As an investor, have you ever wondered- what are the best mutual funds to invest in India?

Well, the surefire way to come across the best mutual fund scheme is having patience and monitoring the market.

Before you invest in mutual funds, monitor the performance of various mutual funds. It will help you get a hang of the factors that affect the performance of mutual funds and how do they affect the performance of mutual funds in India.

Before we walk down the best mutual funds to invest road, we have decoded mutual funds below:

A mutual fund is an investment instrument. Under a mutual fund plan, a pool of money is collected from various investors who invest in securities such as money market instruments, stocks, bonds, and other assets.

Mutual fund investment is managed by an asset management company (AMA). An AMA manages a group of investors and invests their money on their behalf in bonds, stocks, and other avenues.

When you invest in a mutual fund, you get mutual fund units under your name. These units indicate your contribution to a specific fund. As per your preference, you can purchase or redeem the units at the prevailing Net Asset Value (NAV).

Usually,Net Asset Valueof mutual fund changes on a daily basis as per the underlying assets of a particular fund.

While mutual funds are subject to market risks, they are considered as a safe investment havens. Dont get confused. It is becausemutual fundsare registered and operated as per Securities and Exchange Board of Indias regulations.

The main benefit of mutual fund investment is that the investor gets access to professional fund management as well as diversified portfolios at a nominal charge.

As an investor, its perfectly normal to have this query. Before you start investing in mutual funds, knowing best mutual funds will help you opt for a fund that will fulfill your investment expectations.

At times, potential investors dont know what the best mutual fund to invest in India is and they keep on postponing mutual fund investment.

There is a wide range of best mutual funds to opt for. The selection of funds depends on various factors such as your investment goals, your risk-appetite, your age, your investment horizon etc. For you, the best mutual fund to invest in is the one that fulfils your individual investment expectations.

When it comes to selecting the best mutual funds to invest in India, time plays an important role. If you want to accomplish your short-term investment goals i.e. the investment goals you want to accomplish in less than 5 years, you can opt for debt mutual funds. If you want to accomplish your long-term investment goals i.e. the investment goals you want to accomplish in more than 5 years, you can opt for equity mutual funds or hybrid mutual funds.

Mentioned below are the various types of mutual funds offered under various mutual fund categories. Based on your investment objective, you can select the best mutual funds to invest in India.

Also known as stock funds, equity funds invest in stocks. Under equity funds, the money is pooled in from investors coming from varied backgrounds and is invested into shares offered by different firms. The performance of the shares (price-hikes/ price-drops) in the market is the determinant of the returns/ losses.

Note-Since equity funds offer instant growth of the fund, they come with a high-risk factor. The instant growth makes equity fund one of the top-performing mutual funds in India.

These are best mutual funds to invest in India for passive investors having a low-risk appetite who want a small but regular source of income. These funds make an investment in securities providing fixed-income such as securities, bonds, treasury bills, Monthly Income Plans etc.

Usually, money market funds are offered by the government, corporations or banks by issuing dated securities, T-bills, certificate of deposit, bonds etc. If the investor opts for a short-term plan for up to 13 months, the risk is neutralized to a certain extent. The diminished risk makes it best mutual funds to invest in India.

Also known as balanced funds, hybrid funds are the perfect blend of bonds & stocks. The balanced funds bridge the gap between debt funds and equity funds. These are the best mutual funds to invest in India for investors having a high-risk appetite.

OE funds dont come with any restriction when it comes to units or time period. As per their convenience, the investor can buy/sell funds and exit at the current NAV (Net Asset Value).  Since these funds impose no restriction, they are the top performing mutual funds in India.

Beforehand, these funds come with fixed unit capital to invest. As a result, the funds cant be opted for more than the pre-agreed units. Few close-ended funds come with a timeframe to buy units.

Having traits of open-ended as well as closed-ended funds,interval mutual funds(IMF) can be bought or exited during particular intervals only. The intervals are selected by the fund house.

Usually, growth funds invest a huge part of the investment in shares and growth sector. The funds are best mutual funds to invest in India for investors having a high-risk appetite and a fair share of idle money.

Belonging to the family of debt mutual funds, the funds distribute money in a mix of bonds, securities, certificate of deposits etc. These funds are managed by professional fund managers. Historically, the funds have earned better returns as compared to the deposits.

These funds belong to the category of debt funds. They invest in debt and money market instruments having investment tenure of up to 91 days. The investment is capped at Rs. 10 lakhs.

Equity Linked Saving Scheme (ELSS) offers dual benefits- wealth generation and tax-saving. Additionally, it comes with the lowest lock-in period i.e. 3 years. These funds are one of the top performing mutual funds in India for salaried investors having long-term investment goals.

While these funds offer steep monetary gains, these funds are susceptible to market performance. Having said that, the investor can opt for the fund according to the beta i.e. a tool to measure the movement of the fund. The funds are best mutual funds to invest in India for investors having a high-risk appetite.

True to its name, capital protection funds protect the principal while earning smaller returns up to 12%. The fund manager invests the money in CDs, bonds and the remaining money in equities.

In order to enjoy triple indexation, investor opts to invest in these funds at the end of the financial year. These funds come with a fixed maturity period ranging from 1 month – 5 years. The Fund Manager invests the money in an investment option having the same term, to earn accrual interest by the time FMP matures.

The funds invest a part of investors income in an opted Pension Fund to accumulate over a period of time. Investment in these funds secures investor and their familys financial future and provides a source of income after their retirement. These funds are one of Indias top performing mutual funds for investors looking forward to securing their retirement.

and are the least risky funds. As a result, it offers low returns up to 6%. These funds are the top performing mutual funds in India for investors wanting to accomplish their short-term financial goals.

risk funds offer up to 8% return and the flexibility to switch when valuations offer stability. The funds are best mutual funds to invest in India for investors investing at the time of unexpected crisis (national) or rupee depreciation.

These funds come with medium risk factor as the fund manager invests a part off investment money in debt funds and the remaining money in equity funds. The

is not that turbulent, and the average returns can be up to 12%. The funds are best mutual funds to invest in India for investors having a moderate risk appetite.

These funds are highly prone to market volatility. As a mandate, their performance is reviewed on a daily basis. These funds offer up to 30% returns. These funds are best mutual funds to invest in India for investors having a high-risk appetite.

True to its name, these funds invest only in a specific sector. As a result, it comes with a high-risk factor. These funds are also known as theme-based mutual funds. The investor opting for

ought to keep up with the latest sector-related trends. It will help them know when to exit the fund. The funds are the best mutual funds to invest in India for investors wanting to invest in a specific sector.

As the name suggests, these funds invest money in a specific index by identifying stocks and market indexs corresponding ratio and investing the money in a similar proportion of the similar stocks. These funds are the best mutual funds to invest in India for passive investors.

offer diversification in an investment portfolio by investing money in diverse categories of funds. Simply put, these funds invest in one fund that further invests in various funds. The funds are the best mutual funds to invest in India for investors who want diversification in their investment portfolio.

Since India is an ever-changing and emerging market, these funds invest in the domestic stock market. These funds offer a high return on investment and they are susceptible to market risk. The funds are the best mutual funds to invest in India for investors who want to invest in the domestic stock market.

These funds can offer good returns regardless of the performance of the Indian stock market. These funds are the best mutual funds to invest in India for investors wanting to invest in foreign funds. The investor can opt for a theme-based allocation approach, feeder approach, or hybrid approach.

invest in global markets, they also invest in the investors home country.

invest purely in foreign markets. Due to various policies, currency and market variations

can attract a high-risk level. That being said, they provide a hedge against inflation. The funds are Indias top performing mutual funds for investors who want a hedge against inflation.

These funds can be the best investment option as the investor invests their money in acclaimed real estate firms instead of projects. These funds are the best mutual funds to invest in India for investors having a long-term investment horizon. When an investor purchases a property, it nullifies legal hassles and risks and provides liquidity to certain limits.

These funds offer an opportunity to invest in diverse and multiple trades. The offered returns are not regular but performance-based of commodity or stock company. In India, gold is the sole-commodity that mutual fund investors can invest directly in. These funds are Indias top performing mutual funds for the investors having a sufficient risk-tolerance who want to diversify their investment portfolio.

These funds offer a hedge against unfavourable market tendencies along with good returns. These funds are Indias top performing mutual funds for investors who dont want to stretch their portfolio limits.

These funds offer returns when an investor sells their shares when their stock value is down, only to purchase them at a lesser price. After that, the investor holds the units until the stock price increases. These funds are the best mutual funds to invest in India for investors who enjoy trading.

These funds provide flexibility to the investor by combining equity, debt, and gold in the perfect ratio.  These funds can regulate debt-equity distribution on the basis of the fund managers inferences of the latest market trends or a pre-set formula. These funds are best mutual funds to invest in India for investors who want to allocate their funds in equity, debt, and gold.

These funds are gifted to the loved ones of fund buyer. These are the best mutual funds to invest in India for investors who want to ensure the security of the financial future of their loved ones.

have unleashed new investment prospects that have enabled investors to have an exposure to specialized sectors along with international stock markets. These are the best mutual funds to invest in India for investors who want to invest in specialized sectors as well as international stock markets. Now that you know best mutual funds to invest in India amongst the different type of mutual funds offered in India, lets move to the methodology for mutual funds.

Mentioned below is the methodology for different mutual funds:

Here are the parameters that will help you opt for the equity mutual fund plans.

– It should be rolled on a daily basis for the last 3 years.

is used for calculating the consistency of a mutual fund. The

exponent is a measure of randomness of a funds NAV series. The funds with high

is below 0.5, the return series is mean reverting.

is equal to 0.5, the return series a geometric Brownian time series. This type of time series is slightly difficult to forecast.

is above 0.5, the return series is persistent. The greater value of

– Considering specifically the negative returns on the mutual fund scheme for this measure, here are the results:

Y divided by the number of days taken for computing the ratio = Z

for the last 3 years, outperformance is measured.

shows the returns (risk-adjusted) offered by a mutual fund plan relative to the potential market return as predicted by the Capital Asset Pricing Model (CAPM).

Higher the Alpha, higher the portfolio performance has outstripped the market predicted returns.

Here is how average returns offered by the mutual fund are computed:

– The threshold asset size for equity funds is Rupees 50 crore.

Here are the parameters that will help you opt for the debt mutual funds.

– It should be rolled on a daily basis for the last 3 years.

is used for calculating the consistency of a mutual fund. The

exponent is a measure of randomness of a funds NAV series. The funds with high

is below 0.5, the return series is mean reverting.

is equal to 0.5, the return series a geometric Brownian time series. This type of time series is slightly difficult to forecast.

is above 0.5, the return series is persistent. The greater value of

– Considering specifically the negative returns on the mutual fund scheme for this measure, here are the results:

Y divided by the number of days taken for computing the ratio = Z

Fund return is computed on the basis of rolling returns daily, benchmark return, and funds active return.

The threshold asset size for debt funds is Rupees 50 crore.

Here are the parameters that will help you opt for the hybrid mutual funds.

– Rolled on a daily basis for the last 3 years.

is used for calculating the consistency of a mutual fund. The

exponent is a measure of randomness of a funds NAV series. The funds with high

is below 0.5, the return series is mean reverting.

is equal to 0.5, the return series a geometric Brownian time series. This type of time series is slightly difficult to forecast.

is above 0.5, the return series is persistent. The greater value of

– Considering specifically the negative returns on the mutual fund scheme for this measure, here are the results:

Y divided by the number of days taken for computing the ratio = Z

– Outperformance is calculated specifically for the equity portion as well as the debt portion. Here is how outperformance is calculated:

Fund return is computed on the basis of rolling returns daily, benchmark return, and funds active return.

for the last 3 years, outperformance is measured.

shows the returns (risk-adjusted) offered by a mutual fund plan relative to the potential market return as predicted by the Capital Asset Pricing Model (CAPM).

Higher the Alpha, higher the portfolio performance has outstripped the market predicted returns.

Here is how average returns offered by the mutual fund are computed:

– The threshold asset size for hybrid funds is Rupees 50 crore.

Franklin India Ultra-Short Bond Fund Super Institutional Plan

Disclaimer-Updated on 01.07.2019, the listed top 10 mutual funds are in no particular order/ rank.

Now, lets explore the top 10 mutual funds in details:

Birla SL Frontline Equity Fund has a track record of more than 15 years. No wonder, it has been consistently performing well in the market. It ensures good returns by investing in top fast-growing industries of India such asFinance, FMCG, Oil & Gas, ITetc. This fund is one of Indias top performing mutual funds for investors who want long-term capital growth in equity.

This fund is one of the best mutual funds to invest in India as it is renowned for following the contrarian investment style. This fund is popular among the investors and advisors for offering a high return on investment. It offers return by investing in stocks having attractive estimations.

HDFC Mid-cap Opportunities Fund is one of Indias top performing mutual funds for investors who can endure market volatility. It generates long-term capital appreciation. Currently, it invests 56% of its corpus in various medium scale organizations.

This fund is one of the best mutual funds to invest in India since it is renowned for having a lowPortfolio Turnover Ratioof 13%. DSP Micro Cap Fund invests approximately 65% of its corpus in small-cap stocks. In addition to that, it follows buy and hold investment strategy.

This fund can be considered as a flexi-cap fund that offers tax benefits. It is one of Indias top performing mutual funds as it attracts a low level of risk and offers high returns.

Rated as one of the best mutual funds to invest in India offered in the mid-cap category,L&T Mid Cap Fundis a direct fund plan. Ever since its launch, the fund has returned approximately 20% p.a.

Since the year 2018 was rough for companies offering funds in small-cap and mid-cap space,L&T Mid Cap Fundhas registered negative return. That has set the return trend for the small-cap and mid-cap based funds. As per the 3 years & 5-years returns, the fund has outperformed itself along with the category average approximately 5 per cent.

Ever since its launch in the year 2008, Reliance Gilt Securities fund has a track record of delivering returns at 10.70 per cent. For gilt fund category, the offered returns are remarkable. The offered returns make this fund Indias top performing mutual fund.

The first year return- 15.55 per cent and third year return- 11.13 per cent makes this fund one of a kind in the category. Investment in this fund is relatively safer as 97% of its assets are invested in the sovereign category bonds.

The fund invests in money market instruments as well as debt. For the investor, investment in the mix ensures fund high-liquidity. This fund is one of the best mutual funds to invest in India since it offers high-liquidity.

Categorized as an ultra-short-term debt fund, this fund makes an investment with the maturity period of 180 days. Having said that, the fund comes with an option of investing in shorter as well as longer maturity period. The period is based on market requirements.

The fund is managed byAditya Birla Sun Life Mutual Fund. ABSLMF takes pride in being one of the biggest fund houses in of Indi. True to its name, Aditya Birla SL Short Term Opportunities Fund invests specifically in short-term debt securities along with money market.

The fund is invested in AAA credit rated and Sovereign debt instruments. Such instruments are one of the safest investment options offered in the debt market. Being one of Indias top performing mutual funds, this fund is ideal for investors having a low-risk appetite.

Ever since its launch in the year 2013Axis Liquid Fundhas augmented assets worth 33,000 crores. Consistently, the fund has outperformed its own returns.

The fund has invested approximately 85 per cent of its assets in papers having A1+ rating. The fund has delivered fairly stable returns in 1, 3 and 5 years framework

With an average mean at 7.6 per cent, the fund has delivered stable returns in the framework of 1 year, 3 years and 5 years. The stability of the returns makes this fund is one of the best mutual funds to invest in India.

Ideally, every investor wants to invest in best mutual funds to invest in India so that they can enjoy high returns on investment. The key to select the best mutual funds to invest in India is to shortlist the mutual funds keeping the following factors in mind.

Opt for a mutual fund that helps you accomplish your personal financial goals. For that, you ought to assess your financial need first. Each mutual fund fulfills an investment objective that might or might not help you accomplish your goal. The fund that helps you accomplish your investment goal is the best mutual fund to invest in India.

If you have a short-term investment horizon, opting for a long-term mutual fund will be of no good and vice versa. That is why mutual fund experts advise opting for a mutual fund as per your investment horizon.

Every investor wants to opt for a mutual fund that offers them high returns. Mutual funds offering a high return on investment attract high risk. As an investor, you should opt for one of Indias top performing mutual funds keeping your risk-appetite in mind.

At the time of selecting a mutual fund, analyzing its expenses ratio is of utmost importance. For managing investors money, the fund house charges an annual fee as a percentage. The charged expense ratio can affect the returns generated by the fund. Higher the expense ratio, low the returns the investor will be.

The mutual fund you opt for should stand the test of time. Since mutual funds are subject to market risks, you must be wondering how to ensure that your preferred fund will offer good returns.

This is where fund history kicks in. The performance of the fund that is recent is yet to be tracked. Having said that, a fund having a good track record of consistent performance is more likely to offer good returns. To ensure the safety of your mutual fund, track the history of your preferred fund for a minimum period of 5 years.

The fund manager has an important role to play when the performance of a fund is concerned. While mutual fund investment is process oriented, the responsibility of ensuring good performance of the fund falls on the shoulder of the fund manager.

Thats why its good to check the track record of the fund manager. You can check the performance of the fund during the market slump and rally. A fund that has generated consistent returns during the bear runs is a result of robust fund management.

We hope now you know everything about mutual funds and how to invest in mutual funds in India. When it comes to selecting Indias top performing mutual funds, this knowledge will help you make an informed investment decision and diminish the risk to a certain extent.

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