The 5 best mutual funds you can invest in today
Equity Funds primarily invest in equity (stocks) and equity-related instruments. According to SEBI’s regulations, an equity fund should invest at least 65% of its assets into equity and equity-related instruments.
These funds are ideal for most people who aim to invest for a longer time horizon for wealth creation. Investors need not possess any financial knowledge before investing their hard-earned money into these well-managed funds, as sufficient research and analysis are conducted by the fund manager and their army of analysts before investing.
The funds are also diversified, hence reducing the blow of volatility (the higher the diversification, the lower the effect of adverse market or underlying security movement) in the market, and also allowing the retail investor to gain returns over smaller investment corpora.
Below is the list of top-performing equity funds, which includes information on their 1-year, and 3-year returns, AUM, the performance of the fund, and their pros, and cons.
1. Axis Long-Term Equity Fund
Minimum Investment Amount (Lump Sum) | Rs 5000 |
Minimum SIP Investment Amount | Rs 500 |
Expense Ratio | 0.72% |
AUM | Rs 28,556.83 Cr |
Performance
The fund has delivered an annualized return of 14.85% over the last 3 years (54.47% over the past 1 year) and has constantly outperformed its benchmark (S&P, BSE 200 Total Return Index).
Pros
- The fund has higher 3-year and 5-year returns as compared to the category average.
- ELSS fund – Tax haven for 80C
Cons
- Assets Under Management (AUM) of the fund are greater than Rs 20,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor the performance
2. Parag Parikh Flexi Cap Fund
Minimum Investment Amount (Lump Sum) | Rs 1000 |
Minimum SIP Investment Amount | Rs 1000 |
Expense Ratio | 0.96% |
AUM | Rs 8,701.65 Cr |
Performance
The fund has delivered an annualized return of 21.11% over the last 3 years (76.57% over the past 1 year) and has constantly outperformed its benchmark (NIFTY 500 Total Return Index).
The fund is suitable for investors who are looking to invest for greater than 3-4 years. The fund invests across market capitalizations (Flexi cap – large, mid, and small-cap) to deliver above-category average returns to its investors.
Pros
- Fund has higher 1-year, 3 years and 5-year returns as compared to the category average
- Low expense ratio
Cons
None.
3. SBI Equity Hybrid Fund
Minimum Investment Amount (Lump Sum) | Rs 1000 |
Minimum SIP Investment Amount | Rs 500 |
Expense Ratio | 0.97% |
AUM | Rs 38,080.12 Cr |
Performance
The fund has delivered an annualized return of 12.20% over the last 3 years (42.72% over the past 1 year) and has constantly outperformed its benchmark (CRISIL Hybrid 35+65 Aggressive Total Return Index).
The fund invests in a mixture of debt and equity (as the name hybrid suggests) – invests in high-growth companies and balances this risk/volatility by investing in fixed-income securities. (At least 65% in equity and 20-35% in debt and money market instruments)
Pros
- Fund has higher 1-year, 3 years and 5-year returns as compared to the category average
- Low expense ratio
Cons
- Assets Under Management (AUM) of the fund is greater than Rs 20,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. The investors should monitor the performance.
4. SBI-Focused Equity Fund
Minimum Investment Amount (Lump Sum) | Rs 5000 |
Minimum SIP Investment Amount | Rs 500 |
Expense Ratio | 1.77% |
AUM | Rs 14,533.37 Cr |
Performance
The fund has delivered an annualized return of 13.08% over the last 3 years (51.60% over the past 1 year) and has constantly outperformed its benchmark (S&P BSE 500 Total Return Index).
The fund aims to deliver high returns to its investors by investing in a highly concentrated portfolio containing equity and equity-related instruments. (At least 65% in Equity and 20-35% in debt or fixed income and 0-10% in REIT/InVIT)
Pros
- Fund has higher 3-year 5 year and 10-year returns as compared to the category average.
- The fund has been in the market for over 10 years.
Cons
- High expense ratio
5. Axis Bluechip Fund
Minimum Investment Amount (Lump Sum) | Rs 5000 |
Minimum SIP Investment Amount | Rs 500 |
Expense Ratio | 0.55% |
AUM | Rs 25,134.85 Cr |
Performance
The fund has delivered an annualized return of 16.55% over the last 3 years (46.32% over the past 1 year). The fund has constantly outperformed its benchmark index (NIFTY 50 Total Return Index).
It invests in large-cap companies which have stable balance sheets and are market leaders in their respective sectors. It provides its investors with stable, reliable, and high returns.
Suitable for investors seeking long-term investment options (of greater than 5 years).
Pros
- Fund has higher 1-year 3 years and 5-year returns as compared to the category average.
- The expense ratio is on the lower end.
- The fund has no lock-in period.
Cons
- Assets Under Management (AUM) of the fund are greater than Rs 20,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor the performance
FAQs
Which mutual fund is best in the current situation?
Here are some of the best mutual funds in the current situation:
- Axis Long-Term Equity Fund
- Axis Bluechip Fund
- SBI Equity Hybrid Fund
- Parag Parikh Flexi Cap Fund
- SBI Focused Equity Fund
What are the best 5-star mutual funds?
- Axis Long-Term Equity Fund
- Axis Bluechip Fund
- SBI Equity Hybrid Fund
- Parag Parikh Flexi Cap Fund
- SBI Focused Equity Fund
What are the top 3 mutual funds?
Some good performing mutual funds in India are:
Parag Parikh Flexi Cap Fund
Axis Bluechip Fund
SBI Focused Equity Fund
Is today the right time to invest in mutual funds?
There is no fixed right time for investing in mutual funds. You can start investing whenever you wish to enter the market and reap the benefits of compounding.
Conclusion
In a nutshell, here’s why should you invest in equity funds –
- Highly diversified
- Can invest in smaller amounts and still reap the benefits of high returns
- Highly regulated by SEBI (Investor Protection)
- Tax benefits – Indexation, LTCG and STCG
- Offer higher returns than traditional instruments (however, have a higher risk than debt funds)
You can get started on your investment journey by downloading the EduFund app today!
Disclaimer
Mutual fund investments are subject to market risks. The past performance of a fund is no surety of the future performance of the fund.
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