantee future returns, it offers valuable information such as how it navigated the volatile period.

• Sector Allocation:

Many high-risk funds invest heavily in sectors like technology, infrastructure, or finance, which are known for their growth potential but also high volatility. Before investing, assess the sectorial allocation to ensure it aligns with your goals

• Asset Under Management (AUM):

Funds with higher AUM probably have better liquidity. A mid-range average AUM is often ideal

• Consistency of Returns:

Go for funds that have demonstrated ability of fetching good returns even during market downturns and shows resilience

Conclusion

High-risk and high-return mutual funds are ideal for investors who are willing to take risk and get rewarded over the longterm. By investing in sectors like small-cap, mid-cap, and sectoral funds, these funds can help you build huge wealth over a long term.