35 Best Mutual Funds to Invest in India in 2023
Mutual funds have the potential to provide better returns compared to bank fixed deposits. However, with so many mutual fund schemes available across various categories and sectors, it could become a bit difficult to pick funds that match your investment objectives. To make it easier for you, we have handpicked a list of best mutual funds across categories based on asset class and investment goals. Let’s check out the top performing mutual funds that you consider in your portfolio in 2023.
Best Mutual Funds to Invest in India
For your benefit, we have sub-categorised mutual fund schemes based on asset classes and investment mode.
1. 7 Best Performing Equity Mutual Funds in 2023
Equity funds invest most of the investment corpus in company shares and stocks. These funds carry higher risk than debt funds but also have the potential to generate higher returns. Given below are the top 7 performing equity funds in 2023 that you could consider.
| Name of Funds | NAV | AUM | Expense Ratio | 5-Year Returns |
| Navi Nifty Bank Index Fund | ₹10.88 | ₹58.38 Cr | 0.1% | Check on the Navi app |
| Quant Small Cap Fund – Direct – Growth | ₹154.09 | ₹2870.43 Cr | 0.62% | 24.40% |
| Tata Digital India Fund – Direct – Growth | ₹35.20 | ₹6463.67 Cr | 0.31% | 23.74% |
| ICICI Prudential Technology Fund – Direct – Growth | ₹144.98 | ₹8794.16 Cr | 0.88% | 23.36% |
| Quant Tax Plan – Direct – Growth | ₹266.17 | ₹2506.48 Cr | 0.57% | 22.05% |
| SBI Technology Opportunities Fund – Direct – Growth | ₹154.11 | ₹2740.91 Cr | 0.9% | 22.97% |
| Quant Infrastructure Fund – Direct – Growth | ₹25.39 | ₹853.53 Cr | 0.64% | 20.59% |
Data as of 13 January 2023
2. 7 Best Performing Debt Mutual Funds in 2023
Debt funds invest a majority of their corpus in Government bonds, securities and other money market instruments. These funds carry a lower degree of risk than equity funds. However, the returns are usually on the lower side. Given below is a list of top performing debt funds in 2023.
| Name of Funds | NAV | AUM | Expense Ratio | 5-Year Returns |
| Aditya Birla Sun Life Banking & PSU Debt Fund- Direct Plan- Growth | ₹314.04 | ₹8030.05 Cr | 0.35% | 7.28% |
| Canara Robeco Banking and PSU Debt Fund- Direct- Growth | ₹10.17 | ₹394.84 Cr | 0.43% | – |
| DSP Banking & PSU Debt Fund- Direct Plan- Growth | ₹20.52 | ₹2508.10 Cr | 0.32% | 6.95% |
| IDFC G-Sec Fund – Constant Maturity Plan – Direct – Growth | ₹37.51 | ₹215.29 Cr | 0.49% | 17.12% |
| ICICI Prudential Credit Risk – Direct – Growth | ₹28.31 | ₹7866 Cr | 0.86% | 8.19% |
| Nippon India Gilt Securities Fund – Direct – Growth | ₹35.08 | ₹1143.68 Cr | 0.63% | 18.53% |
| ICICI Prudential All Season Bond Fund – Direct – Growth | ₹32.29 | ₹6264.50 Cr | 0.62% | 8.16% |
Data as of 13 January 2023
3. 7 Best Performing Tax-Saving Mutual Funds in 2023
Investing in ELSS mutual funds or equity-linked savings schemes would allow you claim tax benefits up to Rs.1.5 lakh under section 80C of the Income Tax Act. Let’s check out a few top-performing tax-saving mutual funds.
| Name of Funds | NAV | AUM | Expense Ratio | 5-Year Returns |
| Navi ELSS Tax Saver Fund | ₹20.48 | ₹59.45 Cr | 2.34% | 6.84% |
| Quant Tax Plan – Direct – Growth | ₹266.17 | ₹2506.48 Cr | 0.57% | 22.05% |
| Kotak Tax Saver Fund – Direct – Growth | ₹76.38 | ₹3161.09 Cr | 2.06% | 11.87% |
| Mirae Asset Tax Saver Fund – Direct – Growth | ₹34.46 | ₹14020.27 Cr | 0.55% | 14% |
| DSP Tax Saver Fund – Regular – Growth | ₹84.14 | ₹10444.91 Cr | 1.75% | 14.28% |
| Canara Robeco Equity Tax Saver Fund – Regular – Growth | ₹116.32 | ₹4562.79 Cr | 1.98% | 13.98% |
| Baroda BNP Paribas ELSS Fund – Regular – Growth | ₹58.09 | ₹681.28 Cr | 2.32% | 7.68% |
Data as of 13 January 2023
4. 7 Best Hybrid Funds in 2023
Hybrid funds invest in both equity and debt instruments. These funds aim to provide a balance to investors’ portfolios while giving them exposure to both stocks and bonds. Check out our list of top performing hybrid funds in 2023.
| Name of Funds | NAV | AUM | Expense Ratio | 5-Year Returns |
| Quant Multi Asset Fund – Growth | ₹88.55 | ₹530.01 Cr | 2.31% | 20.64% |
| Kotak Multi Asset Allocator FoF – Direct – Growth | ₹159.5 | ₹747.19 Cr | 0.13% | 15.73% |
| ICICI Prudential Equity & Debt Fund- Direct – Growth | ₹239.99 | ₹21281.62 Cr | 1.78% | 12.75% |
| Baroda BNP Paribas Aggressive Hybrid Fund – Direct – Growth | ₹20.70 | ₹787.69 Cr | 0.6% | 12.77% |
| Kotak Equity & Hybrid Fund- Direct – Growth | ₹47.32 | ₹3209.48 Cr | 0.59% | 12.02% |
| Quant Absolute Fund – Direct – Growth | ₹307.26 | ₹949.6 Cr | 2.31% | 17.46% |
| Edelweiss Aggressive Hybrid Fund – Direct – Growth | ₹44.69 | ₹431.63 Cr | 0.51% | 12.03% |
Data as of 13 January 2023
5. 7 Best Mutual Funds for SIP Investments in 2023
You can invest monthly or quarterly via SIPs (Systematic Investment Plan) monthly. SIPs offer flexibility and bring discipline in an investor’s routine, especially if they are starting out. Check out our list of 7 best mutual funds for SIP investments.
| Name of Funds | NAV | AUM | Expense Ratio | 5-Year Returns |
| Navi Nifty 50 Index Fund | ₹11.36 | Rs.620.74 Cr | 0.06% | -– |
| Quant Tax Plan – Direct – Growth | ₹266.17 | ₹2506.48 Cr | 0.57% | 22.05% |
| Baroda BNP Paribas Aggressive Hybrid Fund – Direct – Growth | ₹20.70 | ₹787.69 Cr | 0.6% | 12.77% |
| HDFC Credit Risk Debt Fund – Direct – Growth | ₹21.31 | ₹8508.28 Cr | 0.96% | 7.73% |
| Axis Bluechip Fund | ₹42.62 | ₹35197.66 Cr | 1.59% | 10.87% |
| ICICI Prudential All Season Bond Fund – Direct – Growth | ₹32.29 | ₹6264.50 Cr | 0.62% | 8.16% |
| Aditya Birla Sun Life Banking & PSU Debt Fund- Direct Plan- Growth | ₹314.04 | ₹8030.05 Cr | 0.35% | 7.28% |
Data as of 13 January 2023
Disclaimer: This table is for reference purpose only and shouldn’t be considered by any means as an advisory to purchase mutual fund schemes. Your investment decision should be based on your investment goals and risk appetite. Consult a professional wealth advisor before taking any decision. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
Also Read
How Do Mutual Funds Work?
NFO is the stepping stone in a mutual fund scheme’s journey. Whenever a new fund is launched, it’s termed as New Fund Offer or NFO. Investors can subscribe to the scheme at a discounted rate during the NFO period, which usually lasts for two weeks. Mutual fund houses use NFO as a mode to onboard new investors and to pool funds.
This corpus is called assets under management or AUM. The fund then invests the corpus in company stocks or debt instruments based on the fund’s objective. Point to note: every scheme has a different investment objective. For instance, an equity mutual fund would invest at least 65% of its corpus in equity shares of companies. Similarly, a debt fund would invest a larger portion of its assets in debt instruments like government securities and bonds. The aim of every mutual fund scheme is to give investors what they are looking for. This is the sole reason why seasoned investors diversify their portfolio – to enjoy high returns at moderate to low risk.
There you can invest in mutual funds via SIP or lump sum.
Advantages of Investing in Mutual Funds
Check out some of its benefits of investing in mutual funds:
- Mutual Funds are managed by professional fund managers with specialised financial knowledge and skill sets.
- Mutual funds allow you to diversify into many different stocks easily and in a cost-effective manner.
- It is easy to buy and redeem units in mutual funds.
- You can choose from a wide variety of mutual funds to invest such as Systematic Investment Plans (SIPs), Systematic Withdrawal Plans (SWPs) and Systematic Transfer Plans (STPs).
- They offer a highly transparent and cost-effective option to invest your money.
- As its policymaker, SEBI regulates the mutual fund industry and lays guidelines to safeguard your interest as an investor.
- They offer diversification or access to a wider variety of investments than an individual investor could afford to buy.
- Monthly contributions help the investor’s assets grow.
- The risk of investing in mutual funds is much less than that of individual stocks.
How to Select the Best Mutual Fund for Your Investment?
You need to consider the following factors before choosing the best mutual funds for your needs:
1. Consider your Investment Goals
Each mutual fund scheme has a different risk level and investment objective. Invest in a fund that’s well aligned with your investment goals and risk tolerance. Even if you want to diversify your portfolio, choose schemes that match your investment objective.
2. Consider Fund’s Expense Ratio or Cost of the Fund
A mutual fund’s expense ratio adds up to the total cost of the fund. This scheme with an extremely high expense ratio could eat into the returns of the fund. Similarly, funds with lower expense ratio could result in higher returns for the investors.
3. Historical Performance of Funds
Though checking a fund’s historical performance shouldn’t be considered as a yardstick for selection of funds by any means, it could give you a fair idea of the fund you’re planning to invest in. For instance, investing in a mutual fund scheme giving consistent returns over the past 5 years or more could be a safer bet than a volatile scheme.
4. Consult with a Financial Advisor
If you’re not sure where to start or need help choosing mutual fund schemes as per your financial goals, consider working with a financial advisor who can help you make informed decisions about your investments.
5. Understand the Fund’s Holdings
Look into the fund’s holdings and check what the fund is actually investing in. This would give you a fair idea whether the holdings are aligned with your investment goals.
6. Direct Plan vs. Regular Plan
Investing in a direct plan means you’re directly buying mutual fund units from the fund house or AMC (Asset Management Company). If you invest in the same scheme via a regular plan, you would see that the expense ratio is higher than the direct plan. That’s because regular plans entail investing via third-party brokers or advisors.
7. Consider Assets Under Management (AUM)
The higher the AUM, the more money the fund has to invest and potentially generate returns for its investors. AUM could also be an indicator of a mutual fund’s size and popularity among investors. A high AUM can indicate that a fund is well-established, which can be a sign of a fund’s strength and stability.
Final Word
Keep your options open while selecting the best schemes, as in, try not to blindly rely on one particular mutual fund scheme. Track the scheme’s performance on a regular basis to gauge whether the scheme is actually helping you reach your financial goals. Consider your investment objectives, goals, and horizon before choosing mutual fund schemes. It’s recommended that you seek advice from a seasoned investment advisor before investing in mutual funds, especially if you’re just starting out on your investment journey.
FAQs
Ans: SBI Small Cap Fund, Kotak Emerging Equity Fund, Axis Bluechip Fund, and UTI Flexi Cap Funds are a few funds you can invest in for the long term.
Ans: There is no proper or best time to invest in mutual funds. However, you can choose to invest when the NAV value of mutual funds is low. This will help maximise your returns.
Ans: Investing through SIP is considered the best way to invest in mutual funds. This is because SIP helps you to build a habit of investing regularly. Also, an investor has to deposit a small amount as SIP periodically.
Ans: The Securities and Exchange Board of India (SEBI) regulates the rules, policies and regulations of mutual funds in India.
Ans: NAV (Net Asset Value) is a measure of the per-share value of a mutual fund. It is calculated by dividing the total value of the fund’s assets (including cash, investments, and any other assets) minus any liabilities, by the number of shares outstanding.
Ans: Fund of Fund (FoF) is a mutual fund that invests in other funds. Here, you can invest in funds rather than directly investing your money in bonds, debentures, stocks and other securities.
Ans: When an investor redeems his funds before the holding period, he/she has to pay a charge called the exit load to their fund houses.
Ans: Yes, since mutual funds are market-linked investments, they can incur losses from time to time. With equity investments, losses are inevitable as stock prices fluctuate continuously.
Ans: Debt funds such as ICICI Prudential Credit Risk Fund Direct Plan-Growth, SBI Magnum Medium Duration Fund Direct- Growth and PSU Debt Fund Direct Growth are some of the best mutual funds to invest in 1 year.
Ans: Having basic market knowledge is advisable to make informed decisions. It will allow you to easily find the best mutual funds for your needs or time your redemptions for maximum returns.
Ans: AUM or Assets Under Management represents the total market value of all the investments managed by a fund or a firm. Understanding AUM could help you get an idea regarding the size and popularity of the fund or firm among investors.
Ans: Expense ratio is the cost that goes towards managing a fund. It adds up to the overall cost of the fund. Regular and actively managed mutual fund schemes usually have a higher expense ratio than direct and passively managed schemes.
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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.
