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

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.