Which is the best mutual fund to invest in? We can segregate mutual funds based on their underlying assets such as equity, debt or gold. These funds have different risk profiles and investment objectives. And even among these there are different sub categories like in equity funds we have Large cap funds, mid cap funds etc. So there is not one mutual fund. You need to understand the objectives and choose accordingly. Also different websites, finance influencers come out with their own mutual funds list like valueresearchonline.com or money control or ET Money and Mint. We have also given these for your reference also what mistakes mutual fund investors should avoid.
Recap of the Year 2022
The year 2022 began with major stock indices showing sharp consolidation from their lifetime highs on the back of the fast-spreading Omicron variant of COVID-19, followed by the war in Ukraine. The economic uncertainties and inflationary pressures, along with fears of global recession, caused foreign investors to shy away from investing in Indian equity markets, thus leading to sharp losses for the investors.
However, towards the second half of the calendar year the Indian economy showed resilience compared to global peers. Consequently, the equity market witnessed a sharp rise and once again tested the previous highs. Overall, on a YTD basis, the Nifty 50 has risen by 5.5% (as of November 18, 2022), while the Nifty 500 index rose by 3.7% during the same period
| Category | Best Equity Mutual Funds |
| Large Cap Fund | HDFC Sensex Fund/UTI Nifty Index Fund |
| Large & Mid Cap Fund | SBI Large and MidCap Fund
Passive: ICICI Pru Nifty Next 50 Index Fund |
| Flexi Cap Fund | Parag Parikh Flexi Cap Fund |
| ELSS | Mirae Asset Tax Saver Fund/DSP Tax Saver |
| Gold Fund | Axis Gold Fund/Kotak Gold Fund |
Constructing the Mutual Fund Portfolio
I suggest constructing the portfolio as below within your equity portfolio.
50% Large Cap Index+20-30% Nifty Next 50/Active Midcap Fund+20-30% Flexi Cap Funds/Hybrid Funds + 5% in Gold
50% Large Cap Index+30% Nifty Next 50/Active Midcap Fund+20% Flexi Cap Funds+ 5% in Gold
50% Large Cap Index+20% Nifty Next 50+30% Hybrid Funds + 5% in Gold
50% Large Cap Index+20% Nifty Next 50+30% Flexi Cap Funds + 5% in Gold
However, my favorite is 75% Index and around 20% Flexi Cap+ 5% in Gold
Categories of Mutual Funds
As per the SEBI categorisation,
Large-cap Funds invest a minimum of 80% of their corpus in equity (stocks) and equity-related instruments of large-cap companies, defined as the top 100 companies in terms of market capitalisation. The advantage of investing in large-cap companies is that they are well-established, with reliable brand equity,
competitive advantage, strong balance sheet, and economic moat.
Flexi-cap mutual funds have the mandate to invest a minimum of 65% of their assets in equity and equity-related instruments with dynamic asset allocation across large-cap, mid-cap, and small-cap stocks.
Large & Midcap mutual funds have the mandate to invest to invest a minimum of 35% of their corpus in equity and equity-related instruments of large-cap and mid-cap companies listed as the top 250 companies in terms of market capitalisation.
Mid-cap mutual funds have the mandate to invest a minimum of 65% of their assets in equity and equity-related instruments of mid-cap companies, ranked from 101st to 250th in terms of market capitalisation.
Small-cap Funds are equity-oriented mutual funds mandated to invest at least 65% of their assets in equity and equity-related instruments of small-cap companies. Small-caps are defined as companies ranking beyond 250 in terms of full market capitalisation. Though Small-caps have high return potential, there are various risks associated with them
ELSS, Equity Linked Saving scheme, also known as tax-saving mutual funds, are diversified equity funds that come with the dual advantage of wealth-building potential and tax-saving benefits. As per SEBI’s categorisation norms for mutual funds, ELSS are open-ended schemes with a statutory lock-in of 3 years and tax benefits. ELSS invests a minimum of 80% of its assets in equity & equity-related instruments.
Valueresearch Online Mutual funds
Best Mutual Funds to Invest Valueresearch
Best Mutual Funds to Invest Valueresearch
Best Mutual Funds by MoneyControl
| Large Cap (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Canara Robeco Bluechip Equity Fund – Regular Plan – Growth | 28.39 | 4.33 | 35.89 | -0.59 | 1.29 | 31.37 | 4.13 | 15.89 | 22.59 | 23.01 | 1.85 |
| Mirae Asset Large Cap Fund – Regular – Growth | 33.28 | 7.9 | 52.5 | 3.86 | 7.65 | 38.58 | 0.22 | 12.87 | 13.53 | 26.23 | 2.4 |
| Flexi Cap (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Kotak Flexi Cap Fund – Growth | 33.45 | 5.05 | 57.77 | 2.95 | 8.67 | 34.31 | -0.34 | 12.38 | 11.74 | 23.6 | 4.61 |
| Parag Parikh Flexi Cap Fund – Growth | N/A | 11.24 | 44.25 | 8.74 | 3.52 | 29.36 | -0.37 | 14.65 | 32.74 | 44.08 | -5.29 |
| UTI Flexi Cap Fund – Growth | 32.15 | 6.98 | 46.84 | 0.77 | 0.74 | 30.09 | 4.37 | 11.66 | 30.73 | 31.64 | -10.98 |
| Mid Cap (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Axis Midcap Fund – Growth | 52.6 | 2.78 | 75.8 | 0.8 | -3.35 | 41.99 | 3.81 | 11.74 | 25.75 | 37.29 | -3.61 |
| DSP Midcap Fund – Regular Plan – Growth | 45 | 0.51 | 69.74 | 6.68 | 10.17 | 39.8 | -9.76 | 9.11 | 23.25 | 26.04 | -4.46 |
| Invesco India Mid Cap Fund – Growth | 41.7 | 5.33 | 76.56 | 6.35 | 0.45 | 44.32 | -5.16 | 3.33 | 24.15 | 40.37 | 0.08 |
| Kotak Emerging Equity Fund – Growth | 47.99 | -5.59 | 85.93 | 8.16 | 9.73 | 43 | -11.42 | 8.21 | 21.34 | 44.28 | 4.61 |
| Small Cap (Satellite) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Axis Small Cap Fund – Growth | N/A | 1.5 | 83.79 | 9.2 | 3.89 | 38.31 | -8.6 | 18.93 | 22.7 | 56.3 | 2.43 |
| SBI Small Cap Fund – Regular Plan – Growth | 31.91 | 6.75 | 110.45 | 19.92 | 0.39 | 78.66 | -19.66 | 6.06 | 33.48 | 44.19 | 8.62 |
| ELSS (Core/Satellite) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Canara Robeco Equity Tax Saver Fund – Regular Plan – Growth | 29.97 | 4.45 | 45.24 | 0.4 | -0.7 | 31.96 | 3.33 | 11.3 | 26.99 | 33.02 | 1.12 |
| Kotak Tax Saver Fund – Growth | 36.25 | -7.03 | 56.7 | 1.23 | 6.77 | 33.76 | -3.3 | 12.61 | 14.77 | 31.5 | 6.43 |
| Focused (Satellite) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Axis Focused 25 Fund – Growth | 15.1 | 4.46 | 38.98 | 4.03 | 4.2 | 45.15 | 1.32 | 15.37 | 20.88 | 22.08 | -12.55 |
| SBI Focused Equity Fund – Regular Plan – Growth | 56.31 | -8.29 | 57.75 | 3.5 | 1.08 | 44.73 | -3.88 | 15.89 | 14.61 | 41.51 | -7.39 |
| Aggressive Hybrid (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Canara Robeco Equity Hybrid Fund – Regular Plan – Growth | 26.37 | 3.46 | 45.43 | 5.61 | 2.98 | 25.19 | 1.68 | 11.77 | 19.47 | 21.51 | 2.02 |
| DSP Equity & Bond Fund – Regular Plan – Growth | 26.3 | -1.31 | 44.84 | 4.54 | 7.55 | 27.61 | -4.62 | 14.17 | 16.76 | 22.94 | -2.33 |
| Short Term (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| Axis Short Term Fund – Growth | 10.08 | 7.19 | 9.99 | 8.08 | 9.6 | 5.93 | 6.24 | 9.74 | 10.04 | 3.4 | 3.13 |
| HDFC Short Term Debt Fund – Growth | 10.08 | 8.31 | 10.37 | 8.62 | 9.25 | 6.52 | 6.88 | 9.64 | 10.86 | 3.8 | 2.86 |
| ICICI Prudential Short Term Fund – Growth | 9.54 | 7.09 | 11.53 | 8 | 11 | 5.9 | 5.75 | 9.62 | 10.52 | 3.82 | 4.09 |
| Corporate Bond (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| HDFC Corporate Bond Fund – Growth | 10.49 | 7.38 | 10.9 | 8.53 | 10.59 | 6.51 | 6.38 | 10.38 | 11.68 | 3.82 | 2.68 |
| Sundaram Corporate Bond Fund – Growth | 8.68 | -0.4 | 14.91 | 8.53 | 11.64 | 5.44 | 4.78 | 11.4 | 10.88 | 3.45 | 2.95 |
| Banking and PSU Debt (Core) | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| IDFC Banking & PSU Debt Fund – Regular Plan – Growth | N/A | 7.17 | 9.22 | 8.51 | 7.97 | 5.5 | 7.25 | 11.22 | 10.81 | 3.33 | 2.95 |
| Kotak Banking and PSU Debt Fund – Growth | 7.63 | 9.67 | 9.49 | 8.53 | 9.9 | 6.17 | 6.62 | 10.91 | 10.41 | 3.88 | 3.08 |
| Nippon India Banking & PSU Debt Fund – Regular Plan – Growth | N/A | N/A | N/A | 5.61 | 10.13 | 5.96 | 6.33 | 10.57 | 10.83 | 3.75 | 2.58 |
| Index Funds/ETFs | 2012 (%) | 2013 (%) | 2014 (%) | 2015 (%) | 2016 (%) | 2017 (%) | 2018 (%) | 2019 (%) | 2020 (%) | 2021 (%) | YTD (%) |
| ICICI Prudential Nifty Next 50 Index Fund – Growth | 44.86 | 4.25 | 43.03 | 5.88 | 6.61 | 45.67 | -8.56 | 1.45 | 14.16 | 26.55 | 1.02 |
| Motilal Oswal Nasdaq 100 ETF (MOSt Shares NASDAQ 100) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 30.85 | -21.65 |
| Nippon India ETF Gold BeES | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 25.48 | -5.45 | 8.35 |
| Nippon India ETF Nifty 50 BeES | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 15.64 | 24.1 | 6.59 |
| UTI Nifty 50 Index Fund – Growth | 28.32 | 6.05 | 31.82 | -3.36 | 3.79 | 29.68 | 5.2 | 13.56 | 15.37 | 23.79 | 6.31 |
Video on Best Mutual Funds 2023
The video by YouTuber Pranjal Kamra lists the best mutual funds for SIP in 2023 from top mutual funds in India 2023. So if you want to know the best & top performing mutual funds to invest, then this video will help you pick your perfect mutual fund.
Mistakes that Mutual Funds Investors Make
There’s no such thing as a perfect mutual fund or stock or perfect investing/trading strategy. Everyone follows his own style. I have mine and you have yours (create one if you don’t). What matters is consistency and what you can control. Mistakes that Mutual Fund investors have
- Impulse buying and panic selling: herd mentality, which involves blindly following what other investors are doing, without taking an objective view of why you are buying or selling a particular mutual fund. Chasing only the past performance of funds is not a wise move
- Not understanding the fund: It is important to know the fund type, exit load, historical returns, asset size, expense ratio, etc., along with having a fair idea about your risk-return profile before investing your hard-earned money in any mutual fund scheme
- Have high expectations: Do not have unrealistic expectations about high returns on investments
- Making comparisons: They compare how much return on investment the funds have given without considering whether the funds belong to the same category or have different aspects.Comparing the performance of different funds is like comparing apples with oranges
- Too many funds: many people invest in too many funds. However, having a large number of funds increases the chances of having many underperforming funds in your portfolio, and investing in too many funds will not ensure high returns.
- Not monitoring your portfolio periodically: You need to review the performance of your portfolio timely to keep them aligned with your financial goals and weed out losers from winners
Do remember that you can never go wrong with an SIP. Start small and build your journey thereon.
