Mutual funds have given exceptional performance over the period. Some investors just look for the returns irrespective of the risk and other parameters.
So, here we have shortlisted the top-performing best SIP mutual funds with returns as a filter.
What is a SIP?
SIP or the Systematic Investment Plan refers to the investment tool associated with various mutual funds. SIP allows investors to invest money periodically for a long period.
Ignite Prosperity: Unleash the Power of SIP Mutual Funds
| S.No. | Fund Name | 3-Yr Annualized Performance |
| 1 | Quant Small Cap Fund Growth Option Direct Plan | 44.30 % |
| 2 | PGIM India Mid-cap Opportunities Fund Direct Plan-Growth | 39.28 % |
| 3 | Canara Robeco Small Cap Fund Direct-Growth | 38.83 % |
| 4 | Bank of India Small Cap Fund Direct-Growth | 38.82 % |
| 5 | Quant Tax Plan Direct Option Growth Plan | 36.88 % |
| 6 | Quant Infrastructure Fund Growth Option Direct Plan | 36.47 % |
| 7 | Quant Mid Cap Fund-Growth Option Direct Plan | 35.89 % |
| 8 | Kotak Small Cap Fund Direct-Growth | 35.37 % |
| 9 | Quant Active Fund Growth Option Direct Plan | 33.28 % |
| 10 | Quant Flexi Cap Fund Direct Plan Growth Option | 32.25 % |
Source: Morningstar
1. Quant small cap fund direct plan-growth
Fund analysis:
The fund has delivered an exceptionally good performance. The fund is investing predominantly in small-cap companies. The fund is rated 5-star by Morningstar.
The risk grade is high, and the returns grade is high. The fund follows a blended style of investing. The risk is spread across companies with the top 10 holdings consisting of 38.96%. The fund has a high risk (measured by standard deviation) than the category average.
| Pros | Cons |
| A top performer in its category. Fund captured the market well when it was rising. | Volatility is very high. |
2. PGIM India mid-cap opportunities fund direct plan-growth
Fund analysis:
The fund has outperformed the category and the benchmark with good margins. The fund is investing predominantly in mid-cap companies. The fund is rated 5-star by Morningstar. The risk grade is above average, and the returns grade is high.
The fund follows a growth style of investing. The risk is spread across companies with the top 10 holdings consisting of 35.25%. The fund has a high risk (measured by standard deviation) than the category average.
| Pros | Cons |
| A top performer in its category. The fund captured the market well when it was rising and falling, better than the category average. | The minimum monthly SIP amount is Rs 1000/- thus marginal investors may not be able to take exposure |
3. Canara Robeco small cap fund direct-growth
Fund analysis:
The fund has outperformed the benchmark over different horizons. The risk grade is average and the returns grade is high.
The fund has a well-diversified portfolio invested across market capitalization. The top 10 holdings consist of a total of 22.88%. The fund is rated 5-star by Morningstar. The fund holds a good risk-to-reward ratio.
The fund has low risk (measured in standard deviation) than the category average.
| Pros | Cons |
| Fund captured the market well when it was rising. The fund captured the market well when it was falling. | Less exposure to small-cap stocks. |
4. Bank of India small cap fund direct growth
Fund analysis:
The fund is rated 5-star by Morningstar. The risk grade is below average, and the returns grade is high.
The fund has a beta of 0.84 indicating that the movement of the fund is less relative to the market movement. The fund follows a growth style of investing. The fund has a low risk (measured by standard deviation) than the category average.
| Pros | Cons |
| My risk grade is below average. Well-diversified portfolio. | The fund has a high expense ratio. |
5. Quant tax plan direct option growth plan
Fund analysis:
The fund’s objective is to generate capital appreciation by investing predominantly in a well-diversified portfolio of equity shares with growth potential. The risk grade is high and the return grade is high.
The fund has a beta of 0.99 which means that the fund movement is very much relative to the market movement. The fund has a high risk (measured by standard deviation) than the category average.
| Pros | Cons |
| Well-diversified portfolio.Tax benefit. | Highly volatile. |
6. Quant infrastructure fund growth option direct plan
Fund analysis:
The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of infrastructure-focused companies. The risk and return grade of the fund is high.
The fund follows a blended style of investing, indicating the fund has both value and growth stocks. The fund has invested majorly in large-cap companies. The fund has outperformed the category average with good margins.
| Pros | Cons |
| Fund has outperformed the category average over 1-Yr, 3-Yr & 5-Yr trailing returns. Fund has outperformed the category average when the market was falling. | Low Assets Under Management. |
7. Quant mid-cap fund-growth option direct plan
Fund analysis:
The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of mid-cap companies. The risk grade is below average, and the returns grade is high.
The fund has a beta of 0.85 indicating that the movement of the fund is less relative to the market movement. The fund has a concentrated portfolio of 34 stocks, investing in both value & growth stocks. The fund has low risk (measured by standard deviation) than the category average.
| Pros | Cons |
| A consistent top performer in its category. The fund captured the market well when it was rising and falling, better than the category average. | Concentrated portfolio of 34 stocks. |
8. Kotak small cap fund direct growth
Fund analysis:
The fund has outperformed the category average in terms of trailing returns over different horizons. The risk grade is above average and the returns grade is above average.
The fund has a beta of 0.95 indicating that the movement of the fund is quite closely relative to the movement of the market. The fund has a well-diversified portfolio of growth stocks consisting of 72 companies spread over different sectors and market-cap companies.
The fund has a high risk (measured in standard deviation) than the category average.
| Pros | Cons |
| The fund has a favorable expense ratio. Fund captured the market well when it was falling. | Too much diversification may hamper the returns. |
9. Quant active fund growth option direct plan
Fund analysis:
The fund’s primary objective is to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of large-cap, mid-cap, and small-cap companies. The risk grade is above average and the returns grade is high.
The fund is rated 5-star by Morningstar. The fund has invested 59.45% in large-cap, 28.07% in mid-cap, and 12.48% in small-cap companies. The fund has outperformed the category average over 1-yr, 3-yr & 5-yr trailing returns.
| Pros | Cons |
| The fund has a risk grade of above average, whereas the returns grade is high. Consistent performance over the period. | Fund has underperformed the category average over 5-Yr trailing returns. |
10. Quant Flexi cap fund direct plan growth option
Fund analysis:
The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of consumption-driven companies. The risk grade is above average high.
The fund has outperformed the category average and the benchmark with good margins over the long-term period. The fund has limited holdings of 36 stocks but is well-diversified across sectors.
| Pros | Cons |
| Attractive risk-to-reward ratio. The fund captured the market well when it was rising & falling, better than the category average. | Exit load of 1.00%, if units redeem within 1 year. |
Benefits of SIP investments
- Compounding: SIPs are based on the compounding theory and prove more advantageous at the end of a specific period. The interest rates are calculated and added based on compound interest which brings forth a better investment return than simple interest.
- Discipline: SIPs help parents become disciplined and regular investors who are fully involved in their child’s future.
- Systematic and easy to manage: In this era, where everyone is so busy, SIPs are very easy to handle. Investors are allotted units every month based on the NAV at the time of their SIP. The amount is automatically deducted from the account of the investor.
- Flexibility: SIP helps to gain control of the finances as it is possible to start or stop a SIP anytime.
- Higher returns: It helps investors to earn greater returns compared to other investment opportunities like fixed deposits.
- Small investments: It is possible to start a SIP investment with as low as INR 100 per month, hence anyone willing to invest in their child’s future can do so easily.
- Tax benefits: Some SIPs like ELSS funds have tax benefits, hence it is doubly advantageous for investors to invest in such schemes.
- The abundance of options: Numerous asset management houses offer SIP options to meet even the minimum criteria of an investor.
- Best deals: The most important benefit of a SIP for regular investors is that they can buy mutual fund units at different prices. The average investment premium is much lower compared to other investments.
How to get higher returns from SIP mutual funds?
To get higher returns from SIP mutual funds, you need the help of an expert or a financial advisor.
They can help you invest right, manage the funds properly and conduct market research to help you maximize your returns. Here is a helpful way to get higher returns from your SIP mutual funds:
- Research the funds that are performing well for a longer time and shortlist the names which show good potential.
- It is important to start investing in SIP as early as possible as it will give you a longer window to save more.
- Create a rough layout financial goal, for example, the time horizon, the amount needed, and your risk profile.
- Invest in mutual funds that have a diversified portfolio to reduce the risk of losing money all at once. Take the help of experts in the EduFund App to make wiser and safer investment decisions.
- Consider the additional expenses and costs associated with the funds like expense ratio (the cost charged by the AMC to manage your funds).
- Tax-saving benefits are attached to several mutual fund schemes that can help parents to save a considerable amount through tax exemptions.
How to start a SIP investment on the EduFund App?
Step 1: Download and Sign up with EduFund
Go online with SIP investments with EduFund. Download the application and sign up with personal details. The whole signup process takes just 3 seconds.
Step 2: Identify your goals for your child’s future
The application provides a gamut of options for your child’s education. Evaluate the goal. Whether you wish to:
- Save for school fees
- Save for higher education in India or overseas
Step 3: Calculate the total cost with a FREE calculator
After identifying the goals, calculate the total costs of higher education for undergraduate or postgraduate studies. You could calculate basing National or International academic education expectations. Select the specialization and the country you are seeking higher education.
Step 4: Get your investment map and invest
Soon after filing the details, you will get how much you could get after investing for the respective number of years. You will get a number of SIP suggestions that you could compare with yours.
You could increase or decrease the sum to invest monthly as per financials.
We provide an overview of your savings transitioning into returns until you get the investment sum. You could go for a lump sum payment if you are an entrepreneur with unstable finances.
Place the order as a secured investment through UPI or other methods. You could start with just ₹100 in Edufund SIP investments.
Step 5: Track, revisit and reset goals anytime
Once you set up a SIP plan, you can edit goals according to the revised economic situation. Edufund captures the sensitivity that comes with finances.
Revisit the plan and modify it as per goals and finances. You will get a new investment plan with new goals. Plan your savings accordingly.
Factors to Take into Account Before Choosing the Best Mutual Funds for SIP 2023 Investing
Systematic Investment Plan (SIP) is a popular way to invest in mutual funds by making regular, fixed investments over time. Selecting the right mutual funds for your SIP investments requires careful consideration of various factors.
Here are key points to evaluate before making your investment decisions in 2023:
1. Investment Goals and Horizon: Identify your investment goals—whether it’s wealth creation, retirement planning, or funding-specific goals. Determine your investment horizon, as different funds suit short, medium, or long-term goals.
2. Risk Tolerance: Assess your risk tolerance before investing. Different funds carry varying levels of risk. Choose funds aligned with your risk appetite to avoid discomfort during market fluctuations.
3. Fund Performance: Analyze the historical performance of mutual funds. Look for consistent returns over multiple market cycles rather than just short-term outperformance.
4. Fund Category: Understand the different mutual fund categories such as equity, debt, hybrid, and thematic funds. Choose categories that match your risk profile and investment goals.
5. Fund Manager Expertise: The fund manager’s experience and track record play a crucial role. Research the manager’s history and style to ensure their approach aligns with your investment philosophy.
6. Expense Ratio: Lower expense ratios are preferable as they directly impact your returns. Compare expense ratios among similar funds to choose cost-efficient options.
7. Fund Assets and AUM: A fund’s size can influence its performance and liquidity. While larger funds might offer stability, smaller ones can be more agile in taking advantage of market opportunities.
8. Consistency of Returns: Look for funds that consistently deliver steady returns over time, even if they are not the highest performers in the short term.
9. Portfolio Holdings: Examine the fund’s portfolio holdings to understand its asset allocation, sector exposure, and quality of securities. Diversification is key to managing risk.
10. SIP Period and Amount: Determine the SIP period and the amount you can comfortably invest regularly. Consistency in SIP investments is more important than the amount invested.
11. Exit Load and Lock-in Period: Check for any exit loads or lock-in periods associated with the mutual funds. These can impact your ability to withdraw funds when needed.
12. Market Conditions and Economic Outlook: Consider the current market conditions and economic outlook while selecting funds. Different sectors perform differently in various market cycles.
13. Tax Implications: Understand the tax implications of the funds you’re considering. Different funds have different tax treatments for gains.
14. Regulatory and Corporate Governance: Research the fund house’s reputation, regulatory compliance, and corporate governance practices to ensure a trustworthy investment.
15. Diversification: Diversify your SIP investments across different fund categories and asset classes to mitigate risks and capture potential opportunities.
Conclusion:
If one selects the right mutual fund then it can fetch you good returns over the period, but the selection criteria should not be based on the returns only.
One should consider other factors like risk, expense ratio, etc.
FAQs
Which is best for mutual fund SIP?
Quant Small Cap Fund Growth Option Direct Plan
PGIM India Mid-cap Opportunities Fund Direct Plan-Growth
Canara Robeco Small Cap Fund Direct-Growth
Bank of India Small Cap Fund Direct-Growth
Quant Tax Plan Direct Option Growth Plan
Quant Infrastructure Fund Growth Option Direct Plan
Quant Mid Cap Fund-Growth Option Direct Plan
Kotak Small Cap Fund Direct-Growth
Quant Active Fund Growth Option Direct Plan
Quant Flexi Cap Fund Direct Plan Growth Option
What is SIP mutual fund?
A Systematic Investment Plan (SIP) is an investment tool in mutual funds at regular intervals. The investor can decide the amount, and date of investment and choose to stop or pause.
Is SIP better than FD?
A SIP is likely to get you better returns than an FD. FD is an investment product while SIP is an investment tool – a way to invest rather than a product itself. You can start a SIP in mutual funds, direct stocks, or ETFs that have historically beaten inflation and FD rates in India.
What is the difference between a SIP and a mutual fund?
Mutual Fund is an investment product while SIP is an investment tool – a way to invest rather than a product itself.
Disclaimer:
This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes.
