Best Mutual Funds to Invest

Financial planning is something that cannot be taken lightly in today’s day and age. With the high rates of inflation and depreciating value of the Rupee, it has become important to shield your purchasing power. Investing in the market can be lucrative, but comes with many associated risks. This is why many people are turning to mutual funds, which offers a low-risk option. One might ask, which mutual fund is best to invest in? Thankfully, there are many attractive options that you can choose from. It is crucial that you invest in the right mutual funds to gain maximum returns. The subsequent list outlines the best available choices in the current Indian market:

1. Axis Long-Term Equity Fund

This is one of the best mutual funds to invest in India right now. It’s highly recommended by many financial experts and is the best of its kind, currently valued at approximately Rs. 18,750 crore. This plan also allows you to generate sizeable returns within 3-4 years of investment. Investors can expect wealth generation of up to 14.1% in three years, and about 24.9% in five years.

2. Aditya Birla Sun Life Tax Relief 96

The chief goal of this scheme is to create wealth across a long period of time. This fund is known to invest in equities, money market instruments, and debt. It’s a part of ‘Aditya Birla Sun Life Mutual Funds,’ and is regarded for its overall excellent performance. The plan was commenced on 29th March, 1996, and has generated impressive returns of over 25.3% (CAGR). This scheme invests most of its funds in large corporations and smaller amounts in debt instruments and SMEs.

3. DSP Tax Saver Fund

This is another fund that invests around 80% in large corporations. The plan was launched on 18th January, 2007, and has since been one of the best mutual funds to invest in. It’s known for investing in fast-growing companies with bright future prospects. One can expect a bottom-up style of investment that provides about 14.7% (CAGR) returns in three years, and about 21.2% (CAGR) in five years. It is important to note that the successful performance of this fund will not be affected by the recent rift between Blackrock and DSP. The manager of this scheme is Rohit Singhania, who has been handling things since July 2015.

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4. ICICI Prudential Long Term Equity Fund

Funds in this scheme are typically directed towards companies with a bright future and a high-growth potential. Another hallmark of this scheme is that it invests in organisations that have performed well across various markets. This strategy is famous for generating consistent returns of 15.6% and 20.8%, over the period of 10 and 5 years respectively. It has outperformed its NIFTY 500 benchmark in the past decade. This plan invests a small amount of money in small and medium cap companies, and about 80% in large cap companies. The current fund manager is George Heber Joseph.

5. Reliance Tax Saver Fund

This is a fund that crossed its benchmark (NIFTY 100 TRI) over the last decade. It has shifted from small- and mid-capped stocks to investing 97% of its money in large cap options. It was launched on 21st December, 2005 and is headed by Ashwani Kumar. The overall return provided by this fund since its commencement has been an impressive 14.5%. Over the past decade, it has exceeded the average returns provided by the industry by 2-3%.

6. Tata India Tax Savings

This scheme has provided impressive returns of over 19.5% since its start date. It was commenced from 31st March, 1996 and its performance has been high-quality. The investment is done in companies with excellent fundamentals, and about 99% of its portfolio is encapsulated in large and humongous cap stocks. In a five-year period, one can expect returns of over 20.9% (CAGR) and 15.5% of wealth is created within a span of 3 years. The tactic employed for stock selection is a blend of value and growth strategy.

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7. Principal Tax Savings

The focus of this plan is on providing its customers with long-term benefits. The strategy includes investing more than 80% of the fund’s assets in equity and other similar instruments, and about 20% in money market options and debt. A major chunk of the portfolio, roughly 81%, is contained in large and colossal cap entities and the remaining in small-mid cap companies, and approximately 3.25% in cash equivalents or cash. The returns provided are over 22.4% and 17.5% for the previous 5 and 3 years respectively, making it the best MF to invest in.

It’s important to consider all the above mentioned options before selecting a mutual fund that will satisfy your specific needs. One should avoid putting all their eggs in a single basket, and it may be a good idea to diversify investments across different options. Selecting the suitable option after exhaustive research is the best strategy.

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