Over the years, mutual funds have seen massive growth in the Indian market, which has resulted in the myriad options for the people in the form of best mutual funds to invest. There are various systems that judge it such as Morning Star, CRISIL, ICRA. They consider various quantitative and qualitative factors to select the best mutual funds to invest. These factors include returns, asset size, Standard Deviation, expense ratio, and more. After evaluating each of the factors mentioned, the results are added and the final results are declared.
Before having a look at some of the best mutual funds to invest, let’s discuss why one should invest in mutual funds.
Here are some of the solid reasons why you should invest in mutual funds:
- It is an open-ended scheme, which means it is hassle-free to buy or close a scheme.
- It holds various financial tools to invest in such as fixed income instruments, stocks, gold, and more. This allows you to enjoy the advantages of diversification just by investing in one scheme.
- The money invested by you is completely safe as the entire mutual fund market is regulated by SEBI (The Securities and Exchange Board of India).
- After you have invested your money, you do not have to worry about growing it as it is taken care of by the fund manager who keeps a constant vision at the performance of your invested scheme and changes allocations whenever required.
Here are some of the best mutual funds to invest in India:
Best mutual funds for high-risk investors: This category belongs to those investors who are willing to take high risks for maximum return. They can opt for multi-cap funds and can combine them with large, mid and small caps. Multi-cap funds are suitable for those who do not have any issues in taking high risks. If you are opting for multi-cap funds then you should at least hold the fund for a period of eight years in order to get the best return. Mentioned below are average return rates of the last few years, which can provide you with a better idea of the companies’ performance to select one accordingly.
- Motilal Oswal Mullticap 35: Last year return = 10.37%
Last three years return = 11.45%
Last five years return = 11.69%
- SBI Magnum Multicap: Last year return =16.32%
Last three years return = 12.39%
Last five years return = 10.80%
- Kotak Standard Multicap: Last year return = 15.41%
Last three years return = 13.89%
Last five years return = 10.72%
- Aditya Birla Sun Life Equity: Last year return = 11.17%
Last three years return = 10.78%
Last five years return = 10.37%
- Parag Parikh Long Term Eq: Last year return = 16.32%
Last three years return = 14.15%
Last five years return = 11.08%
Best mutual funds for medium risk investors: If you are someone who is willing to invest in a medium risk mutual fund then one way to do this is by selecting balanced funds along with your preferred combination of debt and equity. It is one of the best mutual funds to invest in India as the risks are medium compared to high-risk funds and returns are better compared to low-risk funds. Balanced funds can be a great asset if you are holding it for around five years or more. We all know that the figures are not constant and tend to change very frequently. Here are average return figures of the previous years of the top mutual funds that can provide a general idea. It will allow you to invest in a particular fund on the basis of its earlier performance.
- SBI Equity Hybrid Fund: Last year return = 15.16%
Last three years return = 12.86%
Last five years return = 9.73%.
- DSP Equity & Bond Fund: Last year return = 17.05%
Last three years return = 10.72%
Last five years return = 9.33%
- Principal Hybrid Equity Fund: Last year return = 3.58%
Last three years return = 10.45
Last five years return = 9.23%
- Canara Robeco Hybrid Fund: Last year return = 13.43%
Last three years return = 11.80%
Last five years return = 9.02%
- HDFC Hybrid Equity: Last year return = 8.55%
Last three years return =9.55%
Last five years return = 8.45%.
The category for low-risk investors is not that popular in India as people are not satisfied with the low returns and tend to avoid it. However, if you are one of them then it is advised that you stick to bond funds that come with less credit risk. Some of the popular schemes for low-risk investments are Nippon India Gilt Fund, SBI Magnum Gilt Fund and Aditya Birla G-Sec Fund. Even if you are choosing a mutual fund scheme, there are some factors that you should keep in mind when you are looking for the best mutual funds to invest in India. If you are willing to get the maximum return then you should increase the tenure of your scheme.