Yes one would like to earn maximum possible returns. However investing in only one type of fund class may not get you there.
If you wish to become very muscular, would eating only protein help you? You would also need to eat carbohydrates and some good fats.
Similarly in investing, you will need to diversify between some small cap equity, mid cap, large cap. You would also need some debt funds so that you can rebalance your portfolio with market movements. This will in the long run get you much higher returns.
A study of a period of extremes done in the US , the 15 years between 1926 and 1940, which covers the 1929 crash and the Great Depression shows that a $1 investment in stocks in January 1926 was worth $1.81 by December 1940. A dollar invested in bonds in 1926 was worth $2.08 by 1940.
However a portfolio of 60% stocks and 40% bonds rebalanced every quarter, would be worth $2.46, beating the other two combinations.
So, think portfolio, not sector and definitely not a single stock.
And always invest in Direct Plan Mutual Funds as per your risk profile. This alone could generate 40% more return for you by cutting out commissions.
