Top 10 Mutual Funds

Top Ten Mutual Funds / Best Performing Mutual Funds / Best Funda for SIP/ Best Mutual Funds / Top 10 Mutual Funds / Best Mutual Funds to Invest

Every investor knows that Systematic Investment Plan or the SIP is the best way to tap equity/debt market for wealth creation over a long term. Data suggests that SIPs have been gaining popularity among investors and about 9.26 lakh accounts are added on a monthly basis on an average for fiscal 2018 with an average amount of Rs 3300 per month per SIP account. Increasing awareness and popularity of SIPs made us look at the schemes that have helped create wealth over the period. Let us first discuss how to create SIP portfolio:

Decide upon the asset allocation – It is advisable to keep allocation really simple with large cap, small/mid cap, debt, and balanced funds as categories. While a typical allocation would be 40% towards large cap followed by 20-30% each in other categories. Secondly, the number of schemes in the portfolio should be decided. Typically three schemes for each category is a decent number. The last step includes deciding on the schemes that should go into the portfolio. We, at ORO Wealth, have detailed the top ten mutual funds that should be included in a SIP.

Fund 1: SBI Blue Chip Fund

The fund typically invests in companies having a market capitalization greater than the least market capitalization in BSE 100 index

Why invest: One of the favorite large-cap funds that have outperformed its peers and benchmark over the multi-trailing time period. The fund has been able to perform considerably across market cycle and has low-risk grade coupled with high return grade. The mutual fund is ranked 3 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

Fund 2: Aditya Birla Sun Life Frontline Equity Fund

The fund seeks to generate long-term growth of investment by investing in equities across sectors, and market capitalization

Why invest: The fund has beaten its peers and benchmark over the multi-trailing time period and has generated over 15% of absolute returns. While the fund performed well in the bull market, it has constrained losses during a bear market. While the risk grade is below average, the return grade, which is above average, very well makes the fund a must sought after fund. The fund has been one of the top-performing mutual funds in India over the past decade. The fund is ranked 3 in its category for the quarter ended December 2017 by CRISIL and four stars by Morningstar.

Fund 3: Kotak Standard Multicap Fund

The fund seeks to generate capital appreciation from a diversified portfolio of equity and equity related instruments focusing on few sectors.

Why invest: The fund is one of the best-diversified funds that has beaten its peers across multi-trailing time period generating healthy absolute returns. The risk grade is average while the return grading is considered above average. The mutual fund is ranked 1 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

Fund 4: Reliance Small Cap Fund

The fund seeks to generate capital appreciation by investing in smaller companies that fundamentally sound and are trading at a substantial discount to its intrinsic value.

Why invest: While the fund is not too old, it has successfully beaten its benchmark and peers over the multi-trailing time period. The risk and return grade for the fund is above average thereby making it stand out among peers in its category. The fund is undoubtedly a must add to one’s portfolio with a long-term horizon of 5-10 years. The fund is ranked 1 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

Fund 5: Mirae Asset Emerging Bluechip Fund

The fund seeks to generate income and capital appreciation from a diversified portfolio of equities that are not part of the top 100 stocks by market capitalization.

Why invest: The fund has been able to beat its peers and thus generating over 25% annualized returns over the past five years. The risk and return grade for the fund is above average thereby making it one of the most sought-after funds of current times. The fund is ranked 2 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

Fund 6: ICICI Pru Focussed Bluechip Fund

The fund seeks to invest in 20 large cap companies from the top 200 stocks listed on the NSE on the basis of market capitalization

Why invest: This fund has beaten all its peers and provided over 15% of annualized returns in last 5 years. The fund has been able to perform well across market cycles. While the fund’s risk is below average, the return profile, which is above average, compensates well for the extra risk taken. The fund is ranked 2 in its category for the quarter ended December 2017 by CRISIL and four stars by Morningstar.

Fund 7: Franklin India Smaller Companies Fund

The fund seeks to generate longterm capital appreciation from a portfolio of midcap and smallcap companies

Why invest: The small-cap category fund has performed well in various market cycles. While the returns in the bull market have been significant, the fund’s objective of investing in fundamentally sound companies has helped fund constrain its losses during the bear market. The fund has beaten its peers providing over 30% annualized returns in the last 5 years. The risk grade of the fund is low but return grade is average. The fund is ranked 3 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

Fund 8: Franklin India Focused Equity Fund

The fund seeks to provide capital appreciation by investing in companies with high growth potential while having a reasonable valuation.

Why invest: This diversified fund has performed well across market cycles and has beaten its peers generating over 20% annualized returns in the last 5 years. While the risk grade is average, the return grade is high thereby compensating to subdued risk parameters. The fund is ranked 3 in its category for the quarter ended December 2017 by CRISIL and four stars by Morningstar.

Fund 9: ICICI Pru Balanced Mutual Fund

The fund seeks to invest in equities and related securities as well as fixed income and money market securities with a minimum of 60% in equity and balanced in debt

Why invest: The fund has gained traction over recent time in the balanced category for its performance. The fund has been able to generate healthy returns over time and has successfully beaten its benchmark and category average. The fund has a risk grade of below average category, the return category that is above average very well compensates for the same. The fund is ranked 2 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

Fund 10: HDFC Balanced Fund

The fund seeks to invest in equities and related securities as well as fixed income and money market securities

Why invest: One of the best-balanced funds that have beaten its peers and provided nearly 20% returns over long term. The fund has a risk grade of below average category, the return category that is above average very well compensates for the same. The fund is ranked 1 in its category for the quarter ended December 2017 by CRISIL and five stars by Morningstar.

 

Fund NameReturnsRiskCategory AverageAUM
1-Y3-Y3-YReturn 3YRisk 3Y
SBI Blue Chip Fund11.410.012.37.013.8176.6
Aditya Birla Sun Life Frontline Equity Fund9.69.112.97.013.8197.0
Kotak Standard Multicap Fund11.612.413.77.013.8178.0
Reliance Small Cap Fund29.723.118.613.816.266.1
Mirae Asset Emerging Bluechip Fund13.917.814.313.816.251.3
ICICI Pru Focussed Bluechip Fund13.39.913.17.013.8162.8
Franklin India Smaller Companies Fund18.016.314.013.816.271.3
Franklin India Focused Equity Fund11.59.115.49.914.376.4
ICICI Pru Balanced Mutual Fund11.412.110.38.210.1278.0
HDFC Balanced Fund13.011.410.38.210.1201.9

Note: Returns (in %) as of March 23, 2018, Risk is standard deviation (%) – as of February 28, 2018, AUM is in Rs billion, as on February 28, 2018.

Source: Morningstar India

Conclusion

The funds detailed above are some of the best funds that are suitable for investment through SIP mode. A portfolio of these funds is likely to outperform, and offer high growth for medium to long term. The portfolio with above-mentioned ten funds is designed for all kinds of investors including high-risk investors, moderate risk and low-risk investors. While allocation to small/mid cap funds would increase for high-risk investors, the same would remain modest for risk-averse investors.