20 Best Equity Mutual Funds in India to Invest in February 2023

Equity funds are mutual funds that primarily invest in stocks and shares of companies across market capitalisation in a bid to offer investors a diversified portfolio and generate capital growth in the long term. Equity funds could be both actively managed and passively managed – example index funds. The best equity mutual funds are those that offer better capital appreciation than other funds due to diversified and strategic asset allocation. 

We have curated a list of the top 20 equity funds that you could consider investing in.

20 Top Equity Mutual Funds in India 2023 – Best Performing

Listed below are the top performing equity mutual funds in India: 

Before we move on, here’s something for you. If you are looking for hassle-free investing, try investing in index funds. Wondering how to select the best index funds? Navi Mutual Fund is home to a wide range of low-cost index funds. Each fund has a distinct objective, so you can explore and choose the fund scheme that suits your goal. Download the Navi app today, explore and start investing!

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

Best Performing Equity Mutual Funds Based on 5-Year Returns – Detailed Overview

1. Quant Small Cap Fund

Quant Small Cap Fund is considered as one of the best equity mutual funds due to its past performance. The primary investment objective of the scheme is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio of small cap companies. Let’s look into the fund details:

• NAV: ₹148.49
• Expense Ratio: 0.62%
• AUM: ₹2870.43
• Type of Fund: Small Cap Equity Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: 5.59%
  • Annualised 3-Year Return: 48.82%
  • Annualised 5-Year Return: 23.60%

2. Quant Tax Plan

Also considered as one of the best-performing equity mutual funds, Quant Tax Plan was first launched in March 2000. It’s an ELSS (Equity-Linked Saving Scheme) fund with a statutory lock-in period of 3 years and tax benefit. The investment objective of the scheme is to generate capital appreciation by investing predominantly in a well-diversified portfolio of Equity Shares with growth potential. Let’s look into the fund details:

• NAV: ₹1230.05
• Expense Ratio: 2.62%
• AUM: ₹2506.48 Cr
• Type of Fund: ELSS
• Minimum Investment Amount: ₹500
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 6.53%
  • Annualised 3-Year Return: 35.73%
  • Annualised 5-Year Return: 20.89%

3. Quant Active Fund

Quant Active Fund is an open-ended equity scheme that was launched in March 2001. The primary investment objective of the scheme is to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio of large cap, mid cap and small cap companies. Let’s look nto the fund details:

• NAV: ₹1230.05
• Expense Ratio: 2.62%
• AUM: ₹2506.48 Cr
• Type of Fund: ELSS
• Minimum Investment Amount: ₹500
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 6.53%
  • Annualised 3-Year Return: 35.73%
  • Annualised 5-Year Return: 20.89%

4. Quant Mid Cap Fund

Considered as one of the best equity funds due to its past performance, Quant Mid Cap Fund is an open-ended equity scheme predominantly investing in mid-cap stocks. The primary investment objective of the scheme is to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio of mid-cap companies. This scheme is ideal for investors with moderate to high risk appetite. Let’s look into the fund details:

• NAV: ₹129.74
• Expense Ratio: 2.68%
• AUM: ₹1329.97 Cr
• Type of Fund: MidCap Equity Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: 13.49%
  • Annualised 3-Year Return: 32.55%
  • Annualised 5-Year Return: 19.43%

5. Motilal Oswal Midcap Fund

Motilal Oswal Midcap Fund is also considered as one of the top 5 equity funds due to its performance. This fund is ideal for investors who want to invest in midcap stocks. The fund invests 65% of total assets in equity and its related securities of mid-cap firms. Let’s check out the fund details:

• NAV: ₹49.60
• Expense Ratio: 2.04%
• AUM: ₹3626.84.97 Cr
• Type of Fund: Midcap Equity Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: 11.62%
  • Annualised 3-Year Return: 21.98%
  • Annualised 5-Year Return: 14.53%

6. Canara Robeco Equity Tax Saver Fund

Canara Robeco Equity Tax Saver Fund is an ELSS scheme that aims to provide long term capital appreciation by predominantly investing in equities. Investors can also claim tax benefits on their investments of up to Rs.1.5 lakh under Section 80C of the income tax act. Let’s check out the fund details: 

• NAV: ₹112.93
• Expense Ratio: 1.98%
• AUM: ₹4562.84 Cr
• Type of Fund: ELSS Fund
• Minimum Investment Amount: ₹500
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 0.05%
  • Annualised 3-Year Return: 19.11%
  • Annualised 5-Year Return: 14.33%

7. ICICI Prudential Value Discovery Fund

This fund has 87.01% investment in domestic equities of which 62.61% is in large cap stocks, 10.22% is in mid cap stocks, 5.57% in small cap stocks. The fund has 1.01% investment in debt, of which 1.01% in Government securities. The scheme is suitable for Investors who have advanced knowledge of macro trends and prefer to take selective bets for higher returns compared to other equity funds. Let’s look into the scheme details:

• NAV: ₹276.74
• Expense Ratio: 1.73%
• AUM: ₹27515.18 Cr
• Type of Fund: Equity Fund
• Minimum Investment Amount: ₹1,000
• Minimum SIP: ₹100
• Returns:
  • Annualised 1-Year Return: 11.95%
  • Annualised 3-Year Return: 24.46%
  • Annualised 5-Year Return: 13.59%

8. Quant Large and Mid Cap Fund

The primary investment objective of the scheme is to generate capital growth and provide long-term growth opportunities by investing in a portfolio of large-cap and mid-cap companies. Here are the scheme details:

• NAV: ₹71.19
• Expense Ratio: 2.31%
• AUM: ₹548.66 Cr
• Type of Fund: Large and Mid Cap Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: 11.64%
  • Annualised 3-Year Return: 23.29%
  • Annualised 5-Year Return: 13.58%

9. Canara Robeco Blue Chip Equity Fund

Launched in August 2010, this is an open-ended equity scheme predominantly investing in large cap stocks. Launched in August 2010, the scheme aims to provide capital appreciation by predominantly investing in companies having a large market capitalisation. Let’s look into the scheme details:

• NAV: ₹40.87
• Expense Ratio: 1.87%
• AUM: ₹8666.25 Cr
• Type of Fund: Large Cap Equity Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: 1.29%
  • Annualised 3-Year Return: 15.63%
  • Annualised 5-Year Return: 13.45%

10. SBI Contra Fund

SBI Contra Fund aims to provide investors with opportunities for long-term capital appreciation through an active management of investments following a contrarian investment strategy. The fund invests minimum of 65% in stocks of companies which follow the contrarian investment theme. SBI Contra Fund has the flexibility to invest up to 35% in other equities and/or debt or money market instruments. Let’s look into the scheme details:

• NAV: ₹223.82
• Expense Ratio: 1.92%
• AUM: ₹7635.09 Cr
• Type of Fund: Contra Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 12.88%
  • Annualised 3-Year Return: 28.58%
  • Annualised 5-Year Return: 13.06%

11. Canara Robeco Flexi Cap Fund

Canara Robeco Flexi Cap Fund is a multi-cap mutual fund scheme from Canara Robeco Mutual Fund. This fund was launched on 1st January 2023 and has 95.83% investment in domestic equities.

• NAV: ₹218.15
• Expense Ratio: 1.80%
• AUM: ₹8729.58 Cr
• Type of Fund: Multi-cap Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: -1.11%
  • Annualised 3-Year Return: 16.04%
  • Annualised 5-Year Return: 12.64%

12. Invesco India Infrastructure Fund

This is a sectoral fund and is ideal for investors who have prior knowledge of India’s infrastructural growth. The fund has 97.24% investment in domestic equities. Here are the fund details:

• NAV: ₹31.64
• Expense Ratio: 2.48%
• AUM: ₹440.40 Cr
• Type of Fund: Sectoral Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹1,000
• Returns:
  • Annualised 1-Year Return: 3.70%
  • Annualised 3-Year Return: 20.91%
  • Annualised 5-Year Return: 11.93%

13. ICICI Prudential Large and Mid Cap Fund

This scheme is suitable for investors who want to invest in both large cap and midcap stocks. Investors with moderate to high risk appetite could consider investing in these funds. Let’s look into the fund details:

• NAV: ₹575.06
• Expense Ratio: 2.03%
• AUM: ₹6210.34 Cr
• Type of Fund: Large and Mid Cap Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹100
• Returns:
  • Annualised 1-Year Return: 8.97%
  • Annualised 3-Year Return: 20.18%
  • Annualised 5-Year Return: 11.95%

14. DSP Tax Saver Fund

This is an ELSS scheme that allows you to avail a tax deduction on up to Rs 1.5 lakh annually under Sec 80C of Income Tax Act 1961. The fund invests in established as well as emerging companies across market caps to provide a combination of growth and stability.

• NAV: ₹81.61
• Expense Ratio: 1.75%
• AUM: ₹10444.91 Cr
• Type of Fund: ELSS Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹100
• Returns:
  • Annualised 1-Year Return: 2.50%
  • Annualised 3-Year Return: 16.76%
  • Annualised 5-Year Return: 11.63%

15. IDFC Tax Advantage (ELSS) Fund

This is an open-ended equity-linked saving scheme with a statutory lock-in of 3 years and tax benefits of up to Rs.1.5 lakh under Section 80C of teh Income Tax Act.This fund is ideal for investors looking for an investment avenue that would help them  save tax while getting exposure to the equity market. Here are the fund details:

• NAV: ₹98.58
• Expense Ratio: 2.01%
• AUM: ₹4025.95 Cr
• Type of Fund: ELSS Fund
• Minimum Investment Amount: ₹500
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 2.85%
  • Annualised 3-Year Return: 21.47%
  • Annualised 5-Year Return: 11.32%

16. HDFC Flexi Cap Fund

It’s an open-ended dynamic equity scheme investing across large cap, mid cap, small cap stocks. The scheme follows an equity strategy to build a portfolio, representing a cross section of companies diversified across major industries, economic sectors and market capitalisation that offer an acceptable risk reward balance. Here are the fund details:

• NAV: ₹1126.31
• Expense Ratio: 1.65%
• AUM: ₹32154.52 Cr
• Type of Fund: Multi Cap Fund
• Minimum Investment Amount: ₹100
• Minimum SIP: ₹100
• Returns:
  • Annualised 1-Year Return: 12.98%
  • Annualised 3-Year Return: 19.57%
  • Annualised 5-Year Return: 11.28%

17. UTI Flexi Cap Fund

This scheme is ideal for investors who wish to build their core equity portfolio holding, that invests in quality businesses that have potential to generate economic value for a long period of time. Here are the scheme details:

• NAV: ₹223.06
• Expense Ratio: 1.69%
• AUM: ₹24929.40 Cr
• Type of Fund: Multi Cap Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 5.64%
  • Annualised 3-Year Return: 16.05%
  • Annualised 5-Year Return: 11.87%

18. JM Flexi Cap Fund

Launched in September 2008, JM Flexi Cap fund is an open ended dynamic equity scheme investing across large cap, mid cap, and small cap stocks. The scheme could be ideal for investors looking for capital appreciation over long term and those who would like to invest predominantly in equity and equity-related securities investing across market capitalisation.

• NAV: ₹223.06
• Expense Ratio: 1.69%
• AUM: ₹24929.40 Cr
• Type of Fund: Multi Cap Fund
• Minimum Investment Amount: ₹5,000
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 5.64%
  • Annualised 3-Year Return: 16.05%
  • Annualised 5-Year Return: 11.87%

19. DSP Flexi Cap Fund

This scheme is DSP’s oldest equity fund with a 24 year+ track record. This fund invests flexibly across carefully selected companies of different sizes- large, mid or small. Let’s look at the fund details:

• NAV: ₹61.97
• Expense Ratio: 1.84%
• AUM: ₹7909.88 Cr
• Type of Fund: Multi Cap Fund
• Minimum Investment Amount: ₹500
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: -2.82%
  • Annualised 3-Year Return: 13.16%
  • Annualised 5-Year Return: 10.22%

20. DSP Equity Opportunities Fund

This fund invests in a prudent mix of established (large sized) as well as emerging (mid sized) companies. It aims to invest close to 70% in companies offering potentially superior risk-reward outcomes & available at valuations providing sufficient margin of safety while ~30% or less is invested in stocks with strong growth & profitability metrics that may not meet the margin of safety criterion.

• NAV: ₹357.31
• Expense Ratio: 1.86%
• AUM: ₹7295.03 Cr
• Type of Fund: Large and Mid Cap Fund
• Minimum Investment Amount: ₹500
• Minimum SIP: ₹500
• Returns:
  • Annualised 1-Year Return: 3.67%
  • Annualised 3-Year Return: 14.94%
  • Annualised 5-Year Return: 10.02%

How Do Equity Mutual Funds Work?

Equity funds invest in equity shares of various companies. When someone invests in an equity fund, he/she becomes part-owner of the company. 

Given below are the important steps related to how equity mutual funds works:

• Equity fund investment depends greatly on the category of the fund. SEBI (Securities and Exchange Board of India) has formulated rules for each of the categories and equity funds need to strictly adhere to these rules.
• After the fund category, the investment universe is decided. Then, the portfolio manager decides on which stocks to pick from this pool of assets. This is where the expertise of the fund manager comes into play. He along with his team analyses the profitability of the company and how it can withstand challenging market situations. Based on this research, investment decisions are taken by the investor. 
• After the investor has purchased these stocks, it is the responsibility of the fund manager to track their performances. If a company does not perform as per initial expectations, they remove the stocks from its portfolio. If a company shows promise, the fund manager advises the investor to invest in them.

Example:

HDFC Flexi Cap Fund has 91.54% investment in domestic equities of which 71.54% is in large cap stocks, 4.48% is in mid cap stocks, 4.93% in small cap stocks.

Benefits of Investing in Best Equity Mutual Funds

Given below are the benefits of investing in equity mutual funds:

1. Diversification: Equity mutual funds are diversified across stocks and sectors. It provides adequate protection against market shocks. 
2. Convenience: Investing in mutual funds is more convenient than buying various stocks. Furthermore, a demat account or brokerage account is not a compulsory requirement, unlike stock investments.
3. Regulation: SEBI regulates and closely monitors every mutual fund. As a result, there is a level of transparency. As per SEBI’s mandate, AMCs need to upload their month-end portfolios, periodic expense ratios and NAVs on their website. 

Who Should Invest in Best Equity Mutual Funds?

Equity savings funds offer highly volatile returns when compared to other mutual fund investment options and are suitable to hold long-term to escape market fluctuations. 

Investors who have a high-risk appetite and wish to generate wealth in the long haul can choose to invest in the best equity mutual funds. 

People having an investment horizon of 5 or more years and willing to invest in high-risk stocks can benefit from the best equity mutual funds.

Also Read

List of Best Value Mutual Funds to Consider in 2023

Equity vs Debt Funds – Which One Should You Invest in?

How to Invest in Best Equity Mutual Funds Online and Offline?

Given below are the online and offline steps to invest in equity mutual funds:

1. Invest in Equity Funds – Online Method

To invest in equity funds online, follow these steps: 

• Step 1: Visit the official website of the Asset Management Company (AMC)
• Step 2: Fill up the application form, upload PAN and Aadhar details and complete eKYC
• Step 3: Invest in a mutual fund scheme with your online bank account

2. Invest in Equity Funds – Offline Method

Given below are the steps to invest in equity mutual funds offline:

• Step 1: Visit the nearest branch of the fund house
• Step 2: Fill up the mutual fund application form with your name, bank details and mobile number
• Step 3: Submit self-attested address/identity proof and passport size photographs and complete the KYC process
• Step 4: Submit the cheque
• Step 5: Don’t forget to collect the PIN and folio number

Investors can also approach a mutual fund distributor for their investments.

How to Choose the Right Equity Mutual Fund?

Given below are the crucial factors that an investor needs to look into while choosing equity mutual funds:

1. Risk Appetite

Investors should base their decisions on the level of risk they are willing to take. The risk level of equity mutual funds varies. 

Mid-cap and small-cap mutual funds are very risky while aggressive hybrid mutual funds are not so. Large-cap funds provide moderate returns at low risk. If the investor wishes to take high risk, he/she should opt for mid-cap and small-cap mutual funds. 

2. Investment Horizon

The choice of a mutual fund depends greatly on the investment horizon of an individual. Equity mutual funds are the best option for long-term goals. For short term goals, one can opt for a debt mutual fund.

3. Expense Ratio

Investors need to choose an equity mutual fund with a low expense ratio. It is the fee that a fund house charges the investor for managing their fund. A fund with a low expense ratio ensures that the investor saves/invests more money.

4. Fund Performance

Investors need to check the consistency in performance and fund managers’ expertise while choosing a mutual fund. 

Taxation on Equity Mutual Funds

When it comes to taxation, equity mutual funds have a dedicated tax structure: 

The capital gains earned on exit within 1 year are treated as Short Term Capital Gains (STCG) and are taxed at 15 percent. 

If an investor holds investments for more than a year, the gains are classified as Long Term Capital Gains (LTCG) and are free if the profits fall under Rs. 1 Lakh, but taxed at 10 percent if the gains exceed Rs. 1 Lakh. 

10 percent TDS (Tax Deducted at Source) is deducted on dividends exceeding Rs.5000 earned. 

Investments made in Equity-linked savings schemes are exempt from taxes up to Rs. 1.5 Lakhs on a lock-in period of 3 years.

Final Word

Equity funds have the potential to generate better returns than debt funds, however, the risks associated are in the higher bracket as well compared to debt funds. To mitigate risk, diversify your portfolio by investing in schemes with diverse asset allocations. Also, select the best equity funds based on your risk tolerance and investment objective. Every investment you make should be aligned to your goals.

FAQs

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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.

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