“Saving money is wise but investing it is profitable” and what better than a Mutual fund. Mutual funds let you invest in a variety of funds and are also easy to buy and sell. Thereby making every investor’s first choice for investment.
The most prominent type of Mutual funds are:
- Equity Funds
- Debt funds
Understanding each category will help you to choose your investment wisely. Let us explore each in detail. We have a quick list of the mutual funds that you should invest in-
1. Equity Fund –
Equity funds are those mutual funds that primarily invest in stocks. The money that you invest in the equity funds is further invested in various equity stocks on your behalf.
Large Cap Funds – These funds are in the list of the top 100 by Market capitalization. They are considered to be less risky. Mutual funds that one can invest in are –
- Mirae Asset Large Cap Fund– The AUM i.e. Asset Under Management of the fund is 27435cr and the rate of return of the past five years is 16.17% as compared to the benchmark rate of 15.6%. if you analyze the past 10 years’ data the fund has a return rate of 17.74% against the benchmark of 14.68%.
- Canara Robeco Bluechip Equity Fund– The AUM of the fund is 3691cr while the Return of the last five years is 16.83% which is almost 1.23% higher than the benchmark( 15.6%). Also, the fund has a return rate of 15.37% higher than the benchmark which is 14.68%.
- Axis Bluechip Fund– As the AUM of the fund is 29161cr and the return of last 5 years is 17.48%. The fund is able to deliver consistent returns to its investors. If you take the last 10 years’ data into consideration the fund has delivered a 1.8% higher return than the benchmark.
Mid Cap Funds – The funds rank between 100 to 250 by market capitalization. These funds have huge potential to grow. One can invest in the following funds.
- Axis Midcap Fund– The AUM of the fund is 13834cr and the return of the last 5 years is 20.49% as compared to 17.68% which is the benchmark. The fund has given an additional 2.81% returns to its investors over the market standards. Thereby making it to our recommendation list.
- Kotak Emerging Equity Fund– The benchmark of the last 10 years’ return is 17.96% while the fund has managed to give its investors a return of 20.84% which is high as compared to the benchmark. The return indicates the consistent performance of the fund.
- DSP Midcap Fund– Rs 13457cr is the AUM of the fund. The past 10 years’ return from the mutual fund is 18.43% while the benchmark is 17.96%.
Small-Cap Funds – Small caps are those funds that invest in stocks having a market capitalization of less than 5000cr.
- Franklin India Smaller Companies Fund– The fund size is 7214cr. While the fund has delivered a return of 12.66% in the last 5 years and 20.55% returns in the last 10 years which is higher than the benchmark i.e 14.53% and 12.73% respectively.
- SBI Small Cap Fund– The AUM of the fund is 9620cr. The fund has a return of 21.65% in the last 5 years and 24.65% in the last decade.
- Nippon India Smallcap Fund– The Fund size is 16613cr. While the benchmark is 14.53% the fund has a return rate of 21.74%.
ELSS( Equity linked saving scheme) – It is an open-ended equity mutual fund and is also eligible for tax benefits under section 80C of the Income Tax Act.
- UTI Long Term Equity Fund– The AUM the fund is 2046cr while the fund has a rate of return of 15.05% in the last 5 years and 14.51% in the last 10 years.
- Axis Long Term Equity Fund– With an AUM of 31015cr, the fund has managed its investors a return of 17.41% against 15.94% which is the benchmark. The fund has also been able to deliver a 4.74% higher return in the last 10 years as compared to the benchmark.
2. Debt Funds –
Debt Ultrashort Duration Fund – It is an Open-ended debt scheme with a duration of 3 to 6 months.
- SBI Magnum Ultra Short Duration Bond Fund – The total AUM as of 31st July 2021 is 12528 cr and the fund has managed a return of 0.94, 1.84, & 3.7 in the past 3, 6months, and 1 year as against a benchmark of 0.62%, 1.1%, and 2.18% respectively.
- L&T Ultra Short-Term Fund – The fund’s AUM stands at 2777cr. The fund has had a return rate of 0.91 and 3.48 in the past 3 months and a year respectively which is higher than the benchmark return.
- ABSL Savings Fund– The fund has an AUM of 19527cr with a return rate of 1.14% 2.38% and 4.54% respectively in the past 3months, 6months, and 1 year.
Debt: Banking and PSU – As the name suggests these funds are invested in debt and also money market instruments which is issued by banks.
- Nippon India Banking & PSU Debt Fund – The AUM of Nippon banking and PSU Fund is 6570Cr while the Return rate is 9.1% and 7.93% respectively in the last 3 & 5 years against the benchmark return of 3.42% and 3.7%.
- IDFC Banking and PSU Debt Fund – With an AUM of 18853cr the fund has given a return of 9.5% against a benchmark return of 3.42 in the past 3 years.
- Kotak Banking and PSU Debt Fund – The fund had a return rate of 7.97% in the past 5 years against 3.7% of the benchmark and that is why on our list of recommendations.
Debt- Liquid Funds
- Franklin India Liquid Fund: Super Institutional Plan– The fund has a return rate of 3.2% in the past year as compared to the benchmark of 2.18%.
- Axis Liquid Fund– With an AUM of 27007cr Axis has been able to deliver 1.05% more return as compared to the benchmark return in the past year.
- ABSL Liquid Fund– The fund has given a return of 3.2% in the past year and 5.21% in the last 3 years respectively. While the AUM value of the fund stands at 33273cr. Thereby, making to the list of our recommendations.
Debt Medium Duration Fund
- Axis Strategic Bond Fund– The fund has a return rate of 7.75% in the past year as compared to the benchmark returns of 3.49%. If you analyze the data from 3 years the rate of return is 8.06% as compared to 6.86% of the benchmark.
- SBI Magnum Medium Duration Fund– The fund has had a return rate of 7.14% in the past year and 9.6% in the past 3 years against a 3.49% and 6.86% benchmark respectively.
- ICICI Pru Medium Term Bond Fund– With an AUM of 6928cr the fund has given a return rate of 8.35% in the past year and 8.51% in the past 3 years.
Debt Gilt – These funds are invested in low-risk instruments.
- SBI Magnum Gilt Fund – The fund’s AUM stands at 3611Cr while the return from this mutual fund over the year is 10.34%.
- ICICI Pru Gift Fund– The fund has an AUM of 3591cr while the rate of return of the fund is 9.67% in the past 3 years as compared to a benchmark of 11.01%.
Though, doing thorough research of each and every aspect related to every particular fund is practically not possible before you make any investment decision. But, one can consider the overall performance of the fund as the key indicator to choose between so many. One should invest considering the financial objective and tenure of the goal.
Must Read: Hybrid Funds And Its Types
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