Since the negative-real rate of returns on fixed deposits and other bank investments continue to be a major concern across India, investors are increasingly in search of avenues that can fetch them higher returns commensurate to their risk appetite. Mutual funds plans offer a potentially lucrative option for the same and have therefore become quite the buzzword among market participants lately.
Equity mutual funds: The top mutual funds to invest in India
Among the several asset classes that mutual funds may invest in such as stocks, debts, real estate, gold, foreign equities, etc. Mutual funds that predominantly invest in stocks listed on stock also called as ‘equity funds’ are the top mutual funds in India.
Equity funds are subject to market risk and therefore carry a higher risk compared to bank FDs. However, they also offer higher return potential and have several benefits over other investment options.
Equity-based mutual fund plans are increasingly being seen as an attractive investment option, especially for younger and risk-friendly investors since it provides them with the opportunity to generate returns above the rate of inflation and therefore make an attractive proposition for wealth creation.
Moreover, these mutual funds are highly liquid, but can be held for any length of time and hence offer a lot of flexibility when it comes to timing the purchase and selling of units. They also provide professional investment management and greater diversification as compared to direct investments in the markets.
In India, the mutual fund industry is highly regulated and as such, investors don’t need to worry about the security of their funds. The Securities Exchange Board of India (SEBI) has enacted strict regulations and guidelines to ensure that investors get a fair and uniform deal in the form of good returns and security.
With the introduction of Systematic Investment Plans (SIPs), mutual fund plans have become an even more attractive investment option since they allow investors to invest a fixed amount of money in the fund over a period of time and enjoy the benefits of compounding returns.
From a risk/ return standpoint, some of the top mutual funds to invest in India are:
Large cap equity funds
These funds primarily invest in large, well-established companies that generate steady income and dividends and which are fairly insulated from changes in the economy. Moreover, these funds are less likely to experience huge fluctuations in their value and hence make for a safe investment option.
Below are few recommendations on top mutual funds to invest in India from the large cap category:
| Scheme Name | AUM | TER | 1 Year Return% | 3 Years Return% | 5 Years Return% | Inc. Return% |
| HDFC Top 100 Fund (G) | 19,910.47 | 1.82% | 9.82% | 12.10% | 9.33% | 20.93% |
| Aditya Birla SL Frontline Equity Fund (G) | 19,782.18 | 1.77% | 4.99% | 14.13% | 9.13% | 19.05% |
| Kotak Bluechip Fund (G) | 4,217.00 | 2.00% | 3.04% | 16.11% | 10.85% | 18.90% |
Midcap equity funds
These funds offer investors access to firms in their early stages of growth and which have high potential for value creation. They are subject to moderate risk and offer good returns in the long run.
Below are few recommendations on top mutual funds to invest in India from the mid cap category:
| Scheme Name | AUM | TER | 1 Year Return% | 3 Years Return% | 5 Years Return% | Inc. Return% |
| Nippon India Growth Fund – (G) | 11,267.89 | 1.89% | 6.56% | 23.25% | 13.30% | 25.06% |
| Aditya Birla SL Frontline Equity Fund (G) | 6,444.48 | 1.87% | 4.99% | 32.54% | 7.43% | 23.57% |
| Kotak Bluechip Fund (G) | 3,160.30 | 2.11% | 5.90% | 36.04% | 8.17% | 21.07% |
ELSS funds
ELSS funds offer tax benefits while also allowing investors to enjoy potentially great returns on their investment. They invest in a diversified portfolio of stocks and are subject to only moderate to low risk.
Below are few recommendations on top mutual funds to invest in India from the ELSS category:
| Scheme Name | AUM | TER | 1 Year Return% | 3 Years Return% | 5 Years Return% | Inc. Return% |
| ICICI Pru Long Term Equity Fund – (G) | 9,072.14 | 1.93% | 5.86% | 15.39% | 11.50% | 21.01% |
| HDFC Tax Saver Fund (G) | 8,715.76 | 1.88% | 12.10% | 13.95% | 7.84% | 20.20% |
| Franklin India Taxshield – (G) | 4,312.12 | 1.94% | 5.66% | 14.51% | 9.33% | 19.27% |
Balanced funds
These funds invest both in equity and debt funds, hence providing a balance between risk and returns. They are quite low-risk and offer good returns over a long period.
Below are few recommendations on top mutual funds to invest in India from the Balanced fund category:
| Scheme Name | AUM | TER | 1 Year Return% | 3 Years Return% | 5 Years Return% | Inc. Return% |
| HDFC Balanced Advantage Fund (G) | 43,078.53 | 1.72% | 12.56% | 14.35% | 9.95% | 19.76% |
| Nippon India Balanced Advantage Fund (G) | 6,076.41 | 1.93% | 2.74% | 10.26% | 7.67% | 15.08% |
| Aditya Birla SL Balanced Advantage Fund (G) | 6,671.99 | 1.85% | 1.54% | 10.94% | 7.75% | 12.60% |
Conclusion
Finally, investors should remain vigilant and stay up to date with market developments while investing in mutual funds. They should conduct thorough research into the funds and consult a AMFI approved mutual fund advisor for finding the top mutual fund to invest in India based on their risk profile and return expectation.
