Mutual Funds are also called professionally managed investment schemes. They represent a pool of funds which are professionally managed by expert Mutual Fund managers. The fund managers tend to keep a record of the performance and growth of these funds and make required changes so that the funds perform well and the investors receive the best returns possible.
Mutual Funds are managed and controlled by an Asset Management Company which collects funds from a group of investors and invest these funds in bonds and stocks. When you purchase units of a Mutual Fund, these units represents the holdings of your share in a certain fund scheme. Equity Mutual Funds are considered best for long term investments.
So, before we move further to know about the top equity mutual funds, I would like to brief you about certain qualitative and quantitative factors that will help you to easily measure— if a particular equity fund is worth investing or not. Hence, we should look for:
- A good fund manager. Take a thorough survey through the performance of the funds managed by the particular fund manager, especially during the tough market phases. Going with a fund manager who has been consistent over his career is a preferred choice.
- Reputation of the Fund House. A fund house with a long-standing record, big assets under management, good performing fund etc., is the preferred one to invest in.
- Know the size of the fund. Always go for a fund that is neither too large nor too small in size. While there is no exact definition and relation between the size of the fund, it is said that both too small and too large, can hinder a fund’s performance.
- Give importance to the expense ratio of a fund. In most of the cases, the expense ratio is higher for the schemes which are actively managed than it is for the passively managed schemes (such as index fund or ETFs). As per the SEBI rules, an expense ratio for equity funds are a minimum of 2.5%. However, the expense ratio is a thing which should not supersede the other important factors like fund performance, etc. It is considered better to pay a higher expense ratio in a fund knowing that it will beat it competitors by a good margin.
Best Equity Mutual Funds in India
1. Best ELSS Funds
Birla Sun Life Tax Plan
DSP BlackRock Tax Saver Plan
Reliance Tax Saver Fund
Franklin India Taxshield Fund
Principal Tax Savings Fund
2. Best Large Cap Funds
Birla Sun Life Top 100 Fund Growth
Franklin India Bluechip Fund Growth
Kotak Select Focus Fund
BNP Paribas Equity Fund
ICICI Pru Top 100 Fund
3. Best Mid and Small Cap Funds
Axis Midcap Fund
Reliance Midcap & Smallcap Fund
ICICI Pru Midcap Fund
DSP BlackRock Small & Mid Cap Fund
Reliance Small Cap Fund
4. Best Sector Funds
SBI Pharma Fund
Reliance Banking Fund
Birla SL India GenNext Fund
L&T Infrastructure Fund
Franklin Infotech Fund
5. Best Diversified Funds
Birla Sun Life Equity Fund
ICICI Prudential Value Discovery Fund
L&T India Value Fund
Principal Emerging Bluechip Fund
BNP Paribas Dividend Yield
6. Best Balanced Funds
HDFC Balanced Fund
L&T India Prudence Fund
Birla SL Balanced’95 Fund
Franklin India Balanced Fund
Tata Balanced Fund
Many people consider equity as a very risky investment, but while there is a high risk in equities, it’s also important to understand that the risk & reward go hand-in-hand. A high-risk investment can give you better returns in the long run. So, make a thorough analysis of the above-mentioned factors of a fund and do invest in the best equity mutual funds!