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Best Performing Mutual Funds

Mutual Funds are a must have in any investor’s portfolio. The ease of investment, diligently designed asset allocation, professional fund management and, above all a disciplined mode to build a long-term corpus are the elements that add to the appeal of mutual funds. While you can rely completely on the expertise of the fund manager, it is very important that you are aware of certain factors before you invest in the Mutual Funds and also track the performance of the Mutual Fund on a regular basis.

What are the factors before investing in Mutual Funds?

Types of Funds

There are various types of mutual funds in the market such as Equity Funds, Debt Funds, Balanced Funds and Money Market funds. You need to be aware about the objectives of each of these funds and check if your investment objectives are in line with these funds. Equity funds have high return-high risk potential while debt-funds are low on risk with limited returns. On the other hand, there are balanced funds which offer the best of both worlds.

Risk appetite

It is very important that your risk profile is considered before making an investment. Your risk appetite is your willingness to shoulder losses in case the market doesn’t move the way you expected it to. If you are willing to go through the downturn, you can invest your money in equities or high-risk funds. If you are a cautious investor, then you can choose to protect your capital by investing in debt funds.

Expense Ratio

Expense ratio is used to measure the cost of administration and management of the fund. The SEBI has mandated that the expense ratio will be limited at 2.50%. The expense ratio for actively managed fund is higher than that of passively managed fund. Hence, you must also compare the expense ratio of various funds across the similar categories.

Investment duration

The duration of investment is as important as the quality of investment. Funds are exposed to investments in market which are subject to short-term fluctuations. This hampers the return capacity of the funds. If you have chosen to invest in equity-based mutual funds, you need to stay invested in it at least for a period of 7 years, so that the short-term fluctuations are smoothened out

How to evaluate the performance of a Mutual Fund?

You need to evaluate the performance of Mutual Funds by following a holistic process. The various factors that you need to consider while analysing the performance of a Mutual Fund are:

  • Fund Performance: Performance of the fund is of paramount importance while evaluating a Mutual Fund. Ideally, the fund’s performance must be analysed over a longer period say 5-10 years. You need to see whether the fund has managed to beat the benchmark index returns consistently. The fund must also be assessed in comparison to its peers over a longer time horizon.
  • History of the Fund: Before you invest in a fund, ensure that the fund belongs to a reputed Fund House. The Asset Management Company must have a good track record in the past 5-7 years and should have a performance history that has seen the boom and bust phase of a market cycle.
  • Expense Ratio: This is a factor that has the potential to decide the true value of your return. Expense ratio is the annual expense that a fund incurs towards administration and management of the fund. This is expressed as a percentage of the average net asset. This is the charge that you need to pay for investing in mutual funds. If you invest into a Mutual Fund Directly with an asset management company then you can save a lot on the distributor commissions.
  • Risk-return ratios: Certain financial ratios are very helpful in judging the risk-adjusted returns of the mutual funds such as Sharpe’s ratio. This ratio helps us in knowing the return over and above the risk-free instruments. With innumerable number of markets risks it becomes important for an investor to know how much is being earned after adjusting the risk quotient involved.

Top 10 Equity Funds

Equity Funds invest more than 60% of the assets in listed equities. Rest of the funds are invested in debt securities to balance the risk profile and support redemption. These funds are riskier but generate high-return over a long-term.

Name of the fundNAV1 Year3 Years5 Years
ICICI Prudential Equity & Debt Fund126.44-1.80%11.16%16.20%
Motilal Oswal Multicap 35 Fund24.87-5.65%12.72% 
L&T Tax Advantage Fund53.34-4.12%12.55%16.99%
ICICI Prudential Bluechip Fund42.16-0.22%11.57%14.98%
SBI Magnum MultiCap Fund47.67-4.63%11.27%19.18%
Aditya Birla Sun Life Tax Relief 9630.30-2.11%12.19%19.72%
L&T India Value Fund34.47-8.58%10.87%22.67%
SBI Bluechip Fund37.05-2.82%9.42%16.43%
DSP Equity Opportunities Fund207.08-7.96%11.57%17.26%
Mirae Asset Emerging Bluechip Fund49.54-3.30%16.44%28.41%

Top 10 Hybrid Funds

Hybrid or Balanced Funds are schemes which invest money across asset classes. In some cases, the exposure to equities is more than debt securities, while in other cases it is vice-versa. The rationale behind the allocation of assets is to strike an ideal balance between risk and returns.

Name of the fundNAV1 Year3 Years5 Years
Principal Hybrid Equity Fund74.45-1.18%13.42%16.08%
L&T Hybrid Equity Fund 25.42-2.52%8.83%16.11%
SBI Equity Hybrid Fund125.9-0.54%9.36%15.67%
ICICI Prudential Equity and Debt Fund 126.44-1.83%11.16%16.20%
Reliance Equity Hybrid Fund52.88-3.65%9.15%15.84%
Canara Robeco Equity Hybrid Fund 149.612.30%9.25%15.82%
HDFC Balanced Advantage184.74-4.63%9.72%16.04%
Aditya Birla Sun Life Equity Hybrid 95 Fund726.26-4.49%9.09%15.27%
Sundaram Equity Hybrid Fund 85.983.94%11.04%11.08%
Reliance Equity Hybrid Fund52.88-3.65%9.15%15.84%

Top 10 Debt Funds

This mutual fund type is less risky and invests in debt-market instruments like bonds, debentures, government securities and other fixed income securities. Debt funds can be short-term or long-term. The returns will be in the form of interest income and capital appreciation.

Name of the fundNAV1 Year3 Years5 Years
Aditya Birla Sun Life Medium Term Plan 22.564.58%7.59%8.93%
Franklin India Income Opportunities Fund 21.526.74%8.08%9.04%
Axis Strategic Bond Fund17.555.66%8.28%9.33%
SBI Magnum Medium Duration Fund31.204.93%8.78%10.03%
Baroda Short Term Bond19.236.36%7.89%8.42%
ICICI Prudential Advisor Series-Debt Management Fund28.395.41%7.75%9.28%
JM Liquid Fund49.707.33%7.29%7.91%
Franklin India Dynamic Accrual Fund64.006.61%8.51%9.73%
Axis Banking & PSU Debt Fund1674.796.78%7.50%8.11%
Principal Credit Risk Fund2819.95.98%7.39%8.19%

Top 10 GILT Funds

Gilt fund invests money primarily in Government securities over long-term. Government debt is normally devoid of credit-risk. So, if you do not want to any worries about risk, Gilt funds are for you.

Name of the fundNAV1 Year3 Years5 Years
SBI Magnum Constant Maturity Fund39.147.64%9.20%9.79%
IDFC Government Securities Fund Investment Plan21.244.20%7.47%8.86%
SBI Magnum Gilt Fund39.302.49%7.80%10.05%
ICICI Prudential Gilt Fund - Investment Plan61.524.33%8.20%9.62%
Aditya Birla Sun Life Government Securities Fund50.203.33%8.42%10.15%
ICICI Prudential Gilt Fund61.524.33%8.20%9.62%
Reliance Gilt Securities Fund23.824.73%8.61%10.06%
L&T Gilt Fund44.303.35%7.04%9.00%
Canara Robeco Gilt Fund 49.302.80%8.05%9.38%
Kotak Gilt Investment 60.323.80%7.24%8.72%

Top 10 Tax Savings Fund

Equity Linked Savings Schemes or Tax Savings funds have a lock-in of 3 years and the investments are eligible for exemption under section 80C. The risk element for these funds is higher, but they also generate higher returns.

Name of the fundNAV1 Year3 Years5 Years
Aditya Birla Sun Life Tax Relief 96 155.35-1.01%12.32%19.88%
Axis Long Term Equity Fund 42.555.82%12.21%20.52%
L&T Tax Advantage Fund 53.42-3.46%12.44%17.01%
Motilal Oswal Long Term Equity Fund 16.54-4.54%14.19%-
HDFC Long Term Advantage Fund 184.17-4.16%9.47%15.97%
Invesco India Tax Plan49.152.46%11.80%19.08%
DSP BR Tax saver fund44.67-4.78%11.36%18.05%
Franklin India Tax Shield539.91-1.31%8.59%16.79%
TATA Tax saving fund63.39-5.98%11.23%18.62%
IDFC Tax advantage ELSS53.70-6.31%11.86%17.30%

Top 5 Index Funds

The allocation of assets for these funds replicate a particular index listed on the stock exchange, let’s say the Sensex or Nifty.

Name of the fundNAV1 Year3 Years5 Years
ICICI Prudential Nifty Index Fund Growth104.76.5%11.3%12.4%
UTI Nifty Next 50 Index Fund9.8   
Franklin India Index Fund Nifty Plan86.026.3%11.0%12.0%
SBI Nifty Index Fund93.147.0%11.6%12.1%
IDBI Nifty Index Fund20.035.9%10.3%11.3%

Top 10 Money market funds

Money market assets such as Certificate of Deposit (CD), Commercial Paper (CP), Call Money and T-Bills, are highly liquid and risk-free. This scheme allocates funds to these instruments. Money Market Funds are best suited to those who want to invest safely over short-term.

Name of the fundNAV1 Year3 Years5 Years
UTI Money Market Fund2041.17.58%7.33%7.91%
ICICI Prudential Money Market Fund251.767.46%7.29%7.88%
Kotak Money Market Scheme2989.47.45%7.31%7.91%
L&T Money Market Fund17.9767.00%7.91%8.18%
Reliance Money Market Fund2743.597.64%7.30%7.88%
Invesco India Money Market Fund2083.27.42%7.31%8.05%
HDFC Money Market Fund.3777.87.21%7.07%7.74%

P.S: The above lists are indicative and the order of the funds is not necessarily the order of the ranking.

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