Best Mutual Funds in India

With the wide range of mutual fund schemes available in the national market today, it has become increasingly difficult to ascertain which of them is the best to invest in. If you have been inquiring about the best mutual funds in India from your colleagues or friends or searching online about the same, then this article could be just what you are looking for.

New mutual fund investors are generally intrigued by this query when they first embark on their journey. However, is it simple enough to get this list? If yes, then can one get rich easily with its help? Unfortunately, the process itself is much more complicated than most people imagine.

By carrying out a simple online search, one can come across several websites with their own lists of recommended mutual fund schemes. These selections generally tend to be made on basis of their performance in the short term. This occasionally leads to trendy schemes of the time dominating the list. Unfortunately, the rationale behind such a selection process is inherently flawed.

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For example, not all the suggestions your colleagues or friends give you are going to be good for your needs. They might have good schemes in themselves, but they may not be suitable for your risk profile and objectives. For some other people, going through the list of top funds has become a hobby of sorts. As such, they never move beyond collecting names of schemes because of an inherent doubt in their genuineness. You will often find such people lurking on online mutual fund websites for years.

Given below are our choices for the ten best mutual funds in India. To serve most mutual fund investors aptly, this list comprises schemes from all five different categories – small-cap, mid-cap, large-cap, multi-cap, and aggressive hybrid schemes. We recommend going through the entire length of this article properly in order to identify the scheme best suited for you.

Top Ten Mutual Fund Schemes in India

  1. Axis Bluechip Fund
  2. Axis Midcap Fund
  3. Axis Small Cap Fund
  4. DSP Midcap Fund
  5. Kotak Standard Multicap Fund
  6. Mirae Asset Hybrid Equity Fund
  7. Mirae Asset Large Cap Fund
  8. Parag Parikh Long Term Equity Fund
  9. SBI Equity Hybrid Fund
  10. SBI Small Cap Fund

Before You Invest in Mutual Funds

It is important to bear certain facts in mind before investing in any of these schemes. First of all, you need to research every category properly and ascertain whether it is up to your investment goals and risk profile or not. For example, aggressive hybrid schemes and other equity-oriented hybrid or overall balanced schemes are recommended for people who are relatively unfamiliar with equity mutual funds.

Basically, such schemes invest in a combination of equity (65-80%) and debt (20-35%), resulting in a hybrid portfolio. As a result, they are generally regarded as comparatively less volatile options than pure equity schemes which invest the whole corpus solely in stocks. If you are a highly conservative equity investor aiming for a secure inflow of cash sans a lot of volatility, then you should consider going for aggressive hybrid schemes.

At this point, it is important to mention that the ICICI Prudential Equity Debt Fund, in spite of being in the last quartile in December, has shown a consistently abysmal performance in the recent past. As a result, we have currently chosen not to include it in the above list of the best mutual funds in India.

If you are among the equity investors who seek a higher level of security before investing in stocks, you could consider large-cap schemes. These are schemes that specifically invest in the top hundred stocks in the market, and are thus considered much safer than their contemporary pure equity mutual fund schemes. Compared to small-cap and mid-cap schemes, they are also much less volatile. As a result, they can help you gain decent returns with an appreciable level of stability.

If you are a regular equity investor willing to take a certain amount of risk to invest in the stock market, then diversified equity schemes or multi-cap mutual funds could be just what you are seeking. Depending on the opinion of the fund manager, such schemes generally invest across market sectors and capitalizations. By investing in these schemes, you can potentially gain from upward trends in any of the categories of stocks or sectors.

Now, let us take a look at the most daring category of investors out there – those who are willing to take great risks to gain the maximum possible returns. If you are such a daredevil as well, you can go for small-cap and mid-cap schemes. As their name suggests, small-cap schemes generally invest in smaller companies whereas mid-cap schemes invest in medium-sized companies, in terms of market capitalization. Needless to say, these schemes are potentially highly volatile. However, they could also help you gain much higher returns over a long period of time. For daring investors willing to invest in the long term, they are excellent choices.

Mutual Fund SIP Portfolios

Are you seeking mutual fund SIP portfolios to get started with investing and earning handsomely over time? There are a number of such helpful portfolios for three categories of risk profiles – aggressive, moderate, and conservative. You will also come across three separate baskets of SIP investments. That is a different topic beyond the scope of this article and needs to be discussed separately altogether.

Conclusion

It is important to remember that the field of mutual funds and investments is wide, intimidating, and ever-changing. If you ever feel lost or overwhelmed, you need not panic. Remember that you can always ask for help from an experienced mutual fund advisor if you feel lost. It is better to understand what you are dealing with and think wisely before making a decision. It might be time-consuming, but at least it could save you from making a potentially disastrous move.

Remember that simply carrying out an online search with the word “best” will not be of much help to you. After all, the definition of “best” can vary greatly from person to person. You need to select a scheme that matches your risk profile, investment goals, and horizons.

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