Best Mutual Funds in India

Saving for a financial future includes investing. Apart from Bank Fixed Deposits and Equities, Mutual Funds are considered to be one of the sought-after investment options. Before investing, understanding relevant performance factors will help you select the best Mutual Funds suited to you.

Top Performing Mutual Funds

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Where do Mutual Funds Invest?

  • Equities or stocks of various market capitalisation: They invest in shares of listed companies. Wealth creation is the primary objective of these funds. Top performing Mutual Funds that invest in equity have a higher probability to generate high returns especially for long-term investments.
  • Income Bonds or Fixed Income Funds: They are suitable for income generation and are relatively safer investment tools. Debt market instruments like Bonds, Non-Convertible Debentures, Commercial Papers, Gold, or other asset classes.
  • Tax Savings: Equity Linked Savings Scheme invests in equity and equity-related securities. These types of Mutual Funds scheme have a lock-in period of 3 years and offer tax exemption under section 80C.
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Features & Benefits of Mutual Funds

Financial Goal

There are various and different types of Mutual Fund schemes which can be selected based on your financial goals.

Diversification of Portfolio

Spreading your investments over different asset classes is called diversification of the portfolio. It helps in minimising the risk factors associated with different investments.

Liquidity

Purchasing Mutual Funds is a hassle free task. Liquification of the best Mutual Funds is also quick as all the top Mutual Funds have instant redemption available and funds are available in T+2 days.

Return on Investment

For investors looking to beat inflation and increase their returns, investing in Mutual Funds is an advantageous option.

Risk

Mutual Funds are subject to market risks. That being said, Mutual Funds are handled by professional fund managers and they manage the monies invested in the best Mutual Funds. Fund managers are experts in their fields of investment which helps in reducing the risk associated with investments.

Easy Process

Investing in top-performing Mutual Funds is a simple process. It can be done online or offline. Most funds and distributors need only KYC documents and you can start investing.

Regulated

Securities and Exchange Board of India (SEBI) regulates the capital market. Mutual Funds also need to abide by the rules and regulations as laid down by SEBI.

Fund Categories

Hybrid

Dynamic Asset Allocation
Equity Savings
Arbitrage Fund
Aggressive Hybrid Fund
Balanced Hybrid Fund
Multi Asset Allocation
Conservative Hybrid Fund

Debt Mutual Funds

Medium Duration Fund
Overnight Mutual Fund
Low Duration Fund
Dynamic Bond
Gilt Fund with 10 year constant duration
Long Duration Fund
Short Duration Fund
Money Market Fund
Gilt Fund
Corporate Bond Fund
Floater Fund
Liquid Funds
Medium to Long Duration Fund
Ultra Short Duration Fund
Banking and PSU Fund
Credit Risk Fund

Equity

Focused Fund
Flexi Cap Fund
Mid Cap Funds
Multi Cap Funds
Large Cap Funds
Small Cap Fund
Large & Mid Cap Funds
Sectoral Thematic
Value Fund
ELSS Mutual Funds
Dividend Yield Fund
Contra Fund

Solution Oriented

Retirement Fund
Children Fund

Other

Index Funds
FoFs

How to Invest in Mutual Funds?

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Step 1:

Systematic Investment Plan: Through a Systematic Investment Plan (SIP), investors can invest a fixed amount in any Mutual Fund of their choice at regular intervals. The amount can be as little as INR 500 per investment depending on the fund being chosen. SIP is suitable for investors looking to invest for a longer horizon.

Step 2:

Lumpsum Investment: Investors looking to invest a considerable portion of funds at one time can choose a lump - sum investment route. Lump - sum investments should be ideally done when the markets have already taken a nosedive and are showing signs of recovery.

How do Mutual Funds Work?

Mutual Funds invest in Debt and Equity. Within these types of Mutual Fund schemes, there are multiple permutations and combinations which are used, to suit the risk appetite and risk-return ratio that an investor has in mind.

  • Equity-Oriented Funds: These funds invest in shares of listed Small, Mid, and Large-cap companies. There are also Multi-cap funds, Sectoral funds, and Thematic Funds. Small-cap funds invest primarily in equities of listed Small-cap companies; Mid-cap funds in a medium-sized company and Large-cap funds in large companies. Multi-cap invests in a mix of all three capitalizations, Sectoral funds invest in particular sector and Thematic funds invest in a common theme.
  • How do Equity Funds Work: With a lock-in period of 3 years, an Equity-Linked Savings Scheme or ELSS offers tax exemption under section 80C. This Mutual Fund scheme fits well for investors who would want higher returns as compared to investing in Bank FDs or PPF.
  • Debt Funds: Debt Mutual Funds invest in Fixed Income securities, like Bonds, Non-Convertible Debentures, Commercial Papers, and so on. Fixed Income securities are considered to be the best Mutual Funds to buy for investors looking to earn a fixed income.
  • How do Debt Funds Work: By investing in Debt Mutual Funds, investors earn a fixed income by the way of the returns or interest on their investment. Though the concept is similar to a Bank Fixed deposit, the interest generated tends to be higher for Debt Funds.
  • Hybrid Funds: Hybrid Funds invest in Equities as well as Fixed-Income securities.
  • How do Hybrid funds work: Hybrid funds aim to grow wealth and generate income. By shuffling the investment corpus between Equities and Fixed Income instruments, fund managers try to maximize potential returns while they minimize risk with a more balanced portfolio.

What Are Mutual Funds?

  • An investment tool, Mutual Funds are professionally managed investment schemes.
  • Run under SEBI guidelines where investors pool their resources to earn returns on the capital over a course of time.
  • The investment corpus is managed by a fund manager.

Understanding Mutual Funds

Mutual Funds are essentially schemes that pool funds from various investors and are managed by a fund manager. The Mutual Fund scheme will then invest this pooled money in the declared asset classes. Investors can buy or are allotted units as per the fund’s current Net Asset Value.

How To Choose a Suitable Mutual Fund?

Mutual Funds should be selected keeping in mind two major factors among others; the potential risks, and the potential returns.
Risk and returns are directly proportional when investing in Top Performing Mutual Funds. Higher the potential risk, higher can be the potential returns. This means that while the top-performing Mutual Funds will most likely have the highest returns, they will also possess the characteristic of higher risk. Investors should choose a suitable Mutual Fund keeping in mind their risk appetite and the potential returns they aim to seek.

When Should You Invest in Mutual Funds?

  • Money when kept stagnant can loose value. Inflation is a constant in everyday life. This means the value of money decreases with time as the cost of goods and services increases. It is thus prudent to have an investment option that gives an inflation-adjusted return on your money.
  • Bank deposits are considered to have a high degree of safety but post adjusting for inflation their returns tend to be lower than Mutual Funds. Thus anyone looking for returns that are better adjusted to inflation should consider investing in the top Mutual Funds.This also means that investors will have to take on additional risks as compared to bank deposits.
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Frequently Asked Questions (FAQs):

1. What are Mutual Funds and How do they Work?

Mutual Funds are investment schemes where investors pool their funds to earn returns on the invested funds over a period of time. These funds are invested in various asset classes based on an investor's financial goals. When these asset classes appreciate, they provide returns to the investors.

2. How to Choose a Suitable Mutual Fund?

Your choice of Mutual Funds should depend on your investment goals, the investment horizon, your risk appetite, and the returns expected.

3. When Should you Invest in Mutual Funds?

Anytime you wish to start an investment is ideally the best time. In case one is unsure, consulting a financial advisor would be helpful before starting.

4. What is the Net Asset Value of Mutual Funds?

The Net Asset Value of Mutual Funds is the fund’s assets less its liabilities per unit divided by number of shares outstanding. NAV is the market value of the assets or securities held by the scheme.

5. How to Invest in Mutual Funds with Nivesh?

Any investor can enjoy the benefits of investing through Nivesh in the following easy steps:
- Create an account in Nivesh by providing your basic KYC details.(If you already have an account then just login into your account)
- On your portfolio page click on the Buy New tab at the right top corner of the screen. - Select the category and choose the funds you want to purchase. - If you already know the name of the fund to buy", then you can search the particular fund through Quick Order. - Fill the transaction details and confirm.You can place up to 5 orders in one go. - You can make payment through your registered account through UPI, "Direct Pay", "or NEFT / RTGS", "Bank Mandate or Cheque.For same - day NAV", "select UPI", "Direct Pay or NEFT / RTGS as other payment options may take a few days to clear", Nodal account takes about 1 - 2 days to clear payment from the approved mandate and cheque takes about 2 - 5 days in clearing due to which you will not get the same - day NAV.

6. How Much Time is Taken for Mutual Funds Investment Through Nivesh?

In case investors Mutual Fund KYC is complete, it take about 5-10 minutes for 1st transaction and later the subsequent transactions can be done in less than a minute And, in case Mutual Fund KYC is not complete than process will take little more longer time, investor will have to complete KYC first from our portal and it takes about 24-48 hours to the KYC to be approved and once KYC is complete transactions can be done in less than a minute time.

7. What is the Commission Charged by Nivesh on MF Investments?

We don't charge any commission for MF investments through our portal.