The term “mutual fund” is one most individuals are familiar with. After all, newspapers, magazines and websites galore are all abuzz with news of recent developments in mutual funds.
Mutual funds, as the name suggests, are essentially investment schemes which involves a pool of funds professionally managed by experts. They have shot into popularity like a meteor. In the last decade or so, they have morphed into one of the best methods of investment for amateur investors.
There are a number of reasons for the popularity of mutual funds. One of the main reasons is the fact that these funds are managed by professional fund managers, who optimise the investment process by selecting the most appropriate portfolio.
You know what this means, right?
Once you consult professionals and obtain expert opinions on your investment targets, the entire process becomes about a hundred times easier.
This is the beauty of mutual funds. If you are new to the investment markets and do not have a very clear idea of which avenue would be ideal for you, mutual funds provide the answer to all your prayers.
Investing in mutual funds essentially ensures that your money grows steadily and systematically while minimising the risk associated with rogue investments.
So once you decide to start investing, the only remaining question is which mutual fund?
That, my dear friends, is where I come in.
It can be difficult for amateurs to navigate through the labyrinth that is the market for investment instruments. That is why I have compiled a list of the top mutual funds in India.
Let’s get started then, shall we?
First on the list is the ICICI Prudential Focused Bluechip Equity Fund. The term “bluechip” here is used to refer to the stock of any large and well-reputed company which has been consistently performing well for many years. As the name suggests, therefore, this fund is primarily associated with the equity stocks of bluechip companies.
This mutual fund can boast of an extraordinary performance since its inception in 2016. In fact, when it started, the return on investment was almost double that of its benchmark.
This particular fund is ideal for investors who are looking to create a steady source of wealth with a long-term horizon. As expected with bluechip stocks, there is almost assured returns with a low exposure to risk and volatility.
At second place, we have the Franklin India Equity Fund. This fund is older than some of the other names on my list. Established in 1994, it has shown consistent growth over the last couple of decades. In fact, the fund has declared dividends unwaveringly over the last 20 years.
This fund adheres to a very smart strategy. It only invests in companies which have an innate competitive advantage in its chosen industry. This, the experts at Franklin feel, is the only way of ensuring the company performs well in the future and essentially develops into a steady source of wealth.
As a wise man once said, “Only time will tell.”
Well, guys, time has spoken and it is on Franklin’s side. That is as good an indicator as any.
Third on the list is the ICICI Prudential Value Discovery Fund. The term “value discovery” here, refers to the investment strategy of identifying the companies which have the potential of future value generation and then buying stocks of such companies. This fund is slightly different from the other two in the sense that it has quite a fraction of mid-cap companies in its portfolio.
This mutual fund aims to generate returns by investing in value stocks with the potential of both capital appreciation as well as dividend income. In fact, this fund recently changed its strategy a little bit by reducing its exposure to mid-cap industries so as to balance out the amount of risk the investors have to bear.
Currently, the Value Discovery Fund boasts of high returns in the 3 to 5 year period. It is ideal for investors with the objective of long-term wealth creation.
At fourth place on the list is the DSP BlackRock Equity Opportunities Fund. This, as the name suggests, is a somewhat diversified equity fund investing primarily in large and mid-cap companies.
Since its inception almost 19 years ago, this fund has focused on its main objective of capital appreciation and has outperformed most other equity funds in its league. DSP has been successful in delivering a steady rate of growth and stellar performance because of its highly diversified portfolio.
It is Ideal for investors with a moderate appetite for risk, and a long-term investment horizon.
Fifth on the list is the Aditya Birla Sun Life Frontline Equity Fund. This fund invests only in equities. It aims to capitalise on the long term growth that most large-cap companies boast of.
Since inception in 2002, this mutual fund has gone past its peers and other mutual funds in the same league. As this fund focuses primarily on large-cap companies, the exposure to risk is very low indeed. In a surprising turn of events, however, it goes against the general trend of lower returns and instead offers an above-average rate of return.
That’s the dream, isn’t it?
This is the primary reason why this fund has become so popular among budding investors. So if you are a potential investor with a long-term investment horizon, take this opportunity and jump on this “fund-train”.
Coming in at sixth position on the list is the HDFC Balanced Fund. The term “balanced fund” here, refers to the strategy of investing in both stocks and bonds. Also known as hybrid funds, they maintain a balance between the two primary asset classes to obtain a well-diversified and well-rounded portfolio.
Since its inception in the year 2000, this fund has exceeded expectations and delivered a steady performance, which makes it one of the best in its category.
Balanced funds offer more diversification and lowers the exposure to risk as compared to pure equity funds. Such funds are therefore, ideal for investors who do not have any appetite for risk yet wants to foray into the world of mutual funds.
That brings an end to my list.
Do not worry. This list is far from exhaustive. It is meant to provide an introduction to the top performing and most popular mutual funds in India at the moment.
What you need to do now is, figure out your investment goals, select a mutual fund and simply get started.