Best Mutual Funds To Invest In India: Top Picks

Mutual funds are a popular investment option in India, with thousands of funds to choose from. However, selecting the best mutual fund to invest in is not easy. It depends on an investor's risk profile, time horizon, and financial goals.

There are several types of mutual funds, including equity funds, debt funds, and hybrid funds, each with different risk profiles and investment objectives. Equity funds are suitable for long-term goals, while debt funds are better for short-term goals.

When choosing a mutual fund, investors should consider the fund's history, the fund manager's performance, the expense ratio, and the fund's consistency in outperforming the market over the long term.

Some of the best mutual funds in India include Nippon India Small Cap Fund, HDFC Mid-Cap Opportunities Fund, and ICICI Prudential BHARAT 22 FOF Scheme.

Best equity mutual funds

Equity mutual funds are a great investment option for those looking to achieve their financial goals. These funds invest predominantly in equity instruments such as stocks and have the potential to offer the highest returns among all mutual funds. Here are some of the best equity mutual funds in India:

Nippon India Small Cap Fund

This fund has consistently delivered higher returns than its peers and is considered one of the best equity mutual funds in India. It has a five-year annualised return of 36.50%.

HDFC Mid-Cap Opportunities Fund

With a five-year annualised return of around 20%, this fund is another top-performing equity mutual fund. It invests primarily in mid-cap companies, offering investors exposure to this riskier but potentially more rewarding segment of the market.

Nippon India Multi Cap Fund

This fund offers a well-diversified portfolio by investing in a mix of large-cap, mid-cap, and small-cap companies. It has delivered strong returns over the years, making it a popular choice among investors.

ICICI Prudential BHARAT 22 FOF Scheme

The ICICI Prudential BHARAT 22 FOF Scheme is an exchange-traded fund that invests in a basket of 22 stocks across sectors. It aims to provide investors with diversified exposure to the Indian equity market.

Motilal Oswal Flexicap Fund Direct Plan Growth

The Motilal Oswal Flexicap Fund is a flexible equity fund that can invest across large-cap, mid-cap, and small-cap companies. It has delivered strong returns and is considered one of the top-performing equity mutual funds in India.

When selecting an equity mutual fund, it is important to consider factors such as the fund's history, expense ratio, and the performance of the fund manager. It is also crucial to assess your risk tolerance and investment goals before investing.

Best debt mutual funds

Debt mutual funds are a type of mutual fund that invests in fixed-income bonds and securities issued by the government and companies. These funds are considered the least risky type of mutual fund, making them attractive to risk-averse investors. When deciding which debt mutual fund to invest in, it is important to consider factors such as taxes, fund tenure, and the credit quality rating of the fund. Here are some of the best debt mutual funds in India:

Aditya Birla Sun Life Medium Term Plan Direct Growth

This fund has provided annualised returns of 14.46% over the past three years and 10.56% in the last five years. The minimum amount required to invest in this fund via lump sum is ₹1,000, and via SIP is ₹1,000.

HDFC Regular Savings Fund Direct Growth

The HDFC Regular Savings Fund has offered 8.88% annualised returns in the past three years and 8.94% in the last five. To invest in this fund via a lump sum, a minimum of ₹5,000 is required, and via SIP, a minimum of ₹300.

ICICI Prudential Dynamic Bond Direct Plan Growth

With a minimum investment of ₹5,000 for a lump sum and ₹1,000 for SIP, this fund has yielded 8.63% annualised returns in the past three years and 8.38% in the last five.

UTI Medium to Long Duration Fund Direct Growth

To invest in the UTI Medium to Long Duration Fund, a minimum of ₹500 is required for a lump sum, and the same amount for SIP. This fund has generated 8.28% annualised returns in the past three years and 7.38% in the previous five.

Aditya Birla Sun Life Dynamic Bond Retail Fund Direct Growth

This fund requires a minimum investment of ₹1,000 via lump sum and SIP. It has delivered 7.75% annualised returns over the last three years and 6.81% in the last five.

SBI Magnum Gilt Fund Direct Growth

The SBI Magnum Gilt Fund requires a minimum investment of ₹5,000 via lump sum and ₹500 via SIP. It has provided 7.41% annualised returns in the past three years and 7.7% in the last five.

ICICI Prudential All Seasons Bond Fund Direct Plan Growth

With a minimum investment of ₹5,000 for a lump sum and ₹100 for SIP, this fund has yielded 7.25% annualised returns in the past three years and 8.17% in the last five.

Nippon India Corporate Bond Fund Direct Growth

The Nippon India Corporate Bond Fund requires a minimum investment of ₹1,000 for a lump sum and ₹100 for SIP. It has generated 6.86% annualised returns over the past three years and 7.22% in the last five.

Tata Money Market Fund Direct Growth

This fund has a minimum investment requirement of ₹5,000 for a lump sum and ₹500 for SIP. It has delivered 6.71% annualised returns in the past three years and 6.19% in the previous five.

ICICI Prudential Banking & PSU Debt Direct Growth

The ICICI Prudential Banking & PSU Debt Fund has a minimum investment requirement of ₹500 for a lump sum and ₹100 for SIP. It has yielded 6.61% annualised returns over the past three years and 7.07% in the last five.

Baroda BNP Paribas Dynamic Bond Fund - Regular Plan - Growth

Baroda BNP Paribas Dynamic Bond Fund does not provide information on the minimum investment amount. However, it is one of the top-performing debt funds and is rated highly by Money Control.

Bandhan Dynamic Bond Fund - Regular Plan - Growth

Similar to the Baroda BNP Paribas Dynamic Bond Fund, the Bandhan Dynamic Bond Fund also does not provide information on the minimum investment amount. However, it is also rated highly by Money Control and is considered a top-performing debt fund.

Best hybrid mutual funds

Hybrid mutual funds are suitable for both conservative and aggressive investors. They are a blend of more than one asset class, with varying levels of risk, asset allocation, capital appreciation, and diversification. This makes them a good option for all kinds of investment styles and objectives.

• Quant Multi Asset Fund: This fund has provided annualised returns of 23.82% in the past three years and 29.04% in the last five years. The minimum investment amount is ₹5,000 for lump sum and ₹1,000 for SIP.
• JM Aggressive Hybrid Fund: This fund has delivered annualised returns of 22.86% in the past three years and 26.61% in the last five years. The minimum investment amount is ₹1,000 for lump sum and ₹100 for SIP.
• HDFC Balanced Advantage Fund: With annualised returns of 22.15% in the past three years and 20.94% in the last five years, this fund has a minimum investment amount of ₹100 for both lump sum and SIP.
• ICICI Prudential Multi Asset Fund: Offering annualised returns of 20.29% in the past three years and 21.95% in the last five years, this fund requires a minimum investment of ₹5,000 for lump sum and ₹100 for SIP.
• ICICI Prudential Equity & Debt Fund: This fund has generated annualised returns of 20.24% in the past three years and 22.87% in the last five years. The minimum investment amount is ₹5,000 for lump sum and ₹100 for SIP.
• Edelweiss Aggressive Hybrid Fund: The fund has provided annualised returns of 19.36% in the past three years and 20.31% in the last five years. The minimum investment amount is ₹100 for both lump sum and SIP.

When choosing a hybrid mutual fund, it is important to consider factors such as the fund's history, expense ratio, and the fund manager's performance. Additionally, investors should assess their risk tolerance, investment goals, and time horizon before making a decision.

Best tax-saving mutual funds

When it comes to investing in mutual funds in India, there are a plethora of options to choose from. However, selecting the best mutual fund depends on an individual's risk profile and investment goals. Tax-saving mutual funds, also known as Equity Linked Savings Schemes (ELSSs), are a popular choice for investors looking to save taxes and create wealth over the long term. Here are some of the best tax-saving mutual funds to consider:

Axis Long Term Equity Fund

Axis Long Term Equity Fund is a popular choice for tax-saving mutual funds in India. It has a track record of delivering consistent returns and is rated highly by analysts. The fund aims to generate long-term capital appreciation by investing predominantly in a diversified portfolio of equity and equity-related instruments. The fund has a lock-in period of three years, which is standard for most ELSS funds.

Canara Robeco Equity Tax Saver Fund

Canara Robeco Equity Tax Saver Fund is another top-performing tax-saving mutual fund. The fund aims to provide capital appreciation over the long term by investing in a well-diversified portfolio of large-cap, mid-cap, and small-cap stocks. Canara Robeco has a strong track record of delivering healthy returns, making it a preferred choice for investors looking for tax-saving options.

Mirae Asset Tax Saver Fund

Mirae Asset Tax Saver Fund is a well-known ELSS fund that aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related securities. The fund follows a blend of large-cap and mid-cap allocation, with a focus on investing in quality businesses with strong growth potential. Mirae Asset Tax Saver Fund has consistently delivered strong returns, making it a top choice for investors.

Invesco India Tax Plan Fund

Invesco India Tax Plan Fund is a tax-saving mutual fund that aims to provide capital appreciation over the long term. The fund invests primarily in equity and equity-related instruments across various sectors and has a dynamic asset allocation strategy. Invesco India Tax Plan Fund has a strong track record of delivering healthy returns, making it a preferred choice for investors looking for tax-saving options.

Quant Tax Plan

Quant Tax Plan is a relatively new addition to the list of best tax-saving mutual funds in India. The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related instruments. Quant Mutual Fund is known for its strong research capabilities, and the Quant Tax Plan is no exception. The fund has a well-defined investment strategy and aims to provide healthy returns to its investors.

Bank of India Tax Advantage

Bank of India Tax Advantage is another ELSS fund that has gained popularity in recent years. The fund seeks to generate capital appreciation over the long term by investing in a diversified portfolio of equity and equity-related instruments. Bank of India, being a trusted name in the financial industry, adds credibility to this tax-saving mutual fund. The fund has a disciplined investment approach and aims to provide healthy returns.

When investing in tax-saving mutual funds, it is essential to consider your investment goals, risk appetite, and the lock-in period associated with these funds. While ELSS funds offer tax benefits and the potential for higher returns, they also carry a higher risk due to their equity exposure. It is always recommended to carefully read the offer document and seek professional advice before investing.

Best low-risk mutual funds

Low-risk mutual funds are investment options that carry minimal risk and stable returns. They are suitable for investors with a low-risk appetite and those new to investing. These funds primarily invest in debt instruments like government bonds and real estate.

• Invesco India Arbitrage Fund: This fund has given 7.19% annualised returns in the past three years and 6.16% in the last five years. The minimum amount required to invest via lump sum is ₹1,000 and via SIP is ₹500.
• Tata Arbitrage Fund: This fund has given 6.8% annualised returns in the past three years and 6.2% in the last five years. The minimum amount required to invest via lump sum is ₹5,000 and via SIP is ₹150.
• Bank of India Overnight Fund: This fund falls under the Debt category of Bank of India Mutual Funds.
• Axis Overnight Fund: This fund has given 5.87% annualised returns in the past three years and 4.89% in the last five years. It falls under the Debt category of Axis Mutual Funds.
• Mirae Asset Overnight Fund: This fund has given 5.87% annualised returns in the past three years and 4.93% in the last five years. The minimum amount required to invest via lump sum is ₹5,000 and via SIP is ₹99.
• Quant Overnight Fund: The minimum amount required to invest via lump sum is ₹5,000 and via SIP is ₹1,000.
• Kotak Equity Arbitrage Fund: This fund has given 6.96% annualised returns in the past three years and 6.1% in the last five years. The minimum amount required to invest via lump sum is ₹100 and via SIP is ₹100.
• Edelweiss Arbitrage Fund: This fund has given 6.91% annualised returns in the past three years and 6.15% in the last five years. The minimum amount required to invest via lump sum is ₹100 and via SIP is ₹100.
• Nippon India Arbitrage Fund: This fund has given 6.79% annualised returns in the past three years and 6.01% in the last five years. The minimum amount required to invest via lump sum is ₹5,000 and via SIP is ₹100.

When choosing a low-risk mutual fund, it is important to consider factors such as asset allocation, risk-reward ratio, capital gains tax implications, and investment goals. These funds offer benefits such as fulfilment of short-term goals, minimal risk, enhanced liquidity, and higher returns compared to fixed deposits.

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