A mutual fund is an investment vehicle managed by a professional fund manager, who invests money collected from a group of investors, with similar goals, into different asset classes, such as equities, bonds, commodities, and money market instruments. It has the potential to generate high returns depending on the fund performance, especially if you stay invested for a sufficiently long time. However, with so many options available, choosing the best mutual funds to buy right now can be challenging. Here, we have prepared a comprehensive list of the best mutual funds to invest in 2023 to make your life easier.
That said, always consider your financial goals, risk tolerance and liquidity requirements while choosing a fund, and consult your financial advisor if required before finalising any investment.
Here is a list of top mutual funds to invest in 2023:
|Name of Fund||Features|
|Axis Bluechip Fund Direct Plan Growth||NAV: ₹46.93|
AUM: ₹35,197.66 Cr
Expense Ratio: 0.56%
|SBI Technology Opportunities Fund – Direct – Growth||NAV: ₹157.84|
AUM: ₹2,740.91 Cr
Expense Ratio: 0.89%
|Quant Small Cap Fund – Direct – Growth||NAV: ₹146.98|
AUM: ₹2,870.43 Cr
Expense Ratio: 0.62%
|Tata Digital India Fund – Direct – Growth||NAV: ₹35.99|
AUM: ₹6,463.67 Cr
Expense Ratio: 0.32%
|ICICI Prudential Technology Fund – Direct – Growth||NAV: ₹147|
AUM: ₹8,794.16 Cr
Expense Ratio: 0.89%
|Aditya Birla Sun Life Digital India Fund Direct Growth||NAV: ₹130.14|
AUM: ₹3,244.21 Cr
Expense Ratio: 0.89%
|Mirae Asset Tax Saver Fund – Direct – Growth||NAV: ₹33.39|
AUM: ₹14,020.27 Cr
Expense Ratio: 0.57%
|Aditya Birla Sun Life Medium Term Direct Plan-Growth||NAV: ₹33.94|
AUM: ₹1,646.65 Cr
Expense Ratio: 0.81%
|Navi Nifty Midcap 150 Index Fund Direct Growth||NAV: ₹10.78|
AUM: ₹25.26 Cr
Expense Ratio: 0.11%
|SBI Equity Hybrid Fund Direct Plan Growth||NAV: ₹214.90|
AUM: ₹56,709.94 Cr
Expense Ratio: 0.79%
|ICICI Prudential Asset Allocator Fund of Fund Growth||NAV: ₹90.65|
AUM: ₹18,159.83 Cr
Expense Ratio: 0.18%
|Mirae Asset Large Cap Fund Direct Growth||NAV: ₹84.58|
AUM: ₹34,194.26 Cr
Expense Ratio: 0.53%
|Navi Nifty 50 Index Fund Direct Growth||NAV: ₹11.02|
AUM: ₹664.73 Cr
Expense Ratio: 0.06%
|HDFC Index S&P BSE Sensex Direct Plan Growth||NAV: ₹544.93|
AUM: ₹4,141.51 Cr
Expense Ratio: 0.2%
|SBI Small Cap Fund Direct Growth||NAV: ₹122.87|
AUM: ₹15,348.09 Cr
Expense Ratio: 0.71%
|Parag Parikh Tax Saver Fund Direct Growth||NAV: ₹20.77|
AUM: ₹941.56 Cr
Expense Ratio: 0.82%
|Canara Robeco Small Cap Fund Direct Growth||NAV: ₹25.20|
AUM: ₹4,567.76 Cr
Expense Ratio: 0.41%
|Quant Infrastructure Fund – Direct – Growth||NAV: ₹22.91|
AUM: ₹853.83 Cr
Expense Ratio: 0.64%
|Navi Nifty Bank Index Fund||NAV: ₹10.41|
AUM: ₹77.83 Cr
Expense Ratio: 0.10%
|UTI Flexi Cap Fund Direct Growth||NAV: ₹235.82|
AUM: ₹24,929.40 Cr
Expense Ratio: 0.89%
The fund manager of a mutual fund scheme invests the pooled money in a variety of assets, such as stocks, bonds, debt instruments, and money market vehicles. Besides, getting a chance to maximise their profit margins, a mutual fund investor also benefits from a fund’s diversification – a strategy used by investors to manage risks.
The portfolio and the investment strategy of any of the best performing mutual fund schemes in India is decided as per the corporate policies of the fund house, the objectives stated in the offer document, and the investment style of the fund manager. In fact, one of the key responsibilities of a fund manager, apart from managing your fund on a daily basis, is portfolio rebalancing i.e. deciding the allocation weightage for individual assets.
An important point to note is that mutual fund investors don’t get direct ownership of the assets the fund invests in. The price of each mutual fund unit is called Net Asset Value (NAV). The number of fund units you own will depend on the fund’s NAV.
Here is a detailed overview and performance of the top mutual funds to invest now:
This fund invests 87.41% of its corpus in equities, with over 72% in large cap stocks. It also has a 12.7% exposure to debt securities. Financial services gets the maximum weightage of over 43% in terms of sectoral allocation. The portfolio currently consists of 40 stocks, including ICICI Bank Ltd.. HDFC Bank Ltd., and Bajaj Finance Ltd.. Going by past performance and growth potential, it is considered to be one of the best mutual funds to invest in for the long term:
This fund is currently invested in 18 top domestic and US technology stocks, such as Infosys, TCS, Bharti Airtel, HCL Technologies Ltd., Netflix and Wipro among others. Almost 91% of the portfolio is equities, while the rest is cash. This is a thematic fund focussing on the technology sector. It has been one of the high-return mutual funds, considering its performance over the last 3 and 5 years. The following are some important details:
This fund aims to generate long-term wealth by leveraging the growth potential of small cap companies. It tracks the performance of the Nifty Small Cap 250 index. 95.3% of the fund corpus is invested in small cap stocks, within the balance in cash. In terms of sectoral allocation, consumer staples and financial services take the top two positions. It is one of the top mutual funds in India, going by its performance over the past few years. Here are some important details:
80% of the total assets owned and managed by this scheme is invested in India’s top IT and technology stocks. The fund seeks capital appreciation on a long-term basis and has 33 equities in its portfolio. It has been one of the best performing mutual funds in India, if you consider its returns over the last 3 to 5 years. Here are some important details:
The primary goal of the fund, as stated in its offer document, is wealth creation by investing in technology companies and other companies that are heavily reliant on technology. Of the 48 securities the fund has invested in, 96.2% are equities. In terms of weightage, technology forms 80% of the fund’s portfolio. Some important details include:
This fund was formed on 16 January, 2000 and is currently managed by Kunal Sangoi and Dhawal Joshi. 98.5% of the total corpus of this fund is invested in equities, with 82.4% allocated to technology, 8.4% allocated to services, and 6.3% allocated to communication. Over the last 3 and 5 years, it has delivered high annualised returns, making it one of the top performing mutual funds, during the period. Some of the important details are as follows:
This open-ended equity equity-linked savings scheme (ELSS) offers the dual benefit of wealth generation and tax deduction benefits up to ₹1.5 lakh under Section 80C of the I-T Act. It has a standard lock-in period of 3 years like all other ELSS funds. With its value-investing approach, it gives you exposure to growth-oriented businesses, such as HDFC, Reliance Industries and ICICI Bank to name a few. Here are some interesting details about the scheme:
Launched on 25 March, 2009, this mutual fund invests primarily in debt and money market instruments. It is suitable for investors looking for capital growth in the medium term. This fund invests in sovereign bonds, state development loans (SDL) bonds, a number of debentures, and commercial papers. Some important details are:
Being a technology-backed passively managed fund that tracks the Nifty Midcap 150 Index, it is transparent, low-cost, and simple. It also has a very low tracking error of 0.004 since there is very little human intervention. In terms of sectoral allocation, financial services has the highest weightage while energy has the lowest. By staying invested in this fund for sufficiently long, you could expect to maximise the profit margin of your investment portfolio in line with its underlying index. Some important details are:
Launched on 31 December, 1995, this fund is suitable for investors looking for capital appreciation in the long run. It is an open-ended fund that invests in a balanced mix of equity and debt instruments. According to the current holding pattern, the fund has invested over 74% of its corpus in stocks and the rest in fixed-income schemes. The following are some details you need to know:
It’s a fund of funds (FoF) scheme that is suitable for investors, who want to grow wealth over a period of time with the help of portfolio diversification and an investment style that mirrors the underlying schemes of this fund of funds. This FoF invests in 21 different ICICI mutual funds that offer instant diversification and steady growth potential, in line with the performance of the underlying schemes. Some essential scheme-related details are:
It’s an open-ended equity fund that invests more than 80% of its available money in stocks of the top 100 companies by market capitalisation. It aims to deliver consistent high growth with some risk diversification achieved by investing across a wide range of themes and sectors. This scheme invests in a number of sector leaders across sectors, such as financial services, healthcare, technology, automobile, and construction among others.
If you’re an investor who wants capital appreciation in the long term and returns in line with that of the Nifty 50 Index, this fund is for you. Thanks to the use of advanced technology, the tracking error of this fund is extremely low at just 0.001. It is also affordable and transparent. Here are some fund details that you should be aware of:
This index fund replicates the portfolio composition and individual asset weightage allocation of S&P BSE Sensex index. Since its inception on 17th July, 2002, the fund has delivered an average return of 12.6% p.a. In terms of sectors, the fund has maximum exposure to financial services, followed by technology. Some important details are:
This mutual fund predominantly invests in a diversified portfolio of small cap stocks with high growth potential. The fund currently holds 53 top small cap companies in its basket. Some of the most well-known names are Finolex Industries, Lemon Tree Hotels, Star Cement, and Engineers India Ltd. For further diversification, this scheme also invests a portion of the corpus in a variety of large- and mid-cap stocks, debt instruments, and money market instruments.
This fund aims to generate long-term capital by investing at least 80% of the corpus in equity and equity-related instruments. Being an ELSS, it comes with a lock-in period of 3 years. However, in addition to generating long-term wealth, it can also help you maximise your tax savings under Section 80C of the I-T Act, 1961. Further, this fund uses value investing strategies to invest across sectors, themes, and market capitalisations. Some essential details are:
This open-ended equity scheme primarily invests in small cap stocks with high growth potential with the aim of generating long-term wealth. As per the current asset allocation, a little over 95% of the corpus is invested in equities. By sectoral allocation, services and finance occupy the top two positions. Since inception, the fund has delivered CAGR returns of 25.7%. Some important details are:
This open-ended fund invests heavily in stocks of top infrastructure companies in the country. The 3-year, 5-year, and 10-year returns delivered by it are higher than the category average, making it one of the top mutual funds. To balance risks associated with equity investing, the fund manager can decide to invest a portion in debt at any given point of time. This investment scheme may be suitable for investors looking for long-term capital appreciation.
This passively managed index fund closely replicates the performance, composition, and individual asset allocation weightage of the Nifty Bank Index. It has the lowest tracking error of 0.003 among all other index funds tracking the Nifty Bank Index. It currently holds 12 banks with high growth potential in its portfolio. Here are some interesting details about the fund:
Launched on 18th May, 1992, this flexicap fund was designed to leverage the growth potential of a rising market and mitigate risks during a volatile market. It is suitable for investors, who have a high risk appetite, and can stay invested over a sufficiently long time. It can also offer investors diversification over a wide spectrum of market capitalisation. Based on sectoral allocation, the fund has the highest exposure to financial services and the lowest exposure to automobiles. Some interesting points to note about the fund are:
*Data taken from respective AMC websites on March 1, 2023. Data for illustrative purposes only. Past performance is no guarantee of future returns.
Disclaimer: Mutual fund investments are subject to market risks, read all offer documents carefully.
There are are several ways to invest in top-performing mutual funds in India:
Whenever a new mutual fund is launched, it’s termed as New Fund Offer or NFO. You can subscribe to the scheme at a discounted rate during the NFO period, which usually lasts for two weeks. You can invest directly on the app or website of the AMC or one of its distributors.
Visit the website, download the app, or check the offline channels for investing with your preferred AMC. Based on your long-term financial goals, risk tolerance, tax position, and investing principles, choose a fund that’s suitable.
Instead of directly investing in a mutual fund through a channel offered by its issuing AMC, you can also avail of the investment channels provided by brokers, distributors, and aggregator websites. They not only give you a platform to invest, but also sound financial advice. However, you may have to pay extra to access these facilities.
You’re all set. Within some time of your payment, mutual fund units will be allocated to you. The app/website dashboard will show the fund’s NAV, AUM, number of units allocated, and other relevant information.
Did You Know?
Had you invested ₹10,000 in the UTI Flexi Cap Fund, you would have received ₹10,128 after 1 year, ₹15,655.67 after 3 years, and ₹16,315.43 after 5 years, based on Nifty 500 Total Return Index (TRI), as on 31st March, 2023. You may also be interested to know that ₹10,000 invested on the day of inception, would have fetched you ₹2,93,183.635, as on 31st March, 2023.
Here are a list of benefits of investing in mutual funds:
Almost all mutual funds are extremely liquid. This means you can redeem your units and exit the fund at any time. Once redeemed, the redemption amount is usually credited to your bank account within a few days (just 1 day in case of Navi). However, please note that ELSS funds will have a mandatory lock-in period of 3 years. Also, most funds will have an exit load, so be mindful of that.
Since mutual funds invest in a variety of asset classes and different securities within the same asset class, it offers diversification – a useful defence mechanism against uncertain market forces.
Most mutual funds are easy to invest in because you can pick and choose an investment option that suits you. Some popular ways of investing are Systematic Investment Plans (SIPs), Systematic Withdrawal Plans (SWPs), Systematic Transfer Plans (STPs), and lumpsum. Moreover, you can conveniently start you investment journey by downloading the app of your preferred AMC or aggregator anywhere, anytime.
Mutual funds are regulated under the Securities and Exchange Board of India (SEBI) (Mutual Funds) Regulations, 1996. This creates fair value practices in the market, and weaves in a factor of safety into your investment. However, please note that mutual fund investments are subject to market risks, read all scheme-related documents carefully before investing.
Mutual funds usually have a low expense ratio. An expense ratio is the operating expenses incurred by the fund, expressed as a percentage of the scheme’s daily net assets. Due to asset diversification, mutual funds can lower their operating and marketing expenses, which is passed on to the investors.
Mutual Funds are managed by professional fund managers with specialised financial knowledge and skill sets. They not only track the price fluctatuations of the individual assets in the portfolio, but also decide on the composition and asset allocation weightage, depending on price fluctuations and market movements. This is what makes mutual funds are a great investment vehicle for even new investors, who may not have sufficient knowledge about individual asset classes, sectors, and securities.
You need to consider the following factors before choosing the best mutual funds for your needs:
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.
A mutual fund’s expense ratio adds up to the total cost of the fund. A scheme with an extremely high expense ratio could eat into the returns of the fund. On the other hand, funds with lower expense ratios are better positioned to deliver higher returns for the investors.
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 that has delivered consistent returns over a long duration could be a safer bet than a scheme that is less stable.
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.
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.
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.
The higher the AUM, the more money the fund has to invest and potentially generate higher 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.
Returns or profits made on mutual fund investments are taxable. So, before investing, understand your tax obligations clearly.
The rate of tax on capital gains will depend on the duration of investment and the type of mutual fund as follows:
|Type||Short-Term Capital Gains (STCG) Duration||Long-Term Capital Gains (LTCG) Duration||STCG Rate||LTCG Rate|
|Equity||Less than 1 year||1 year and more||15%||10%, on gains above ₹1 Lakh|
|Debt||Less than 3 years||3 years and more||Depends on your income tax slab||20%|
|Hybrid equity||Less than 1 year||1 year and more||15%||10%, on gains above ₹1 Lakh|
|Hybrid debt||Less than 3 years||3 years and more||Depends on your income tax slab||20%|
In addition, cess and surcharge will be levied at the applicable rate.
The amendment made under the Finance Act, 2020 ensured that AMCs can no longer deduct a Dividend Distribution Tax (DDT) on your dividend income from the fund. However, your income will be taxed at your peak income tax slab rate.
Moreover, an AMC will deduct a TDS of 10%, if your dividend income from the scheme exceeds ₹5,000 in a year, which you can then claim back when filing your tax returns.
At the time of purchase of a mutual fund scheme, you’ll also have to pay a stamp duty at 0.005% of the total purchase value.
Did You Know?
Stamp duty was introduced, based on government order, from 1st July 2020. It was not levied on mutual fund investments before that.
Looking for the best mutual funds to invest now? Well, your choice should be aligned with your long-term financial goals, risk tolerance, current financial situation and liabilities, tax position, and in view of your existing investment portfolio, if you have one. Do your research thoroughly and read the scheme-related documents carefully. If you are still unsure, reach out to a financial advisor.
However, if you want a little taste of investing in the best mutual funds, consider investing in Navi Mutual Fund at just ₹10.
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.
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.
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.
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.
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.
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.
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.
Looking for the best mutual fund to invest now? Well, you may not be able to find just one. That’s because your selection should depend on your financial goals, risk appetite, investment style, values, and what your expectations are.
Purely from the potential of generating long-term, risk-adjusted returns, mutual funds may be a safe bet. However, your choice should be based on the time you choose to stay invested in, the type of assets or sectors you want to target, the level of risk you’re willing to take, how well you have managed to balance your risks, and many other factors.
There are many top mutual funds in India. One example is Navi Nifty Bank Index Fund, which mirrors the performance of Nifty Bank Index. It is passively managed, low-cost, transparent, and could help maximise the profit margin of your portfolio, in line with the performance of the benchmark index.
To invest in a mutual fund, you could either download the app of an AMC or an aggregator. Choose a fund, based on your current financial situation, risk tolerance, and objectives. You could start investing with a small amount, through the SIP or lumpsum route and then increase your contribution, once you know more about the fund, the assets it invests in, and the market in general. If you are still not sure where or how to begin, reach out to a financial advisor.
The number of units allocated would depend on the Net Asset Value (NAV) of the fund your are investing in, on that particular day. Just like daily stock price fluctuations, NAVs too change frequently.
Most mutual funds don’t have a lock-in period. However, depending on how soon you are redeeming from the time of allocation and the percentage of units redeemed, some AMCs charge a fee, called an exit load. Check your scheme documents to know more.
Mutual fund investments are generally not tax-free. Refer to the tax section of this page to know more. But, with an ELSS fund, you can enjoy tax benefits of up to ₹46,800 per year under Section 80C of the I-T Act, 1961.
To withdraw money, you will need to redeem i.e. sell all or some mutual fund units held by you. However, before you do, check the exit load and other charges applicable on your redemption.
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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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