What are the best mutual funds available in India?

Clare Louise Finance

There are more than 2500 mutual fund schemes managed by more than 40 AMCs. Determining best mutual funds from such an extensive list is a difficult task. Asset management companies (AMCs) are responsible for managing these mutual funds in various categories. The AMCs collect funds from the investors and invest these in stocks, bonds, and securities. According to the investment, the funds have been categorized into different types. These include:

  • Debt funds
  • Equity funds
  • Equity-linked saving schemes
  • Diversified funds
  • Gilt funds
  • Index funds
  • Liquid mutual funds
  • Debt-oriented hybrid funds
  • Arbitrage funds
  • Dynamic bond funds

If you are scouting for the best mutual fund schemes in these categories, you have multiple of options. We will confine ourselves to the most sought-after funds that fall into debt funds and equity funds. You can compare mutual funds before finalizing the most suitable one.

Identifying the best mutual fund scheme incorporates certain parameters. These include:

  • Risk appetite of an investor
  • Duration of investment, short-term or long-term
  • Quarterly returns for the past three years
  • Consistency in the past three years
  • Assets under Management (AUM)

Large Cap Funds

Companies which boast of a large market capitalization are known as large-cap companies. The funds that invest money in these companies are known as large-cap funds. Generally, large-cap funds provide a decent and consistent return on investment. The risk varies between moderate to high. Currently, the following large-cap funds are the topmost funds when it comes to performance.

  • Motilal Oswal MOSt Focused 25 Direct-G
  • SBI Blue Chip Fund – Direct (G)
  • ICICI Pru Focused Bluechip Equity Direct-G
  • Mirae Asset India Opportunities Direct-G
  • Kotak Classic Equity – Direct (G)
  • IDFC Focused Equity – Direct (G)
  • Reliance Top 200 – Direct (G)
  • Invesco India Dynamic Equity Fund(G)

Balanced Funds

Balanced funds are meant to ensure safety and moderate profits on investments. Your investment in a balanced fund will be allocated to stocks, bonds, and money market instruments. The risk varies between low and moderate. In the majority of cases, 60% of the corpus is invested in stocks and remaining in bonds and money market instruments. However, the allocation criterion varies according to the discretion of AMCs.

  • ICICI Prudential Balanced Fund
  • DSP BlackRock Balanced Fund
  • Franklin India Balanced Fund
  • SBI Magnum Balanced Fund
  • L&T India Prudence Fund
  • Reliance Regular Savings Fund
  • HDFC Balanced Fund (G)

Multi-Cap Funds

Multi-cap funds deal completely in stocks. Thus, you can expect lucrative returns on your investment. It is recommended to invest for a long-term to avoid any risks and harness maximum benefits. Multi-cap fund is a diversified fund wherein the capital is invested in large-cap, mid-cap, and small-cap companies.

  • Motilal Oswal MOSt Focused Multicap 35 Direct-G
  • SBI Magnum MultiCap Direct-G
  • Aditya Birla SL Advantage Direct-G
  • ICICI Pru Nifty Next 50 Index Direct-G
  • Kotak Select Focus Direct-G

Small & Mid Cap Funds

If the fund manager has an in-depth understanding of the stock markets, you can extract unbelievable returns by investing your money in small & mid-cap funds. The corpus is invested in small and mid-cap companies. The risks are considerably high in this category. Therefore, it is recommended for investors who have a capacity to bear the risks.

  • Reliance Small Cap Fund (G)
  • L&T Emerging Business Fund-DP (G)
  • ABSL Small and Midcap Fund (G)
  • DSP BR Small Cap Fund – Regular (G)
  • IDFC Sterling Equity – Direct (G)
  • L&T Midcap Fund (G)

Equity Linked Saving Schemes (ELSS)

This is the best instrument if you desire to save income tax and gain valuable returns. ELSS invests the majority of your corpus in stocks. An investment up to Rs 1.5 lakh is exempted from income tax under Section 80C. The minimum lock-in period is 3 years.

  • L&T Tax Advantage -Direct (G)
  • Sundaram Diversified Equity(G)
  • Tata India Tax Savings Fund – Direct (G)
  • Franklin (I) Tax Shield -Direct (G)
  • Axis Long Term Equity Fund (G)
  • Aditya Birla SL Tax Plan(G)