Financial vehicles such as mutual funds pool the money of various investors and invest them in several money market instruments, stocks, bonds and other securities.
Are you looking to invest in the best mutual funds in India for 2022?
If yes, then you might want to follow a proper guide that shortlists the top-performing schemes. Furthermore, you must know everything about mutual fund investment, including its types, taxation, and more. Read on to know the top 10 performing mutual funds in India.
Also Read: Small Cap vs. Mid Cap vs. Large Cap Funds
|Best Mutual Funds||Features|
|1.||Canara Robeco Flexi Cap Fund – D – (G)||NAV: Rs.245.52 as on 29 October 2021|
Assets Under Management (AUM): Rs.6063 Crore as on 30 September 2021
5-year returns: 19.21% as on 31 October 2021
Expense ratio: 0.55%
|2.||JM Flexi Cap Fund – DP – (G)||NAV: Rs.56.5448 as on 30 September 2021|
Assets Under Management (AUM): Rs.188.52 Crore as on 30 September 2021
5-year returns: 17.24% as on 30 September 2021
Expense ratio: 1.73%
|3.||UTI Flexi Cap Fund – DP – (G)||NAV: Rs.274.9977 as on 30 September 2021|
Assets Under Management (AUM): Rs.23432.31 Crore as on 30 September 2021
5-year returns: 19.15% as on 30 September 2021
Expense ratio: 1.06%
|4.||Navi Nifty 50 Index Fund||NAV: Rs.11.0783 as on 30 September 2021|
Assets Under Management (AUM): Rs.115.65 Crore as on September 2021
3-month returns: 12.40% as on 29 October 2021
Expense ratio: 0.06%
|5.||Axis Bluechip Fund – D – (G)||NAV: Rs.51.92 as on 30 September 2021|
Assets Under Management (AUM): Rs.33,153.71 Crore as on 30 September 2021
5-year returns: 19.64% as on 30 September 2021
Expense ratio: 0.48%
|6.||Axis Long Term Equity – Direct (G)||NAV: Rs.82.8497 as on 30 September 2021|
Assets Under Management (AUM): Rs.34,370.78 Crore as on 30 September 2021
5-year returns: 19.09% as on 30 September 2021
Expense ratio: 0.74%
|7.||BOI AXA Tax Advantage – Direct (G)||NAV: Rs.112.17 as on 30 September 2021|
Assets Under Management (AUM): Rs.517.49 Crore as on 30 September 2021
5-year returns: 20.78% as on 29 October 2021
Expense ratio: 1.65%
|8.||Invesco India Infrastructure – Direct (G)||NAV: Rs.34.49 as on 30 September 2021|
Assets Under Management (AUM): Rs.288.41 Crore as on 30 September 2021
5-year returns: 17.40% as on 30 September 2021
Expense ratio: 1.46%
|9.||SBI Equity Hybrid Fund – Direct (G)||NAV: Rs.213.5735 as on 30 September 2021|
Assets Under Management (AUM): Rs.45,760.11 Crore as on 31 August 2021
5-year returns: 14.48% as on 30 September 2021
Expense ratio: 0.89%
|10.||Mirae Asset STF – Direct (G)||NAV: Rs.13.0641 as on 30 September 2021|
Assets Under Management (AUM): Rs.675.34 Crore as on 31 August 2021
3-year returns: 7.61% as on 30 September 2021
Expense ratio: 0.33%
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Based on investment structure, mutual fund investments are of two types. Let’s check them out!
1. Close-Ended Funds
Close-ended funds have a fixed maturity date and enable investors to enter these schemes only during the initial period or New Fund Offer or NFO period. In case individuals wish to opt out of a close-ended fund before the lock-in period ends, they can sell their units on the stock exchange.
2. Open-Ended Funds
Open-ended funds come without a specified lock-in period allowing investors to withdraw, sell or redeem units any time they prefer.
3. Interval Funds
Interval mutual funds have characteristics of both open-ended and closed-ended funds. As per the discretion of the fund house, they can be purchased or redeemed only at certain intervals.
Further, the top mutual fund investment can be classified into three types based on the asset class they invest in.
Equity funds essentially invest in equity and equity-related securities. The performance of these funds is impacted by price fluctuations in the stock market. Accordingly, they carry high financial risk. That said, these funds have the potential to generate higher returns than other types of mutual fund schemes.
This type of mutual fund invests in fixed income instruments such as bonds, debentures, treasury bills and other debt securities. Such funds are suitable for someone who is risk-averse and is looking to earn stable returns.
As the name suggests, hybrid fund invests in both equity and debt instruments. The proportion of investment in each asset class depends on the objectives that a hybrid fund has been set up to achieve.
Choosing the right mutual fund looks easy, but it cannot be done without sticking to some basic criteria. Let’s look at some criteria to be looked into while making a mutual fund selection.
Before choosing the top mutual funds in India, check out some of its benefits of investing in mutual funds:
Ideally, you might want to consider investing in mutual funds the moment you start earning and saving. To that end, there is no minimum age when you can start investing.
As there are a number of schemes available in the market, one might want to figure out their purpose of investing before entering into any scheme. For instance, if you are someone who prefers growth over a long period by investing, you might want to consider investing early.
1. Risks and Returns
Two things you might want to focus on before investing in mutual funds are your financial goal and risk-taking capacity. Based on these two factors, you can analyse the risk-return profile of each type of mutual fund investment, and select the one that is ideal for you.
2. Growth and Dividend
While investing in mutual funds, you will come across growth and dividend options. In the case of the former, your dividend amount will be reinvested and help you in capital growth. On the other hand, a dividend option will allow you to receive payment in the form of dividends. Nevertheless, remember that mutual fund schemes do not give any guarantee in relation to the amount and frequency of such dividend payments.
3. Direct and Regular Plans
Direct mutual fund investment plan enables you to invest directly through an Asset Management Company (AMC). Nevertheless, by opting for a regular plan, you invest through a financial intermediary (broker/distributor).
4. Lump Sum and SIP
When allocating funds to a mutual fund scheme, you might want to choose a particular investment mode. You may choose to invest the entire amount available with you via the lump sum option. Alternatively, you can invest small amounts at fixed intervals through a Systematic Investment Plan (SIP).
Another essential factor that you must consider when investing in mutual funds is the expense ratio. It refers to the annual fee that asset management companies charge on a yearly basis to cover the costs of running a fund. Such costs include administrative expenses, distribution fees and more.
By choosing funds such as choosing the Navi Nifty 50 Index Fund, investors can allocate their funds to shares of top Indian companies by paying an expense ratio of 0.06% only.
Based on your financial goals, you can also consider investing in any of the various other mutual fund investment schemes offered by Navi Mutual Fund.
Here is a table summarising the taxation of debt and equity funds:
|Profits||Equity Fund Taxation||Debt Fund Taxation|
|Short Term Capital Gains (STCG) Tax||For a holding period of less than 1 year, 15% STCG tax along with 4% cess will be applicable.||In case you redeem your units before the completion of 3 years from the date of purchase, STCG tax will be levied as per your tax slab rate.|
|Long Term Capital Gains (LTCGT) Tax||Selling units after holding them for 1 year will attract 10% LTCG tax and 4% cess if the long term gains are more than Rs.1 lakh. Note that no tax is applicable if long term capital gains do not exceed Rs. 1 lakh.||For a holding period of more than 3 years, 20% LTCGT along with indexation benefits will be applicable.|
Further, investments in Equity Linked Savings Schemes (ELSS) are eligible for tax deduction from your income under Section 80C of the Income Tax Act. The maximum amount eligible for tax deduction is Rs.1.5 lakh.
Also Read: 80C Tax Saving Mutual Funds
Now that you know in detail about mutual fund investments, their types, taxation and more, choosing the best mutual funds from the aforementioned list might get easier for you. In this regard, you can consider AMCs such as Navi Mutual Fund and select any of their mutual fund schemes to fulfill your investment objective.
Ans: Equity Mutual Funds are probably best suited for long term goals. A well-diversified equity fund can give you better returns in the long run. However, equity funds are more volatile than hybrid and debt funds for short-term investment goals. Also, you can look into index funds for steady growth in the long term. Choosing a right fund, which falls in line with your long term goal, would help you survive market fluctuations and give you a desired income in the long run.
Ans: There is no particular time to invest in mutual funds. You can invest whenever you want but then if you invest at a time when the NAV or Net Asset Value is low, it will help you gain maximum returns than the time when NAV is higher. Also, start investing early!
Ans: Investors have two options to invest. Either they invest lump sum or go for systematic investment plan (SIP). SIP helps investors invest their money in a very systematic way and save regularly with minimum risk.
Ans: The Securities and Exchange Board of India (SEBI) regulates mutual funds in India.
Ans: The Net Asset Value or NAV signifies the performance of a particular mutual fund scheme. Simply put, it is the market value of the securities under the scheme.
Ans: A scheme that invests in other mutual fund schemes is known as Funds of Funds (FoF). By choosing to invest in such funds, individuals can mitigate their portfolio risk by spreading their investment across more than one fund.
Ans: Exit Load is a fee that a fund house may impose on investors if they choose to redeem their units before a predetermined period. Note that not all funds may levy an exit load.
Ans: There is some amount of risk associated with mutual funds due to various factors, such as market risk, liquidity risk, concentration risk, and more. Therefore, you can lose money in mutual funds.
Ans: Based on the performance in the last one year and after thorough comparison with the peers, an investor can invest in the best mutual fund of the year across all categories.
Ans: Mutual funds investments are nothing but a means of investing your money in share markets. Some understanding is required to know where your money is going and what are the potential rewards and associated risks.
Disclaimer- Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.