Invest in Best Mutual Funds
Unlock financial growth and diversify risk with the strategic power of mutual funds for a secure and prosperous investment journey.
Best Equity Funds 2024
| Fund Name | 1-Year Return | 3-Year Return | 5-Year Return | Expense Ratio | Fund Size (Cr) |
|---|---|---|---|---|---|
| Axis Bluechip Fund | 25% | 18% | 15% | 0.50% | ₹30,000 |
| Mirae Asset Large Cap Fund | 23% | 17% | 14% | 0.57% | ₹28,000 |
| SBI Small Cap Fund | 35% | 20% | 18% | 0.76% | ₹10,000 |
| HDFC Mid-Cap Opportunities Fund | 30% | 19% | 16% | 1.25% | ₹25,000 |
| Kotak Emerging Equity Fund | 28% | 18% | 15% | 0.78% | ₹12,000 |
Best Debt Funds 2024
| Fund Name | 1-Year Return | 3-Year Return | 5-Year Return | Expense Ratio | Fund Size (Cr) |
|---|---|---|---|---|---|
| SBI Magnum Medium Duration Fund | 8% | 7.5% | 7.2% | 0.75% | ₹5,000 |
| ICICI Prudential All Seasons Bond Fund | 9% | 8% | 7.8% | 0.85% | ₹4,500 |
| HDFC Short Term Debt Fund | 7.5% | 7% | 6.8% | 0.65% | ₹6,000 |
| Axis Banking & PSU Debt Fund | 8.2% | 7.6% | 7.4% | 0.60% | ₹3,500 |
| Aditya Birla Sun Life Corporate Bond Fund | 8.5% | 7.8% | 7.5% | 0.70% | ₹4,000 |
Best Hybrid Funds 2024
| Fund Name | 1-Year Return | 3-Year Return | 5-Year Return | Expense Ratio | Fund Size (Cr) |
|---|---|---|---|---|---|
| HDFC Balanced Advantage Fund | 14% | 12% | 11% | 1.10% | ₹40,000 |
| ICICI Prudential Equity & Debt Fund | 16% | 14% | 13% | 1.25% | ₹35,000 |
| SBI Equity Hybrid Fund | 15% | 13% | 12% | 0.95% | ₹30,000 |
| Axis Equity Hybrid Fund | 13% | 11% | 10% | 0.85% | ₹5,000 |
| Mirae Asset Hybrid Equity Fund | 17% | 15% | 14% | 0.75% | ₹10,000 |
What are Mutual Funds?
Mutual funds are one of the most preferred investment options these days. A mutual fund collects and invests funds from thousands of individuals who have a common investment objective. They are managed by Asset Management Companies that provide various mutual fund schemes to the public. Each mutual fund can invest money in stocks, bonds, Government securities and various other listed and unlisted assets.
Mutual funds are a fantastic investment option for individuals as they can invest in different kinds of asset options without the effort to do the research. The returns generated from mutual funds are distributed proportionately to all the investors. Most AMCs have schemes designed to provide optimum returns to their investors.
Mutual Fund Investment Modes
Mutual fund investments can typically be made through several modes, depending on the convenience and accessibility desired by investors:
- Direct Mode: Investors can directly purchase mutual fund units from the asset management company (AMC) or through their website. This mode typically involves lower expense ratios since there are no distributor commissions involved.
- Regular Mode: In this mode, investors buy mutual fund units through intermediaries such as distributors, brokers, or financial advisors. The distributor earns a commission for their services, which is embedded in the expense ratio of the fund.
- Online Platforms: Many online platforms and apps provide a convenient way to invest in mutual funds. These platforms often offer both direct and regular plans, allowing investors to compare different funds, track their investments, and manage their portfolios digitally.
- Offline Channels: Investors can also invest in mutual funds through physical branches of asset management companies, distributors, or agents.
- Systematic Investment Plan (SIP): This is a mode of investing in mutual funds where investors can regularly invest a fixed amount at predefined intervals (monthly, quarterly, etc.). SIPs are available in both direct and regular plans.
- Systematic Transfer Plan (STP): Investors can transfer a fixed amount from one mutual fund scheme (usually debt funds or liquid funds) to another (usually equity funds) at regular intervals.
- Systematic Withdrawal Plan (SWP): Investors can withdraw a fixed amount from their mutual fund investments at regular intervals. SWPs are useful for generating regular income from investments.
- Dividend Reinvestment Plan (DRIP): Under this plan, instead of receiving dividends in cash, they are reinvested in additional units of the mutual fund scheme.
Each mode offers different features and benefits, catering to the preferences and investment strategies of investors.
Advantages of Mutual Funds
Cost-Effective & Affordability: Economies of scale lead to lower transaction costs, making mutual funds a cost-effective option for Investors
Professional Management & Expertise: Experienced Fund Managers make informed decisions optimizing returns & managing Market associated risks
Liquidity & Accessibility: Easy to buy and sell at Net Asset Value (NAV). It can be liquidated easily compared to other investments in the market
Diversification: Mutual funds spread your investments across various assets, minimizing risk and enhancing portfolio stability
Transparency: Regular reporting and disclosure offer transparency, providing investors with clear insights into their mutual fund holdings
Power of Compounding: Dividends & capital gains can be automatically reinvested, fostering the compounding effect for long term big returns
How to Select the Best Mutual Fund?
Before investing in Mutual Funds, you must have a clear and compelling idea of your financial goals for the future. There are a few other factors that you should keep in mind before choosing a plan.
Financial Goal
You should always invest in any sector with an eye towards the future. Whether you are looking for a short-term profit or long-term benefit like a retirement corpus, you must be clear about your financial goals. Investing without a plan can lead to massive financial mismanagement. If you are a risk-averse individual, it’s better to go for less risky funds but provide decent liquidity.
Performance of the fund
Once you select the best mutual fund category, you should opt for the top-performing mutual fund in that category. Analyzing the returns over some time is the best way to know if that mutual fund would be beneficial to you or not. If the fund has shown better returns over five years, it could be the right choice.
Risk Appetite
Choosing the best mutual fund also depends on your risk appetite. If you have a high-risk appetite, you can choose equity funds that may provide you with higher returns. On the other hand, if you are a conservative investor who is wary of taking risks, it’s better to opt for a debt fund or a large-cap equity fund.
High AUM
The higher the value of total assets in a fund, the chances for the returns are better. A large AUM (Assets under Management) also indicates investors’ trust in that fund and its performance.
What are the types of Mutual Funds?
Equity Mutual Fund
As the name suggests, Equity Mutual Funds invests mainly in equity shares of listed companies. At least 65 per cent of its funds must be invested in equity shares
Types of Equity Mutual funds
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Large Cap Funds
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Mid-Cap Funds
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Small-Cap Funds
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Multi-cap Funds
Top Equity Mutual Funds (5-Year Returns)
| Fund Name | Plan Type | 5-Year Return (p.a.) |
|---|---|---|
| Motilal Oswal Midcap Fund | Direct Growth | 35.27% |
| SBI Contra Fund | Regular Plan | 25.74% |
| Nippon India Growth Fund | Direct Plan | 25.63% |
| Edelweiss Mid Cap Fund | Direct Plan | 25.22% |
Debt Funds
Debt Funds are funds that invest in corporate debt like debentures and fixed income instruments such as government bonds.
Types of Debt Mutual funds
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Money Market Funds
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Corporate Bond Funds
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Overnight Funds
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Liquid Funds
Top Debt Mutual Funds (1-Year Returns)
| Fund Name | 1-Year Return (p.a.) |
|---|---|
| Bandhan Government Securities Fund | 8.56% |
| ICICI Prudential Constant Maturity Gilt Fund | 8.49% |
| ICICI Prudential Short Term Fund | 8.10% |
| HDFC Nifty G-Sec July 2031 Index Fund | 8.06% |
Hybrid Funds
As the name suggests, this is a hybrid of equity and debt mutual funds and is a great way to diversify your investment portfolio
Types of Hybrid Mutual funds
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Aggressive Hybrid
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Multi-asset allocation
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Dynamic Asset-allocation
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Arbitrage Funds
Top Hybrid Mutual Funds (1-Year Returns)
| Fund Name | 1-Year Return (p.a.) |
|---|---|
| Bank of India Mid & Small Cap Equity & Debt Fund | 25.74% |
| ICICI Prudential Equity & Debt Fund | 25.69% |
| HDFC Balanced Advantage Fund | 25.00% |
| ICICI Prudential Multi Asset Fund | 24.25% |
FAQs on Mutual Fund Investment
- What is the Net Asset Value (NAV) of a mutual fund?
NAV is the per-unit market value of a mutual fund’s assets minus its liabilities. It is calculated daily and represents the price at which investors buy or sell fund units.
- Can I redeem mutual fund units anytime?
Yes, most mutual funds allow investors to redeem their units at any time. The redemption amount is based on the current NAV at the time of request.
- What is the difference between large-cap, mid-cap, and small-cap funds?
- Large-cap funds invest in top 100 companies.
- Mid-cap funds invest in companies ranked 101 to 250.
- Small-cap funds invest in companies ranked 251 and above.
These categories differ in terms of risk and return potential.
- How is mutual fund return taxed?
Returns are taxed based on:
- The type of fund (equity or debt)
- The holding period
Short-term and long-term capital gains have different tax implications for equity and debt funds.
- Are investments in mutual funds safe?
Mutual fund investments are subject to market risks. The returns depend on the performance of the underlying assets in the fund’s portfolio.
- What is the commission charged by Fincover on mutual funds?
Fincover charges 0% commission on mutual fund investments. You can choose from over 3000+ direct mutual fund schemes without any hidden fees.
