Best Mutual Funds in India for SIP in 2018
Want to invest in the best mutual funds but lost in the ocean of 8,000 mutual fund schemes in India? The financial wizards at the Upwardly Research Team have done the hard work on your behalf and prepared the best mutual funds for SIP investing in 2018. We present to you the best mutual funds across different categories.
Large cap equity mutual funds invest in a chosen portfolio of large companies like HDFC Bank, Infosys, Indian Oil and so on. These companies have proven themselves over the years and reached the top spots of their industries. Profits of large Indian companies have started to improve in 2018 which should see the large cap funds performing well in 2018.
With asset size of 17,000 crores, Kotak Select Focus is one of the most trusted large cap funds. 13% annualized 3-year returns and 21% annualized 5-year returns make it one of the best performing large cap funds in the market. It has beaten its benchmark in all 7 years since the launch, a rare feat! An SIP worth ₹5,000 in this fund started 5 years ago is worth ₹5.21 lakh now. The fund is managed by Harsha Upadhyaya, Chief Investment Officer of Kotak Mutual Fund.
Mutli Cap or Flexicap or Diversified Equity funds invest in companies of all sizes. The allocation between large, mid and small cap stocks varies as per fund manager’s outlook of the market with an objective of making the best returns from equities at any given time.
Following a mantra of “Buy Right, Sit Tight”, this fund invests in a select set of companies with a focus on quality of business, growth in earnings, longevity of the business model and a fair price. Within 4 years of launch, this fund has garnered 11,000 crores worth of investments which demonstrates the credibility this has fund has built with investors. With 19% annualized returns in the last 3 years, MOST Focused Multicap 35 Fund has performed handsomely and comfortably beat its benchmark and the peers. An SIP worth ₹5,000 p.m. in this fund started 3 years ago is worth ₹2.50 lakh now. The fund is managed by Gautam Roy who is a Senior Vice President at Motilal Oswal AMC.
Mid Cap equity mutual funds primarily invest in medium size companies with high growth potential. While this fund category is inherently more risky than Large-cap and Flexicap, average returns in this category have been higher than Large-cap and Flexicap funds over the last 3 years.
With 3-year annualized returns of 22% and 5-year returns of 31%, this mid-cap fund has delivered strong performance. It has outperformed its benchmark and most of its peers in every single year since its inception. And this outperformance has come a lower risk than other midcap funds. An SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹6.68 lakh now! The fund is managed by Neelesh Surana, Chief Investment Officer at Mirae Asset AMC.
Funds in this category primarily invest in small-sized companies. Shares of smaller companies can give multibagger returns but also carry a significant downside risk. Good funds in this category have outperformed funds from other categories in the last 5 years. While it is not recommended to do all your SIP in small cap funds, they are a good addition to your SIP portfolio.
This is absolutely the top equity fund in the country today with mega annualized returns of 36%, 24% and 53% in the last 5, 3, and 1 year respectively. An SIP of ₹5,000 in this fund started 5 years ago would have become worth a staggering ₹7.74 lakh now! This fund is managed by Samir Rachh, an experienced fund manger at Reliance Mutual Fund.
Investments in ELSS mutual funds help you save taxes up to ₹46,350 per year as per Section 80C of Income Tax. Most individuals invest in ELSS mutual funds towards the end of a fiscal year between December and March as one-time (lumpsum) investment. You can play it smart by doing a monthly SIP in ELSS mutual funds. Since the money gets invested throughout the year, it eliminates the pressure to source money for investments at one go and brings you superior returns at the same time.
This tax saving ELSS mutual fund has a spectacular history of superior returns. Started in 1996, ABSL Tax Relief 96 is simply the best ELSS fund having delivered a staggering 25% annualized returns since then! An SIP of ₹5,000 p.m. started 5 years ago in this fund is worth ₹5.4 lakh now while also saving ₹90,000 in income tax. This fund has been managed for the last 12 years by Ajay Garg, a senior fund manager at Aditya Birla Sun Life AMC.
Balanced funds invest in a mix of equity and debt to reduce the risk from equity investing while still generating good returns. They are a great choice for investors who want to invest in equities but have do not have the ability to digest fluctuations (volatility) associated with equity returns.
With assets of ~26,000 crore, ICICI Prudential Balanced fund is the second largest balanced fund in India. 18% annualized returns in last 5 years and 12% in the last 3 years make it one of the best performing balanced funds. Unlike some of the other well-known balanced funds, ICICI Prudential Balanced Fund is a true balanced fund since it invests predominantly in large cap companies to reduce volatility in returns. It is worthwhile to note than when Nifty 50 went down by 24% in CY2011, this fund went down by only 9%! An SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹4.85 lakh now. This fund is managed by Sankaran Naren, Chief Investment Officer at ICICI Prudential Mutual Fund along with Atul Patel and Manish Banthia.
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Originally published at www.upwardly.in on January 28, 2018.
