Best Equity Funds

All about Equity-oriented Mutual Funds:

Before getting to know what equity funds are, let’s first know what mutual funds are:

A mutual fund is a company that collects money from investors and invests that amount in securities such as stocks, bonds, and short-term money market instruments. All the holdings of the mutual fund together are known as its portfolio which is managed by qualified and experienced personnel known as a fund manager. Each security held by the investors by investing in a mutual fund represents their part ownership in the fund and the income generated henceforth.

Likewise, an equity mutual fund scheme invests predominantly in a set of stocks. Depending on the investment objective, the investment strategy of the fund, the fund manager may invest your funds in pooled assets in a category of stocks.

Based on asset classes, mutual fund schemes can be loosely divided into three categories:

1. Equity Schemes

2. Debt Schemes

3. Hybrid Schemes

However, the Income Tax Act, 1961, for tax purposes, classifies mutual funds into only two types–equity-oriented mutual funds and non-equity-oriented mutual funds. So, let’s dive into what equity-oriented mutual fund schemes are.

What are Equity-oriented Mutual Funds?

Those funds that invest at least 65% of the assets in equity and equity-related instruments are equity-oriented mutual funds. The equity-oriented fund portfolio will, therefore, be skewed in favor of equity investments.

According to the Securities and Exchange Board of India (SEBI) classification guidelines, equity-oriented schemes of mutual funds can be categorized into 11 categories:

Multi-Cap Fund

These funds enjoy the versatility of investing in domestic equities at least 65% through market capitalizations. It can invest through the large cap, mid cap and small cap stocks as such.

Large Cap Fund

These funds need to invest at least 80% of their investments in large-cap companies' equity-related instruments. In terms of full market capitalization, large Cap companies are described as the top 100 firms, measured as an average market cap across all stock exchanges where such stocks are listed. According to the latest list released for the half-year ended 31 December 2018 by the Association of Mutual Funds of India (AMFI), the cut-off for large-cap firms is at the average market cap of Rs. 28,332 crores.

Mid Cap Fund

These funds must invest at least 65% of their investments in mid-cap companies' equity-related instruments. Mid Cap Companies are classified as the companies with full market capitalization ranks 101st to 250th, measured as an average market cap across all stock exchanges where such stocks are listed. The average market cap for mid-cap companies ranges from Rs. 8,590 crores to Rs. 27,944 crores, according to the latest list released by the AMFI for the half-year ended 31 December 2018.

Large & Mid Cap Fund

These funds need to invest at least 35 percent in equity-related large-cap stock instruments and, still, at least 35 percent in equity-related mid-cap stock instruments.

Small Cap Fund

These funds need to invest at least 65% of their investments in small-cap companies' equity-related instruments. Small-Cap companies are classified as companies with full market capitalization at rank 251st and onwards, measured as an average market cap across all stock exchanges where such stocks are listed. According to the latest list released by AMFI for the half-year ended December 31, 2018, the listed companies are all small-cap firms below the average market cap of Rs. 8,519 crores.

Dividend Yield Fund

These funds invest primarily in dividend paying stocks of equity-related securities with a minimum of 65% of their assets.

Value Fund

These funds pursue a value investment strategy in equity-related instruments with at least 65 percent of their investments.

Contra Fund

These funds pursue a contrary investment strategy in equity-related securities with at least 65 percent of their portfolio.

Focused Fund

These funds focus on a portfolio's number of stocks and thus hold up to 30 stocks in the portfolio. In addition, these schemes should clearly outline where the scheme plans to focus on multi-cap, large-cap, mid-cap, and small-cap and further invest at least 65% of its portfolio in equity-related instruments.

Sectoral/Thematic Fund

These funds are intended to capture investment opportunities in a specific sector/theme and therefore need to invest at least 80 percent of their investments in equity-related instruments of a particular sector/theme they focus on.

Equity Linked Savings Scheme (ELSS)

These funds need to invest in equity-related securities at least 80 percent of their assets. In addition, these funds have a 3-year lock-in duration from the investment date and are eligible for tax deduction u/s 80C of the Income Tax Act, 1961.

Benefits of Equity Mutual Fund:

Investing in equity mutual funds offers several advantages.

Diversification

Equity Funds invest in a range of securities which lowers the risk if any security fails to perform. If you directly invest in stocks, you may not be able to invest in many securities to add to your portfolio. Thus, an equity mutual fund brings diversification to your investment portfolio and safeguards your investment objective.

Professional Management

Majority of the investors lack the necessary knowledge and skill required to get the best from an investment. By investing in a mutual fund, dedicated skilled professionals are appointed by the mutual fund houses to track the prospects and potential of the companies by continuous research and monitoring.

Lower entry level

Investment in equity mutual funds is possible with as low as Rs. 500, which is especially encouraging for investors interested in taking exposure to the stock market with a small amount of money.

Plans & Services by Mutual Fund Houses

If you invest directly in the stock market, you will be deprived of the innovative plans offered by the mutual fund companies. Investment in equity mutual funds offer automatic re-investment plans, systematic investment plans (SIPs), systematic withdrawal plans (SWPs), asset allocation plans, etc. to help you efficiently manage your portfolio along with sound financial planning.Such plans allow investors to easily enter/exit funds, or switch from one fund to another which probably will never be possible with direct investment in stocks.

Types of Equity Mutual Funds

As per the SEBI categorization of mutual fund schemes, equity mutual funds can be classified into 10 different sub-categories.

  • Large-cap Fund – Invests minimum 80% in large-cap stocks.
  • Large & Midcap Fund – Invests minimum 35% in large-cap companies and simultaneously maintain a minimum 35% allocation to mid-cap stocks.
  • Midcap Fund – Invests minimum 65% in mid-cap stocks.
  • Small-cap Fund - Invests minimum 65% in small-cap stocks.
  • Multi-cap Fund - Invests minimum 65% across large cap, mid cap, small cap stocks.
  • Dividend Yield Fund - Invests minimum 65% in dividend yielding stocks.
  • Value/Contra Fund - Invests minimum 65% in equity by following the value/contrarian investment strategy.
  • Focused Fund – This scheme focuses on the number of stocks (maximum 30), and invest a minimum of 65% of its assets in equity & equity related instruments.
  • Sectoral/Thematic Fund - The investment in equity & equity related instruments of a particular sector/particular theme (like banking, FMCG, etc.) should be a minimum of 80% of total assets.
  • ELSS (Equity Linked Savings Scheme) - Invests minimum 80% of total assets in equity & equity related instruments (as per the Equity Linked Saving Scheme, 2005 notified by Ministry of Finance) with a statutory lock-in of 3 years and offer tax benefit under section 80C

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Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Multi Cap Mutual Funds

What is Multi Cap Funds?

These are diversified mutual funds that through market capitalization can invest in stocks. In other words, they're agnostic to market capitalization. These funds use stock fluctuations commensurate with the conditions of the market.

Multi-cap funds are those that diversify their investments into all three categories (small, medium, and large-cap). These funds invest by market capitalization of shares. That is, there are large caps, mid-caps and small-cap stocks in their portfolio. Compared to a pure mid-cap or a small-cap investment, they are comparatively less volatile and ideal for investors who are not so aggressive.

How Multi-cap Funds are Different?

Funds in other categories, such as large-cap, mid-cap, small-cap, multi-cap, have mandates for restriction and are forced to adhere to the companies that are defined by their portfolio. For example, even if the valuations in the market might seem lucrative, a large-cap fund will not be able to invest in mid-and small-cap stocks.

Similarly, even if the market does not perform up to the mark, a mid-cap fund is forced to remain invested in mid and small-cap stocks. A multi-cap fund works to be a better choice for the investor in such a scenario.

Multi-cap funds are, therefore, usually better wealth creators in the long run than other types of funds as they can take advantage of market-wide investment opportunities. In contrast, long-term returns from the multi-cap class are comparable to the mid-cap category, resulting in lower volatility.

Who should invest in Multi-cap Mutual Funds?

Investors who are moderate risk-takers and who are not inclined to market research on a particular fund may consider investing in multi-cap schemes to create long-term wealth. Such funds have the ability, as discussed above, to deliver better returns than large-cap, but offer lower returns relative to mid-and small-cap funds.

So, if you have a multi-cap fund exposure, you'll be exposed to companies of different sizes and you'll be fairly diversified with simplicity.

Things to consider before investing in Multi-cap Funds:

A multi-cap fund invests across various market caps, the views of the fund manager are critical to determining the performance of the fund. Until investing based on parameters such as three-year and five-year average annualized returns, volatility, and portfolio concentration, it is advisable to test the fund manager's record and long-term results.

It is also important to look at the portfolio invested by this fund during the tenure. Because multi-cap funds are not limited to investing in any specific market, it is of utmost importance for an investor to look at sectoral patterns, as some sectors might not be preferred to invest in, so you might drill down to that level of detail and decide accordingly.

Equity fund is a class of mutual funds that predominantly deals with equity shares. In other words, equity funds are essentially listed stock market securities. These funds are preferred to generate long term returns.

According to the apex mutual fund body, Association of Mutual Funds in India (AMFI), the total investment in equity funds has clocked over Rs. 8 lakh crore as of December 2018. The reason behind their soaring popularity is that in the long run, the best performing equity funds typically generate much higher returns compared to debt funds or even fixed deposits.

There are several types of equity funds based on market capitalization, investment style, tax treatment, geographical markers, management style, and growth prospects. Some of the best equity mutual funds are even sector-specific investments; such funds are called sectoral fund.

The cost of an equity fund is determined by subtracting the liabilities from its net asset value (NAV). An individual may invest in the best equity mutual funds available in India, with a relatively small pool of capital.

Major Advantages

The following are the major plus points these schemes carry.

  • Reduces the element of risk which prevents many retail customers from entering the mutual funds niche.

  • Sustainable returns for up to 7 years. This gives enough time for long term financial planning.

  • Helps in portfolio diversification.

  • Creates more investment oppurtunities across many market segments since the best Mutual Funds are spread out Regardless of market capitalisation.

Why invest with Optymoney

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— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Large Cap Mutual Funds

Large-cap Mutual Funds - Definition and Benefits

Many of us agree that investment in mutual funds is the most dangerous alternative to investing our hard-earned money. In a safe avenue, we always want to park our funds so we don't lose our capital and earn a good income. But do you know that mutual funds are also one of the best ways to invest and help generate big profits over time? If you haven't heard of it, something very important would be lacking.

What we need to know about is the large-cap fund, a class of equity mutual funds. Let's know here how safe and profitable it is to invest in large-cap mutual funds in India.

What is a large-cap fund?

The large-cap mutual fund is an investment vehicle that allows investors to make equity investments to gain capital appreciation. It belongs to the class of "Equity Mutual Funds" and has the primary objective of offering a period for capital growth and higher returns.

Likewise, an equity mutual fund scheme invests predominantly in a set of stocks. Depending on the investment objective, the investment strategy of the fund, the fund manager may invest your funds in pooled assets in a category of stocks.

The main feature that distinguishes Large-caps from other alternatives includes the investments it makes in well-established and large-cap companies. The chances of growing the capital are very high as the funds are being put into big companies.

Big businesses have, as we know, already reached their top levels, so investing in them is truly beneficial for regular income gain. Through investing the money in a large number of companies' high-ranking equity shares, these funds aim to provide the investors with superior benefits.

Benefits of Large-cap Mutual Funds:
  • Stability
  • The large-cap mutual funds provide the investors with stable returns to help them grow substantially in their capital invested. The stocks they invest in performance consistently and market movements do not fluctuate them. Large-cap companies' stocks tend to yield stable dividend returns and help appreciate the value of investors.

  • Capital Growth
  • As investments in large-cap funds are made in large-scale corporate equity stocks and shares, they tend to generate massive capital growth. To earn money, bonds and stocks are considered the best investments, and the investments made in the Large-caps provide the same.

  • Security
  • The stock market has a major impact on investment values. Market volatility tends to fluctuate the NAV of mutual fund plans, further reducing revenue or earnings. As investments are made in highly affluent and well-established companies, the large-cap equity mutual funds provide security to the funds.

  • Security
  • The stock market has a major impact on investment values. Market volatility tends to fluctuate the NAV of mutual fund plans, further reducing revenue or earnings. As investments are made in highly affluent and well-established companies, the large-cap equity mutual funds provide security to the funds.

  • Diversification
  • The Large-caps provide the benefit of reducing risk factors by helping to diversify the investments across different sectors. The earnings are increased with this, and the risk is greatly minimized.

Things to consider before investing in Large-cap Funds:
  • Risk
  • While moderately, large-cap equity funds are subject to market risk. As compared to small-cap/mid-cap investments, the Net Asset Value (NAV) is not actively fluctuating due to benchmark ups and downs. These funds provide your investment portfolio with stability, and you might think about aligning the core of your investment portfolio with them. During a market boom, however, under-performance becomes the price of out-performance during a recession.

  • Return
  • Do not expect the large-cap equity funds to behave erratically, as these have many years of history showing strong performance in both low and high market levels. There will be less unpredictable returns from these investments, which should be the draw when investing in them. Do not feel let down if these funds do not generate high returns even when the market is at its peak.

  • Cost
  • Large-cap equity funds charge a fee to cover the expense ratio of your portfolio. This acts as a percentage of the average asset under management (AUM), based on the fund's operating performance. SEBI has set the upper expenditure ratio at 2.50 percent. Taking into account the relatively lower returns provided by these funds compared to small-cap/mid-cap equity funds, a fund with a lower expense ratio and a long-term holding period will help to recover the money lost by underperformance.

  • Duration
  • Large-cap equity funds are appropriate for people with a long-term investment horizon. Usually, the fund experiences a lot of underperformance during the slump period, which is more than seven years on average to yield returns in the range of 10%-12%. Those who choose these funds must be prepared to stick around for that period at least so that the fund can realize its full potential.

  • Financial objectives
  • Large-cap equity funds are suitable for an investor in search of a reasonable risk level. During the slump, these funds have steady returns and track the loss of fund value. These funds can be used to accumulate wealth for retirement planning. Budding investors who seek exposure in equity markets but are cautious about the risks involved can build their portfolio around these funds. Investors should look at these funds as perfect investments with ease of investing and favorable tax treatment.

  • Taxation
  • You receive capital gains if you sell units of large-cap equity funds. These capital gains in your hands are taxable. The tax rate depends on how long you have been invested in equity funds; this is called the holding period.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Mid Cap Mutual funds

What is Mid Cap Mutual Funds?

Mid-cap (or mid-capitalization) is the term that is used to designate companies with a market cap (capitalization)—or market value—between $2 and $10 billion. As the name implies, a mid-cap company falls in the middle between large-cap (or big-cap) and small-cap companies. Classifications, such as large-cap, mid-cap, and small-cap are approximations of a company's current value; as such, they may change over time.

Key Takeaways:
  • Mid-cap is the term given to companies with a market cap (capitalization)—or market value—between $2 billion and $10 billion.

  • For companies, some of the appealing features of mid-cap companies are that they are expected to grow and increase profits, market share. and productivity; they are in the middle of their growth curve.

  • Mid-cap stocks are useful in portfolio diversification because they provide a balance of growth and stability.

There are two main ways a company can raise capital when it's needed: through debt or equity. Debt must be paid back but can generally be borrowed at a lower rate than equity (due to tax advantages). Equity may cost more, but it does not need to be paid back in times of crisis. As a result, companies strive to strike a balance between debt and equity. This balance is referred to as a firm's capital structure. Capital structure, especially equity capital structure, can tell investors a lot about the growth prospects for a company.

One way to gain insight about a company's capital structure and market depth is by calculating its market capitalization. Companies with low market capitalization, also referred to as small-caps, have $2 billion or less in market capitalization. Large-capitalization firms have over $10 billion in market capitalization, and mid-cap firms fall somewhere in between these two categories (ranging from $2 billion to $10 billion in market capitalization). Additional categories such as mega-cap (over $200 billion), micro-cap ($50 million to $500 million) and nano-cap (less than $50 million) have been added to the spectrum of market capitalization for the sake of clarity.

For investors, a mid-cap company may be appealing because they are expected to grow and increase in profits, market share, and productivity; they are in the middle of their growth curve. Since they are still considered to be in a growth stage, they are deemed to be less risky than small-caps, but more risky than large-caps. Successful mid-cap companies run the risk of seeing their market capitalization rise, mainly due to an increase in their share prices, to the point where they fall out of the 'mid-cap' category.

While a company's market cap depends on market price, a company with a stock priced above $10 is not necessarily a mid-cap stock. To calculate market capitalization, analysts multiply the current market price by the current number of shares outstanding. For example, if company A has 10 billion shares outstanding at a price of $1, it has a market capitalization of $10 billion. If company B has one billion shares outstanding at a price of $5, company B has a market capitalization of $5 billion. Even though company A has a lower stock price, it has a higher market capitalization than company B. Company B may have the higher stock price, but it has one-tenth of the shares outstanding.

Major Advantages

Most financial advisors suggest that the key to minimizing risk is a well-diversified portfolio; investors should have a mix of small-, mid- and large-cap stocks. However, some investors see mid-cap stocks as a way to diversify risk, as well. Small-cap stocks offer the most growth potential, but that growth comes with the most risk. Large-cap stocks offer the most stability, but they offer lower growth prospects. Mid-cap stocks represent a hybrid of the two, providing a balance of growth and stability.

No one can accurately predict when the market will favor a specific kind of company, whether it’s a large-, mid- or small-cap. So it’s important to diversify your portfolio, as we mentioned above. But the percentage of mid-caps that you’ll want to invest in depends on your specific goals and risk tolerance.

However, there are many advantages to mid-cap companies that investors may want to consider. When interest rates are low and capital is cheap, corporate growth is generally stable. Mid-cap companies typically can get the credit they need in order to grow, and they do well during the expansion part of the business cycle.

Mid-caps are not as risky as small-cap companies, which means they tend to do relatively well financially during times of economic turbulence. In addition, many mid-caps are well known, are often focused on one specific business, and have been around long enough to make a niche in their target market. And finally, because they are riskier than large caps, they may have a higher return, which could be more appealing to a less risk averse investor's bottom line.

Investor's can either buy a mid-cap company's stock directly or buy a mid-cap mutual fund—an investment vehicle that focuses on mid-cap companies.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Small Cap Mutual funds

What is Small Cap Mutual Funds?

Small-cap organizations are the ones that will later turn out to be enormous tops, and thus their plans may generate greater returns. While investing in small-cap funds is not something one should oppose, specialists feel that investors should have adequate resource allocation cross-sectionally over distinct categories even within an advantage class, for instance, equity mutual funds. Stopping your entire venture into a more unsafe class is not a reasonable decision.

The agreement between venture counselors is that for every penny of equity mutual fund investment, mid-and small-cap plans are steered by up to 30%. There is a view that it should be through effective investment strategies if the money goes into middle and small Cap plans. A single investment quantity opens up a significant chance for the benefits of averaging the expenditure, so a decline in the business sector will have more effect on such investments.

Why invest in small-cap mutual funds?

The small-cap fund generates a lot of punch for the portfolio and is capable of delivering yields that exceed the average when the market booms. This time, the funds are more susceptible to instability as when market tanks hit small-cap firms more stringently. Mid-cap businesses are such that for about three years they have about 60 percent of assets in mid-cap businesses. Such funds touch the higher heights when the market is favorable, but when the flood reverses, they can also clear fortunes.

Small-cap Mutual Fund’s Performance.

A small-cap mutual fund can steal the show after a long pause when the stock market recovers. In comparison, the BSE Small-Cap index and the BSE-Mid Cap index are around 44 percent and 34 percent respectively, this year the BSE experience an 18 percent increase. It is a general view that the small stocks give the greatest yields when the stock markets perform well. However, they drop even more when the market is performing poorly.

The reason is that in worse financial circumstances, smaller firms are hitting more. Besides, even a small investment in bull markets can raise the smaller stock by a large degree. Several specialists illustrate that these funds include superior efficiency, leading to the marginal risk they carry. Some other variables responsible for it after the general elections are enhanced liquidity. Usually small and mid-cap shares are more conveniently liquid than big funds.

Things to keep in mind before investing in small-cap mutual funds:

It is known that the past performance of a fund does not ensure its future performance. But that doesn't mean you shouldn't do any research prior to investing in it about your investment strategy, fund manager, previous results, etc. Of course, if you want to earn beautiful returns by investing in small-cap funds, you need to spend enough time researching about it.

Small-cap funds, as discussed above, are extremely volatile in nature and tend to fluctuate frequently with market phases of bear and bull. So it's not a solution to invest in them with a short-term view. You need to work on the adage-'Patience is the key.' If you want to understand how these funds worked, you need to look at their results over the previous 5 or 10 years. So, if you're going to invest in these resources, you've got to invest for 5-10 years.

Diversification is a capable word that implies purchasing more than one sort of equity instruments when applied to investment. Diversifying a portfolio helps to spread the risk and minimize the losses. Because if you stick to just one investment style that makes you hold on to only small-cap funds, you might lose when the market goes down. A well diverse portfolio that includes a mixture of stocks can assist you enjoy earnings even when these funds hit.

Many financial sector specialists regarded timing the market to be a dumb activity. Market timing is not only nervous, but also dangerous for your portfolio of investments. You can never predict the market and its certainties because you never understand which factor is going to affect the sentiments of the market and drive it up and down. So, the best way is to remain away from the timing habit of the market and begin your investments with a long-term objective as soon as possible.

The investment philosophy followed by the fund must be consistent with the goals of the portfolio. This investment aspect is very important in moments of increased volatility. It is very hard to be an investor staying patient at the moment of market hit, so if the investment strategy and philosophy have to be in a manner that should promote your risk profile and investment goal.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

ELSS

Tax saving is one important part of our financial career, managing tax efficiently is an art , if you can expertise that most of your financial issues could be resolved. When it comes to saving taxes most of us wait till the month of March because we continue our habits to push everything to the last day of submission like our school time assignment. Most of us end of in the paws of wrong products just because we want to get over with this. This specially happens to the investor who have just started working and may not have much knowledge about investment or tax saving.

So before taking any decision further, please review one of the most popular tax saving option i.e. tax saving mutual funds.

Mutual fund has become the top choice for the investors when it comes to fulfill their financial goals. It’s widely available, easy to invest in and can be picked as per one’s requirement. It’s one of the highly liquid investment options available today. You can start investing in Mutual Funds with just Rs. 500/- per month and wait for the magic of compounding to multiply your happiness.

What is ELSS?

Meaning of ELSS is Equity Linked Savings Scheme; it’s a category of mutual fund which helps in saving taxes. ELSS offers you dual advantage of capital appreciation as well as tax saving under section 80© of Income Tax Act. ELSS fund comes under equity category (open ended) which means more than 65% of the money is invested in equity. One can save taxes upto Rs. 46,800*/-(*Considered 30% tax bracket includeingcess>) under section 80 C. ELSS fund have two options of investment: Growth and Dividend (includes dividend reinvestment and dividend payout).

Features of ELSS:
Lowest lock in period:

There are other tax saving products available in the market like PPF, NPS or FDs and so on, however all these products have a lock in period of more than 5 years. ELSS is one such product which gives you tax benefit with just a minimum lock in of 3 years.

Tax Saving

ELSS is a kind of mutual fund which provides deduction of upto 1.5lakhs from total income under section 80C.

Dividend and growth

One can choose to invest in either dividend or growth option depending upon the requirement of money. In growth option money is re invested and keep on growing till the time you redeem it, where as dividend is being paid out in dividend payout option. Dividend paid by ELSS funds is also taxable@ 11.65%.

Advantages of ELSS:

• Just 3 years of lock in.

• Just 3 years of lock in.

• The portfolio in which the will be invested is transparently available to all the investors.

• Once the invested money completes 3 years of lock in period, you can with draw 100% of it.

• ELSS provides you flexibility to invest via SIP or lump sum mode.

• The returns regenerated by ELSS funds are comparatively better than in competitor products.

• Fund manager is the expert who manages your money, even if you are new to investment but want to save tax, ELSS could be a good option.

• There is no maximum limit for investment in ELSS even once you tax limit is exhausted , one can still invest in ELSS only thing is taxes can be saved up to Rs. 46,800*/-.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Dividend Yeild

To understand what dividend yield fund is, we need to understand what dividend yield is in the first place.

The dividend yield is the ratio of past paid dividends to the market price per share. Full and partial dividends are included in the payout. A stock may be one that pays good dividends annually, but the price of the stock may be high. The dividend yield comes into play to ensure that the asking price for this secure dividend is not too much.

A dividend yield fund places most of its portfolio in stocks with high dividend yields. There are two sections in this definition to be understood. The first is that the fund does not put its entire portfolio in good dividend payer stocks; a portion of the portfolio will go into any stock where the fund manager sees the potential. When stocks outside the dividend yield criterion do not pay out dividends, the amount of distributable surplus that the fund might have had will be decreased if it had invested the entire portfolio in high dividend payers.

The second point addresses 'high yields of dividends.' What's 'high' meaning varies with funds. UTI Dividend Yield and ICICI Prudential Dividend Yield connect it to the Nifty 50 which means that if the dividend yields of stock exceed the dividend yield of the Nifty 50 it is a high dividend yield stock. It is related to the Sensex by Tata Dividend Yield. It is linked to the Nifty Dividend Opportunities index by the Principal Dividend Yield.

Therefore, every fund has a different stock basket in which to invest. The Nifty 50 dividend yield is currently 1.26, the Nifty Dividend Opportunities index is 3.6, the Sensex 1.21, and the BSE 500 1.23. The dividend yield itself varies as and when dividend payments are made and stock prices drop. The number of stocks to invest in is significant due to the relatively lower dividend yield cut-off. Therefore, a fund may wind up keeping a 'high' dividend yield stock simply because it is higher than the average, but it may not pay high dividends.

Dividend or Strategy.

So why would a fund look at dividend yields? This is because a dividend yield is a strategic tool for identifying value stocks. A stock with a high dividend yield is due to a low price.

If a company can reliably pay out healthy dividends over the years, calculated by the dividend payout as a proportion of earnings, this means it's a stable company. It means the company is cash-rich, it can balance income reinvestment for growth and dividend payment, it doesn't shorten its shareholders, it's built, and it's powerful.

The volatility of Dividend Yield Funds:

For such a company the stock price may sometimes be small because it is not favored by the market or has not yet noticed it. The share price is low at such times while the dividend pay-out remains high. This means that it has a high dividend yield and also means that the stock has value (as the price is low). Consequently, a dividend yield strategy translates into a value-based strategy. These also include stronger downsides because they are value investments, being a testament to this in 2008 and 2011. The profit from dividends also balances the fall in stock prices to a degree. On average, the volatility of dividend yield funds is lower than that of the categories of both diverse and large-cap.

How Dividend Yield Fund works?

Dividend yield funds follow the usual parameters for filtering out stocks. Blindly selecting high dividend yield stocks can result in investing in stocks of poor quality. Consistency in payments for dividends, their prospects for growth and fundamentals are also considered.

A dividend yield fund has more to do with value stock recognition than a high dividend payout. It doesn't have to pay a dividend. It will compress the distributable surplus of the fund when stock prices collapse and may make it unable to pay dividends.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Sector Funds

Sector Funds: Things to know about Thematic Funds

Sector funds, also known as thematic funds, are mutual funds focusing on a specific industry. This merely implies that the focus of such funds on a specific industry gives investors the option of a single industry to invest their assets in.

These are widely split into eight classifications: healthcare, communications, customer discretion, customer staples, equity, economic, industrial, natural resources, metals, true estate, technology, and utilities. Because of their understanding of a specific company and their profit range, many investors prefer these funds.

What is the Sector Fund?

These funds are the riskiest among equity funds since they only invest in particular sectors or industries. Sector fund performance relies on the fortunes of particular sectors or industries. By investing in the industry, this sort of fund maximizes yields when the industry is supposed to boom and get out before it drops. Only if you know the industry and its trends should you invest in these funds.

How to Invest in Sector Funds?

As the entire concentration is on a sector in the event of these funds, you need to be cautious when choosing your choice. You can also look at your investment length and then take the final call.

For example, if you want your money to grow in the long run and are in no hurry to get the returns, sectors such as pharmaceuticals and metals are perfect for you. Metal prices are rising over the years and their market value is minimal, many individuals are investing strongly in the metal industry as they think they are the sure earners in this industry. On the other side, the pharmaceutical industry is also constantly increasing with new developments and technological advancements and it can be useful for your financial portfolio to invest wisely in this sector.

If someone invests in mutual funds, he will seek guidance from financial specialists, it will be useful to do the same for these funds.

Should you concentrate all your investment to sector fund?

Sector fund focuses to some extent on a specific industry and limits diversification. Your views will surely alter as you start investing and understanding how sector funds function.

Any financial portfolio is not completely dependent on a specific investment choice, for example, you are not going to bring all your money into the stock market, just as investments in these funds should be part of your investment portfolio. As mentioned previously in the article, investors can choose from 8 vast industries in industry funds, so you can make your decisions intelligently and wisely.

Investing in mutual funds overall provides you plenty of choices and one of the many is sector funds. The market watchers can gain excellent returns on their cash by investing in the booming sectors as these funds concentrate on just one sector.

Risk variables in any business investment are never nil, but you can be on the safer side if you spend your cash by studying market trends. It can also assist you to multiply your money as well as be a powerful component of your investment portfolio, just like other evolving investment alternatives.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Contra Funds

What is Contra Funds?

Contra funds tend to select low-performing stocks and/or sectors at a cheap valuation that are likely to perform well over the long term.

Contra is short of Contrarian and Contra Funds are Equity Funds described as mutual funds with a contrary market view. These are an investment plan in which fund managers pick up undervalued stocks instead of investing in equities that look promising, intending to enhance long-term returns for the former. These are not short-term investments and are not the same as value funds.

How Contra Funds are different?

Investing in contra funds is often confused with investing in stocks that nobody would ever want to buy.

More often than not, blue-chip firms look out of place in a contra fund that has good business fundamentals. Contra funds only buy the best and most fundamentally sound companies, though, contrary to popular opinion.

Generally, these funds have a list of companies they consider to be fundamentally sound and they are waiting for these companies to either collapse on some company-specific bad news and then purchase those shares.

This could be something like a loss of earnings concerning market expectations, or a business setback that is not permanent.

Contra funds can, therefore, invest in sound companies, depending on the market cycle and the underlying stock value.

How Contra Funds work?

Contra Funds invest in shares that the market does not recognize when the fund managers buy them. In the long run, it could see a price-value increase as markets recover. Contrarians believe that exuberant stock demand or no stock demand leads to market mispricing and imbalance. Investors have a herd mentality of buying such trendy stocks which make it overpriced. Therefore, Contra Fund managers are going against the tide instead of buying those shares. They foresee a fall in overpriced resources and then, at the time of their value realization, they will capitalize on it by earning beautiful returns for the poor performing stocks purchased.

Returns on Contra Fund?

If the stocks have the potential for growth, contra funds can yield high returns. Contra Funds are an asset in the long term. When markets stabilize, fund investors benefit from increasing share prices, particularly superlative returns can be received because stocks are purchased at a lower cost than the basic value. Experts suggest that mutual funds should be allocated at least 25 percent of the investment.

Risks involved in Contra Funds:

There is a related threat of price trap in which funds will tend to drift down, believing to have a good value choice in the future. Funds that have been underperforming in bearish markets those remain so in bullish markets and may not expand even if all other stocks perform well. The underlying assumption that assets will reach their real value, in this case, may be wrong. Investing in Contra Funds, therefore, requires a lot of research and analysis. If the market goes down, though, it is less volatile and there is a smaller risk than the overall market because investors have already been out of favor.

Taxation on Contra Funds:

There is a related threat of price trap in which funds will tend to drift down, believing to have a good value choice in the future. Funds that have been underperforming in bearish markets those remain so in bullish markets and may not expand even if all other stocks perform well. The underlying assumption that assets will reach their real value, in this case, may be wrong. Investing in Contra Funds, therefore, requires a lot of research and analysis. If the market goes down, though, it is less volatile and there is a smaller risk than the overall market because investors have already been out of favor.

In comparison to equity-diversified funds, you cannot base your investment decisions on contra-fund returns. You need to look at the fund's mission and the themes in which it invests. If you agree with the outlook of the fund manager, given the expected returns, you should invest. The other thumb-rule is investing in long-standing investments, not in new fund offers.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Value Funds

A Glimpse to Value Funds?

Value funds are mutual fund schemes that attempt to spot out-of-favor and discounted businesses. The fund manager believes these stocks are worth much more than the cost at which they are accessible.

What are Value Funds?

A value fund is a fund that follows a value investment strategy and seeks to invest in stocks that are considered undervalued based on basic features in prices. Value investment is often contrasted with growth investment that focuses on high growth opportunities for emerging businesses.

Value funds are often synonymous with value investing. Value managers select value fund stocks based on the basic features of the intrinsic value of a stock. Value funds are typically used as allocations for long-term investments that can grow continuously over time. Thus, investment in value funds is often connected with due diligence and patience of investment.

Value Funds vs Multi-cap Funds.

They might be similar at times, but they're not the same. All stocks can be either value-based or growth-based. Growth stocks are where investors are prepared to pay a premium because the business is growing much more rapidly. Because business is growing quicker, more money will be earned and individuals are ready to pay a greater cost to accomplish that greater growth.

Multi-cap funds can, therefore, be both a mixture of value and growth and will necessarily be invested in all sizes of businesses. Multi-cap is, therefore, an ideal depiction of all business dimensions in your portfolio-big, mid and small. Value funds are not intended at all times to be multi-cap.

More about Value Funds:

A value fund is offered by almost every big fund family. Value funds are often broken down by differing parts with market capitalization being one of the most common variation classifications. For instance, for investors to choose from, a fund family may include small-, mid- and large-cap value funds.

The assumption of value investing is that the market has intrinsic inefficiencies that, for multiple reasons, cause particular businesses to trade below what they are truly worth. Value fund managers can identify inefficiencies in these markets. Theoretically, once these inefficiencies are corrected by the market, the value investor will benefit from a share price rise. Value funds are also often connected with dividend payments as they are generally well-established firms with dedicated dividend distribution programs.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Hybrid Funds

What is a Hybrid Fund?

A Hybrid Fund is a mutual fund which invests in a balanced blend of common stock, bonds, and preferred stock with an objective of income generation and capital appreciation with low risk.

In a nutshell, Hybrid Mutual Funds provide the returns of the stock market as well as safety and regular income of bonds. Hybrid Funds are also known as Balanced Mutual Funds or Asset Allocation Funds.

What are Hybrid Funds and Why they are Better?

You are probably looking to invest in Mutual Funds which can provide you regular income as well as steady growth in your wealth at a handsome rate. For the same, you may be considering to invest in the equity mutual funds given the tremendous growth the stock market has shown over the years.

But are you aware that though the returns from the stock market are fascinating, they are equally risky too? The safer option to invest is “Hybrid Mutual Funds”. They provide adequate safety to the investor’s money along with impressive returns.

Similarly, for the safety of your funds, you may also be considering investing in bonds directly which too may not be an easy option. Hence for those, who want to invest in bonds, the best approach is to invest in mutual funds that have bonds in their portfolio.

How do you get returns from investing in Hybrid Funds?

Although Mutual Funds are a better and safer investment option than the stock market, they are subject to the volatility of the market. Hybrid Funds try to address this concern and provide a high and stable return.

Hybrid Funds usually invest about 60-65% of the investment amount in the equity and the remaining in debt funds (bonds). Sometimes, it may go up to 70% as well. While investing in equity, preference is given to the sector that has consistently shown high growth over the past few years and investment is done in stocks of those sectors.

Asset allocation within the sector also depends on the fundamentals of the organizations in that sector.

The top security in the sector may be allocated 10% of the total investment amount. Lesser the potential lesser will be the amount invested.

Hybrid Funds focus on investing in different sectors to create a diversified investment portfolio with minimized losses. Amount invested in bonds generally remain around 35-40% of the total money. The lesser amount will be invested in the more aggressive funds.

Investment in bonds and debt funds ensures safety and assured return for the investors.

Generally, government-issued bonds and bank bonds comprise the major portion of the investment portfolio of Hybrid Funds. However, depending upon the risk-bearing capacity of the investor, high rated corporate bonds and municipal bonds can also be included in the portfolio.

Why Hybrid Funds are better than Other Funds?

They provide certainty to returns and let your capital to appreciate which may not be possible with other types of funds. Depending on the investor’s risk tolerance, you can choose the allocation – it may be 70:30 or 60:40 equity-debt ratio or whichever is closer to your risk profile.

Most hybrid funds are flexible in how they allocate the investment amount. They keep their options open and make changes to the allocation depending on the market conditions and/or as per the regulations required. The only major concern for the investor is to check whether the tenure of the bonds is acceptable or not as long term bonds gives a better return than short term bonds.

Hybrid funds have performed significantly in recent years. They have shown tremendous returns as high as 20% or more. Their performance has come irrespective of the market conditions.

Hence, hybrid funds can be a great investment option to get the benefits of both equity and debt funds in one portfolio.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Aggressive Growth Funds

What is a Aggressive Growth Fund?

An aggressive growth fund is a mutual fund that seeks capital gains by investing in the shares of growth company stocks. Investments held in these funds are companies that demonstrate high growth potential, but also carry greater risk. As such, aggressive growth funds seek to provide above average market returns however their underlying investments are often volatile causing high share price volatility.

  • An aggressive growth fund invests in companies that have high growth potential, including newer companies and those in hot sectors of the economy.

  • As a result, these funds are actively managed to achieve above-average returns when markets are rising.

  • These stocks, however, are also quite a bit riskier than other stocks and so these funds may underperform in down markets and experience greater volatility overall.

Understanding Aggressive Growth Funds:

Aggressive growth funds are identified in the market as offering above average returns for investors willing to take some additional investment risk. They are expected to outperform standard growth funds by investing more heavily in companies they identify with aggressive growth prospects. Aggressive growth funds invest in growth stocks with relatively more aggressive projections for revenue and earnings than the standard growth stock universe. Because aggressive growth stock funds are investing based on forward-looking assumptions and multiple growth phases, they can have higher comparable risk. These funds typically do not fall into a standard category grouping reported by mutual fund research providers. They will typically be found in the growth fund category with fund names such as: aggressive growth fund, capital appreciation fund or capital gain fund. Their main focus is to invest for superior capital gains.

Since these funds typically are associated with high risk and high return it is important for investors to closely examine risk metrics of the funds. Beta, Sharpe Ratio and standard deviation are three risk metrics that are often reported by a fund company to help investors understand the fund’s risks. Comparing the risk metrics to a benchmark is typically best when seeking to understand fund risks. The Russell 3000 Growth Index is a good market index benchmark for investors when considering aggressive growth funds.

Aggressive growth funds offer some of the highest return potential in the equity markets, also with some of the highest risks. Some aggressive growth funds may integrate alternative investing strategies that utilize derivatives. Investors should do thorough due diligence on these funds to understand their investments and investment strategies.

Example of an Aggressive Growth Fund:

The ClearBridge Aggressive Growth Fund (Ticker: SHRAX) is one example of an aggressive growth fund available for both retail and institutional investors. As of March 2020, the Fund holds $6.8 billion in assets and had a year to date return of -3.35% versus a return of -3/72% forits benchmark Russell 3000 Growth Index. The Fund has a beta of 1.11, its Sharpe Ratio is 0.17 and its standard deviation is 15.55 - indicating a higher than average level of risk. Due to its active management style, it has an expense ratio of 1.12%.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Conservative Mutual Funds

What is a Conservative Mutual Funds?

Conservative mutual funds are a type of balanced funds. When you invest in them, the more significant proportion of your investment is made in debt instruments. About 75% to 90% of the investment is made in debt securities while 10% to 25% in equity. A conservative fund is for someone who doesn’t want to take a risk with their investment. It is also for people who want some benefits of equity and the security of debt investments. Conservative funds reduce the risk of losing out money.

In contrast to aggressive growth, conservative growth is an alternative investment strategy that aims to grow invested capital over the long term. These funds typically target long-term investors who place a high importance on wealth preservation but would also like to take advantage of some of the market’s high growth opportunities. Conservative growth funds usually allocate a high percentage of the fund to fixed income while investing the remaining allocation in growth or aggressive growth stocks.

A guide to investing in conservative mutual funds:

When you invest your hard-earned money in any financial instruments, you would surely want to valuable returns from it. Today, there are several investments options for investors, you can choose the right investment based on your goals, risk appetite, and expected returns.

Getting started with Conservative Mutual Funds:

One of the popular investment options among investors in India is Mutual Funds. Mutual fund investors provide relatively higher returns than traditional investment options like Fixed Deposits and Recurring Deposits. Also, another significant benefit of investing in a mutual fund is that it is suitable for all types of investors. You can invest in a mutual fund even if you have a low-risk appetite and yet earn good returns.

The market performance drives mutual funds investments. Equity mutual funds can give you higher returns, but it also has a higher You might make a lot of profits if the stocks pay off, but there is also a risk of losing your money if the stock loses its value.

The risk that comes with mutual funds can be reduced. Meanwhile, you can earn some returns too with your investment. This is where conservative mutual funds come into the picture.

Who should invest in Conservative Mutual funds?

A new investor can learn the art of investing in mutual funds with conservative funds. They will have the security of debt investment at the same time they can get some returns from equity funds. Conservative mutual funds offer returns at a reduced risk. Many people are investing in conservative funds to reduce the risk of their investment and get returns at the same time. Investment in a conservative fund is allocated in debt securities, equity, cash and cash equivalents. Debt and cash investments are allocated a bigger proportion.

The capital appreciation might not be high when you invest in conservative mutual funds. Investors who want to increase their returns in the future might not have profits with conservative funds.

Benefits of Conservative Mutual Funds:
  • Secured Profits
  • The investment in debt securities can get returns with reduced risk. Your profits won’t be impacted a lot by the market.

  • Low Risk
  • Conservative mutual funds aren’t impacted by the market as the investment is made in debt securities. People who want to get returns without taking a lot of risk can invest in conservative funds. The equity investment offers profits while the risk is reduced by securities.

  • Diversified Investment
  • Conservative mutual funds diversify the investment. While they invest a lot in debt, they will also invest in stocks. The risk of the stocks is balanced out with investments such as bonds, etc.

Bottom line on Conservative Mutual Funds

Conservative mutual funds make sure you have a balanced finance investment. The investment is made in stocks to increase returns and in debt to reduce risk.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Arbitrage Mutual Funds

Arbitrage Funds – Things to know before investing.

Unlike typical equity funds and hybrid funds, arbitrage funds create returns through the purchase and sale of securities in different markets to get the benefit of price mismatch.

Usually, arbitrage funds buys securities from the stock market and sell the same on futures contracts market at a high price to generate profit from the transaction. Since arbitrage funds are a type of equity-oriented hybrid funds, they also invest in short-term debt and money market instruments.

How Arbitrage Funds work ?

As mentioned above, arbitrage funds take into consideration the different prices of security in a different market for profit generation. The two markets where arbitrage funds deal majorly are cash (stock) market and the futures (derivatives) market.

Unlike the stock market, instead of taking into account the current valuation of securities, the futures market work on the anticipated price if the securities at a future time. The price of a security on the stock market at present times is known as the spot price. The future date of transaction mentioned in the futures contract is termed as the maturity date.

Contrary to a transaction in the cash market, securities purchased on the future market will be delivered to the buyer until the maturity date of the contract. On maturity, the transaction will take place on the pre-decided price specified in the futures contract.

Arbitrage Funds get returns from the difference in pricing of the stock between the stock market and the futures market. If the market is going high, a specified number of stocks are purchased from the stock market and simultaneously sold on the derivatives market. In case the market is expected to see a downfall, then the arbitrage fund will purchase the futures contract at a lower price and sell the equivalent number of shares on the stock market at the current spot price.

For Example

Assume that an arbitrage fund purchases 1000 shares of XYZ Company for Rs. 10/share at the beginning of May and simultaneously sells 1000 units of January Futures Contract of XYZ Company for Rs. 12. Now there are 2 possibilities; either share price of XYZ Company will increase by the end of May or it will decrease.

Condition 1 – If the share price of XYZ Company increases

Stock Price at expiry (at the end of May) = Rs. 13.

Profit/Loss of the Spot transaction in the stock market = (13-10) x 1000 = (+) Rs. 3000.

Profit/Loss of the Futures transaction in the derivatives market = (12-13) x 1000 = (-) Rs. 1000.

Net profit for the arbitrage fund = 3000-1000 = 2000.

Condition 2 – If the share price of XYZ Company decreases.

Stock Price at expiry (at the end of May) = Rs. 9.

Profit/Loss of the Spot transaction in the stock market = (9-10) x 1000 = (-) Rs. 1000.

Profit/Loss of the Futures transaction in the derivatives market = (12-9) x 1000 = (+) Rs. 3000.

Net profit for the arbitrage fund = -1000+3000 = Rs. 2000.

In the above example, the arbitrage fund remains profitable irrespective of the direction market moves. However, in reality, the difference between the prices of the futures contract and spot transaction may be a lot less which require more transaction to be carried out in a single day to achieve a good return from an average arbitrage fund.

How Arbitrage Funds perform?

Compared to other equity-oriented hybrid funds, arbitrage funds perform well during the market volatility as it creates a difference between the spot price and the futures contract price of equities. However, if the market is less volatile low-risk debt mutual funds may outperform arbitrage funds.

Taxation on Arbitrage Funds:

For the purpose of taxation, arbitrage funds are treated as equity and hence, they are taxed at 15% if redeemed or sold within a year of purchase. If you stay invested in arbitrage funds for more than 1 year, you make long-term capital gains which in excess of Rs. 1 lakh are taxed at the rate of 10% without indexation.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Debt Funds

Debt Funds: Meaning, Working, and Types

In simple words, Debt Funds from a company is their mode of raising funds by borrowing a certain amount from the investor against the promise of paying them a steady and regular interest.

Let’s explore debt funds further.

What are Debt Funds?

Investing in Debt Funds is like giving loan to the issuing entity. A debt mutual fund invests in fixed-interest generating instruments like corporate bonds, government securities, treasury bills, and other money market instruments. As compared to equity mutual funds, they bear a very low risk as they remain unaffected from the market volatility and the issuer pre-decides the interest rate as well as the maturity period. Hence, as an investor, you know the return you will be getting for investing in Debt Mutual Funds.

How do Debt Funds work in India?

Debt Funds in India invest in different fixed-return securities based on their credit ratings. The credit rating of a security act as a parameter to ensure whether the issuer will default in distributing the returns they promised.

It is always recommended to invest in high credit quality instruments as the issuer entity for such instruments are more likely to pay the interest on the security as well as return back the principal amount upon maturity.

Debt Funds which invest in high-rated securities will be less volatile as compared to the low-rated securities. Also, the maturity period depends on the investment strategy and the overall interest rate regime in the country.

It is recommended to invest in long-term securities during the falling interest rate regime while a rising interest rate regime calls for investment in short-term securities.

Who should invest in Debt Funds?

Debt funds aim at optimizing returns by investing in different types of securities. Debt fund often gives decent returns but those returns are not guaranteed.

However, since the returns are already pre-decided by the issuer of the securities, investing in debt funds is safer for conservative investors who are not looking to take many risks with their investment. Unlike equity mutual fund which gives a better return in long-term, debt funds are suitable for those who are looking for fixed returns in short-term or medium-term which ranges from 3 months to 1 year and 3 years to 5 years, respectively.

Short-term Debt Funds:

For a short-term investor, debt funds like liquid funds are a better fit instead of keeping the money in a savings bank account. Liquid funds offer higher returns ranging from 7%-9% along with similar liquidity to meet emergency requirements or short-term goals.

Medium-term Debt Funds:

For those looking to invest neither for a short-term nor for the longer duration, dynamic bond funds can be an ideal fit. As compared to regular 5-year Bank Fixed Deposit, such bond funds offer higher returns.

People looking to earn a regular income from their investments can go with Monthly Income Schemes Debt Funds.

Types of Debt Funds:

There are several types of debt funds suitable for different investors. The basic difference between the debt funds is regarding the maturity period of the instruments they invest in. Let’s take a look at different types of debt funds:

Short-term and Ultra short-term Debt Funds:

These debt funds invest in instruments with shorter maturity tenure, ranging from 1-3 years. Such funds are ideal for conservative investors as the return on investment remains unaffected by interest rate movements.

Liquid Funds:

The maturity of the instruments in Liquid Funds is not more than 91 days. With lowest maturity tenure, they are almost risk-free. As per the trend, liquid funds have rarely seen negative returns. They can be considered as a better alternative to the regular savings bank account as they provide similar liquidity with higher returns. Some mutual fund companies even offer instant redemption on liquid fund investments, which makes it easier for the investor to build liquidity through them.

Dynamic Bond Funds:

When investing in Dynamic fund, the investment portfolio keeps changing the composition of funds as per the changing interest rate regime. Dynamic Bond Funds don’t have a fixed maturity period as it involves different instruments with different maturity tenure from short-term instruments to long-term instruments.

Income Funds:

Just like dynamic bond funds, income funds also consider the changing interest rate and invest in debt securities with different maturity periods but generally, income funds invest in long-term securities. The average maturity of income funds is around 5-6 years which makes them more stable and less risky than dynamic bond funds.

Gilt Funds:

These funds only invest in government securities which are usually high-rated securities with very low credit risk. Since the government rarely defaults on the loan it takes by issuing debt instruments, gilt funds becomes the ideal choice for the risk-averse investors.

Fixed Maturity Plans:

Fixed Maturity Plans (FMPs) invest in fixed income securities like corporate bonds and government securities. All FMPs have a fixed lock-in period for the invested amount. This lock-in period can be in months or years. However, the only way to invest in FMPs is during the initial offer period. FMPs are like fixed deposits that can deliver higher, tax-efficient, but unguaranteed returns.

How to invest in Debt Funds?

With Optymoney Online, investment in Debt Mutual Funds has been made paperless and hassle-free. All you have to do is register for the Karvy Online Investment Account, complete your e-KYC, enter the bank details, choose the investment, period of investment, and mode of investment (lump sum/SIP) and that’s all.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Low Duration Mutual Funds

What are Low Duration Mutual Funds?

Low duration funds are debt funds that invest in short term debt securities, such that the duration of the fund portfolio is between 6 to 12 months. As compared to overnight or liquid funds, low duration funds hold assets of longer maturity and/or lower credit quality; therefore, they have a relatively higher interest rate risk and credit risk.

  1. How do Low Duration Mutual Funds Work?
  2. Advantages of Low Duration Funds
  3. Who Should Invest in Low Duration Funds?
  4. Things to Consider Before Investing in Low Duration Funds
  5. Taxation on Low Duration Funds
  6. How to Find the Best Low Duration Fund
  7. Summary
1. How do Low Duration Mutual Funds Work?

To understand how low duration funds work, it is necessary first to understand the concept of duration. That is because the duration of a fund affects its investment decisions as well as the type and amount of returns earned by it.

What is Duration:

The duration of a debt fund measures how much the fund's value fluctuates in response to changes in market interest rates. Duration is also known as interest rate risk. Therefore, the higher the duration, the more volatile the fund value, and the greater its interest rate risk. Calculating duration is quite tedious and requires a complex formula and detailed data on the fund's investments. For most investors, a good thumb rule is to estimate duration based on the maturity of bonds held by the fund. Funds holding long-maturity bonds have higher durations as compared to funds that hold shorter maturity bonds. If a fund increases its holdings of long-term bonds, the duration of the fund increases, as does its interest rate risk.

Defining Low Duration:

According to SEBI rules, low duration funds have to maintain fund duration between 6‐12 months. This means that low duration funds are likely to invest in short term debt securities only. Thus, low duration funds have relatively low-interest rate risk.

Where do low duration funds invest:

There are no restrictions on the type or credit quality of debt assets to be held by low duration funds. Hence these funds invest in a wide range of securities, including money market securities, government securities, corporate bonds, securitized debt, hybrid instruments like REITs, permitted derivatives, or other mutual fund units.

Sources of Earnings:

Low duration funds earn through interest as well as capital gains from their debt securities. These funds boost interest earnings by holding a part of their assets in bonds with credit ratings of AA or lower, which pay relatively higher interest rates. Remember, lower-rated bonds yield more but also increase the risk of default.

Most low duration funds will take on some credit risk to deliver higher returns. Low duration funds also have the potential to generate capital gains. When interest rates are falling, fund managers will increase exposure to longer maturity bonds in order to push up the value of the fund. The loss of interest income from investing fresh inflows at lower interest rates will be more than made up by the gain in the capital value of existing bonds. Thus, low duration funds use strategies based on credit risk as well as interest rate risk to generate returns.

2. Advantages of Low Duration Funds
Moderate Risk:

Low duration funds carry a moderate level of interest rate risk, as they do not usually hold securities with maturities higher than 1‐1.5 years.

This puts them in a win-win position: when interest rates fall, the loss of interest income on fresh bonds is much lesser than the capital gains on existing bond values. When interest rates increase, the funds cut back on duration to minimize capital losses, while simultaneously earning higher interest rates on new bonds. Thus, the value of low duration funds is less volatile as compared to longer duration funds. Post the 2018 NBFC crisis, credit risk has been a matter of concern for investors, primarily because there are no credit exposure norms for low duration funds. However, most of these funds hold reasonably good quality debt, so the fund category remains suitable for investors with moderate risk appetite.

High Returns:

Low duration funds usually outperform liquid funds because they are allowed to take on greater credit and duration exposure. Low duration funds also have the potential to beat ultra-short duration funds, as they can make higher capital gains by holding longer maturity bonds.

3. Who Should Invest in Low Duration Funds?
Investors with more than 3-month investment horizon:

Low duration funds are ideal for those with an investment horizon of 3 months or higher. Investors with very short investment horizons are better off investing in low risk overnight or liquid funds. However, for holding periods longer than 3 months, low duration funds offer higher returns in exchange for a small increase in risk. Investors can use them for temporary parking of surpluses from the sale of a property, annual bonus, etc., or for accumulating funds towards a short-term financial goal.

Investors who want regular income:

Low duration funds provide regular income through a combination of interest earnings and capital gains. Investors with moderate risk appetite can allocate a part of their portfolio to these funds and use an SWP to create a stream of income flows.

Investors who want an alternative to bank deposits:

Investors with a moderate risk appetite may find low duration funds more attractive than bank deposits as they offer better liquidity as well as have the potential to earn higher market‐linked returns.

Medium to Route investments in Equity Funds:

Low duration funds can be used to hold funds while using an STP to route investments systematically into an equity fund or hybrid fund. While it is more common to use liquid funds as the holding vehicle, investors with a slightly higher risk tolerance can benefit from the higher return potential of low duration funds.

4. Things to Consider Before Investing in Low Duration Funds

There are two main concerns with investing in low duration funds.

First, these funds may have significant exposure to low‐quality debt. A large default can cause fund value to drop sharply, and investors may have to choose between holding their discounted units or selling out at a loss. To avoid this, investors in low duration funds should track the rating profile of the debt portfolio, issuer‐wise exposures, as well as the credentials of the debt issuer.

Second, low duration funds actively manage duration to generate returns; hence, fund values are subject to some volatility. Investors must recognize this interest rate risk and ensure that it matches their risk appetite and goals. For example, it is not a good idea to use low duration funds to park emergency or contingency funds; instead, they can be used to grow funds towards a financial goal in the short term.

5. Taxation on Low Duration Funds

Investors earn dividend income and capital gains from low duration funds. Dividend income is not taxable for investors. However, capital gain, which is the difference between the purchase price and selling price of the units, is taxable. The rate of tax on capital gains depends on how long the investor has held the units of the low duration fund.

Short term Capital Gains Tax:

If an investor holds the units of the fund for up to 3 years, capital gains are considered as short‐term capital gains and taxed at the income tax slab rate applicable to the investor.

Long term Capital Gains Tax:

If an investor sells the units of a low duration fund after holding it for more than 3 years, it is classified as a long-term capital gain. In this case, the investor is allowed the benefit of "indexation," which means that before calculating the capital gain, the purchase price can be increased to adjust for inflation (using an index provided by the Government). In other words, the taxable amount is reduced due to indexation. Long term capital gains are currently taxed at a lower rate of 20%.

6. How to Find the Best Low Duration Fund

A low duration fund should be evaluated in terms of return, risk, and expense ratio.

Return:

Since a low duration fund invests mainly in short term debt, it is appropriate to assess its performance on the basis of 6-month or 1‐year returns. A well-performing low duration fund will earn returns that beat its benchmark as well as the returns earned by comparable peer funds. More importantly, the best performing funds consistently earn good returns. Hence, instead of being impressed by the most recent return number, investors should examine returns generated in previous years to make sure that the fund has regularly performed well.

Risk:

Low duration funds carry both interest rate risk and credit risk. Investors should track the duration of the fund- which is published each month- to evaluate if the fund has increased its interest rate risk. The portfolio composition should also be tracked to judge the credit quality of the fund's bond holdings. If a low duration fund invests a significant part of its assets in lower-rated debt, it faces a higher risk of default, which may not necessarily match the investor's risk tolerance.

Expense Ratio:

The expense ratio is the annual amount charged by a fund for managing the portfolio. The net return to the investor is calculated after subtracting the expense ratio. Low duration funds typically have low expense ratios. However, it is important to keep track of this parameter as it impacts the final investor return. An increase in the expense ratio- either sudden or gradual- needs to be analyzed and understood. The table below shows the top 5 low duration funds ranked by 6-month and 1-year return. Note that there is a difference of 0.42% in terms of 1-year returns between the best and worst-performing funds. This shows that a low duration fund has the potential to outperform its peers using appropriate credit or duration strategies. The six-month returns are absolute returns- which means that they have to be annualized to make them comparable with other savings options. For example, the 6-month return earned by the top-ranked low duration fund is 4.99%, which is approximately equal to an annualized return of 4.99% x 2 = 9.98%. The expense ratios are not widely different for the funds considered in this table, and all are well below 1%. The next level of analysis should be to measure the consistency of returns by tracking 6-month and 1-year returns in previous years.

In addition, the fund portfolio should be checked to evaluate the credit risk of the fund. The monthly fact sheet published on the website of the fund house shows details of the portfolio, including rating of the debt security as well as its share in total assets. The key red flags for a retail investor would be‐ excessive concentration of the portfolio in any one instrument or bond or large exposure to lower-rated bonds. A comparison with portfolio details of peer funds is also a good way to judge if the fund is taking on risks beyond the industry average. Remember, both risk and return features of a fund should be evaluated before choosing a low duration fund to invest in.

7. Summary
  • Low duration funds are debt funds that invest in a range of money market and debt securities such that the portfolio duration is between 6 to 12 months.

  • Low duration funds have a higher interest rate and credit risk as compared to liquid and overnight funds, but they are among the lowest risk funds within the family of duration funds.

  • Low duration funds earn through a combination of interest and capital gains on their debt holdings.

  • By holding a part of their assets in lower-rated bonds, low duration funds can boost their interest incomes. They also actively manage duration to generate capital gains.

  • Low duration funds offer reasonably high returns for a moderate amount of risk. Investors with moderate risk appetite can opt for these funds as an alternative to savings and fixed deposits.

  • Low duration funds are most suitable for investors with an investment horizon higher than 3 months, investors who can accept some risk in return for the potential to earn a regular income, or for use as a medium to route funds into other long-term funds.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Medium Duration Mutual Funds

Best Medium Duration Mutual Funds:

Medium duration mutual funds as the name suggest invests in instruments for a medium time-frame. While the term medium duration is relative and will differ from one investment instrument to another, it is considered to fall anywhere between 3-4 years. SEBI has mandated that medium duration schemes are required to invest in debt and money market instruments such that the Macaulay duration of the portfolio will be anywhere between three to four years.

While some of best medium duration mutual funds may yield good returns, others may not fare as well. Since the definition of duration is flexible, the investment horizon can become subjective depending on the instrument in question and the investment goals of the investor. Generally, investments for a period of less than 1-year are considered short-term, whereas the ones over ten-years are considered long-term investments.

Features of Medium Duration Mutual Fund:

Best medium duration mutual funds are designed to offer an investment opportunity that can help investors meet specific investment goals. These funds are designed to help investors meet 3-4 years goals which might be difficult to achieve with long-term or short-term mutual funds. For e.g., If someone wanted to purchase a car in the next three years, would serve as an investment tool to save the required funds.

These funds allow investors to balance the portfolio and add stability to it. The best medium duration funds are suitable for stable returns since these funds invest in debt and money market instruments and delivered returns in the range of 9-11%. There are several schemes offering the best medium duration fund in India. The aim is to choose wisely and invest in one that meets your objectives.

Taxability:

Medium duration funds in India invest more than 65% of the corpus in debt and money market instruments. Hence, these funds are treated as debt mutual funds for the purpose of taxations. So, if the funds are held for a period of less than 36 months, a short-term capital gain tax as per the income tax slab of the investor will be applicable.

If the funds are held for a period of over 36 months, a long-term capital gain tax of 20% with indexation benefits will be applicable. Dividends received from medium duration funds are tax-free but liable for a dividend distribution tax of 25 per cent.

Any additional surcharges and cess will also be applicable on returns generated from an investment in the medium term mutual funds.

Who Are These Funds Suited For?

Investors looking to invest for a duration of 3-4 years or seeking alternative options for investment other than fixed deposits can invest in medium duration mutual funds. These investments are suitable for risk-averse investors seeking moderate returns without exposing their capital to huge risks. Some of the best medium duration funds in India can generate returns better than the fixed deposits.

Best medium duration funds are ideal for diversification of the portfolio and reducing the overall risk. Some of the best medium duration mutual funds in India invest in debt instrument using a time-tested strategy and after an in-depth research. This ensures that your capital is invested in the right instruments, thereby reducing the risks. Investors across risk profile should hold some medium duration fund in their portfolio.

Major Advantages:

The best medium duration mutual funds are less volatile than the equity-oriented mutual funds and are thus considered a safer option comparatively. The medium duration funds are stable investments with lesser risk and higher potential for a stable return. These funds also offer liquidity enabling the investor to get back the capital with returns in a time span of 3-4 years.

Since the best medium duration funds invest in debt and money market instruments, the chances of getting back the investment in case of default are higher than any investment made in equities of the same company. While even the best medium duration funds of 2019 are subject to interest rate risk, chances of a long-term down cycle are comparatively lesser.

The fact that debt funds invest in government securities, certificate of deposits, corporate bonds, commercial paper, etc. make them a stable investment option. Prospective stakeholders and sponsors can contemplate investing in these medium duration schemes with a limit of a few years.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Dynamic Bond

What are Dynamic Bonds?

Dynamic bond funds are a class of debt mutual funds that alter allocations between short-term and long-term bonds. This strategy helps in taking advantage of fluctuating interest rates. We have covered the following in this article:

  1. What are dynamic bond funds?
  2. Who should invest in dynamic bonds?
  3. Features & benefits of dynamic bond debt funds
  4. How a dynamic bond fund works
  5. Things to keep in mind while investing
1. Dynamic Bond Funds

The dynamic bond schemes, as the name suggests, are dynamic in terms of the composition and maturity profile. The main objective of dynamic bond funds is to provide ‘optimal’ returns in both rising and falling market scenarios. It majorly depends on the fund manager’s decisions and management of the portfolio. These funds generally have huge assets under management (aum), running to a portfolio worth several thousand crores.

Sometimes, there could be a long pause in between interest rate changes. This can take a hit on the income of bond investors. Therefore, these funds are an excellent alternative for those wishing to ride the interest rate cycles. Here, fund managers ‘dynamically’ trade instruments of different maturity periods as per the anticipated change in rates. For instance, during a falling interest rate scenario, a fund manager increases the holdings in long-term instruments like gilts.

2. Who can invest in Dynamic Bond Funds?

The dynamic bond funds are ideal for investors who are not experts in making the right calls based on the interest rate movement. Investors with moderate risk appetite and investment horizon of 3-5 years should invest in these funds.

A SIP (Systematic Investment Plan) approach will work as it allows you to combat the volatility. However, one should always remember that the returns in dynamic bond funds depend mostly on the interest rate movement.

3. Features & Benefits of Dynamic Bonds
Role of Asset Manager

Fund manager’s view of interest rate is exceptionally crucial. As seen with many funds in early 2017, if RBI takes a step contrary to the expectation of the fund manager, profits could be significantly reduced.

Macroeconomic Factors

Factors like oil prices, fiscal deficit, and new government policies could all affect the returns from the dynamic bond funds. One should always stay invested for more extended periods to minimise the short-term risks.

Risk Factors

Like every other instrument, the dynamic bond funds are also exposed to certain risks. These funds are better than the short-term funds because they are unable to use the duration strategy. However, if the fund manager is unable to reduce the portfolio as required, the previous profits earned could be affected.

Tax-Efficiency

Bond fund investors should stay invested for at least three years to receive indexation perks on capital gains. Here, dynamic bonds differ from other debt funds. This is because of a potential shift in the interest cycle that can result in higher tax incidence.

Interest

The price of bonds is inversely proportional to the changing interest rate. So, if the interest rate is increasing, then the cost of the bond will decrease and vice versa. As the interest rates continue to fall, the price of the bonds will rally to the extent based on the remaining maturity. The fund manager may also hold some short-term and medium-term corporate bonds that additionally generate interest income.

Free from usual Debt Fund Mandate

Generally, all debt funds should adhere to its investment mandate. Example, a short-term bond fund can only invest in short-term securities and vice versa. However, dynamic bond funds need not follow this rule. They can invest in long-term securities for one month even. It all depends on the interest rate movement.

4. How a Dynamic Bond fund works

Dynamic bonds can switch from long-term to mid-term to short-term securities quickly. For instance, if the fund house deems that an interest rate cycle is about to fall, it can increase its portfolio tenure. Similarly, if the asset manager thinks that rates have hit bottom, resulting in more significant risks of capital losses on long-term bonds, it can reduce the portfolio’s average maturity in short notice. This way, it can iron out the ‘rate-waves’ more efficiently.

Fund managers continuously trade the bonds of varying maturity based on their expectation of change in the interest rate. For instance, the manager will buy more short and medium-term instruments while reducing the holdings in gilts. He may also increase holdings of high-rated corporate bonds to ensure higher accrual income. This is one of the most significant differences between a gilt fund and the dynamic bond funds. The gilt fund manager can only change the maturity of the funds while remaining invested only in the gilts.

5. Things to keep in mind when Investing in Dynamic Bond Funds

Check if the funds have proven the ability to perform across multiple market scenarios. Assess the performance of the fund over at least five years.

See how the fund managed to limit the downside when interest rates shot up over the last few years.

Investors must go for a mix of income accrual funds for steady returns and dynamic bond funds as an additional income source.

Do not go for dynamic bonds if your investment horizon falls short of three years.

It is advisable to stay away from New Fund Offers (NFO) in dynamic bonds and choose the one with at least 5-year track record.

In short, dynamic bond funds are slightly riskier by debt fund standards. However, they can also deliver higher returns compared to the rest of them. If you find it tedious and difficult to research and choose the most suitable debt fund, you can invest with ClearTax Save. We have done the research and handpicked funds from the top fund houses in the country. Start investing – the entire investment process can be completed under 7 minutes.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Gilt Funds

What are Gilt Funds?

Gilt funds invest in central government and state governments ' fixed-interest bonds. This money goes to building infrastructure and another government spending.

Gilt funds are a form of mutual fund that invests only in government-issued bonds and securities (g-secs). They vary in maturity and are considered a risk-free investment as the money invested is in the government's safe hands. Medium and long-term government securities are chosen for investment, and since the Reserve Bank of India (RBI) decides the interest on the same, it is considered an option for low-risk investment.

How do Gilt Funds work?

When the Indian government needs funds (or loans), it approaches RBI. Besides being the central lender, the RBI also serves the government as the banker. Therefore, after borrowing from other institutions such as insurance companies and banks, the RBI loans money to the government.

In exchange for the loan, the RBI issues fixed-term government securities that are subscribed to by a gilt fund manager. This gilt fund returns securities from the government upon maturity and receives money in return. Gilt funds can be a perfect combination of low risk and fair returns for an investor. The efficiency, however, is highly dependent on interest rate movement. Therefore, the perfect time to invest in Gilt Funds would be a declining interest rate regime.

Taxation on Gilt Funds:

There is no securities transaction tax (STT) that applies to the gilt funds. They are taxed as any other capital gain by investing in debt instruments under the Income Tax Act, 1961. If the investment duration is less than 1 year, your salary will be added to the short term capital gains and taxed according to your income slab. If for more than 3 years, the long term capital gains will be taxed at 20 percent with indexation.

Returns on Gilt Funds:

The gilt fund carries a return based on the RBI fixed repo rate. If RBI does not adjust the interest rate, investing in Gilt Funds will be a good time. The funds offer fair and predictable returns, making it a preferred choice for many to invest.

Gilt funds are capable of yielding up to 12 percent. However, with changes in overall interest rates, returns from Gilt Funds are not guaranteed and highly variable. Therefore, investing in Gilt funds would be advantageous if interest rates fall. Gilt funds are still expected to deliver higher returns than even equity funds when the economy as a whole is facing a recession.

Risk on Gilt Funds:

Gilt funds are the most liquid investments, as they do not bear credit risk, unlike corporate bond funds. The reasoning is that the government is never going to fail to meet its obligations. Gilt funds, however, suffer mainly from interest rate risk. In an increasing interest rate regime, the fund's net asset value (NAV) drops sharply, and this occurs because it leads to a rise in the fund's underlying asset prices.

Investors need to assess their risk appetite before investing and then make an investment decision. The gilt funds are suitable for high security and reasonable return. A gilt fund maturity is lower than other types of mutual funds. The tenure depends on the bond in which you invest. Don't invest in the funds solely because of government security. Make rational decisions and invest only if it fits your investment requirements and helps you reach your financial goals in the long term. Learn about market sentiments and current interest rates before you make your decision and select a fund that has performed well in the x past.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Credit Risk Funds

What is Credit-Risk Fund?

Credit-risk funds investing in lower-rating securities are gaining popularity among investors because there is a potential for double-digit yields for investors.

Credit-risk Fund Meaning:

Credit-risk funds are a type of debt funds that invest approx 65% of the investment corpus in less than AA-rated paper. By taking greater credit risk and investing in lower-rated documents, they produce high returns. Such firms offer greater interest rates and offer a capital gain advantage as and when their ratings move up. The risk of interest in these funds is small because most of them are of a lower duration. Typically, these funds can return 2-3 percent greater than risk-free investments.

How are these funds going to work?

Credit-risk funds make returns on the securities they hold in two ways: first, they receive interest income. Second, since they invest in lower-rated securities, they can create capital gains if the security rating is upgraded.

Taxation of Credit-risk Funds:

Dividends are exempt from tax, but a dividend distribution tax of 28.84% must be paid by the scheme. Returns you earn are subject to short-term capital gains tax within three years of investment. This will be per your income tax slab. After three years, with the advantage of indexing, you are eligible for long-term capital gains tax at 20 percent.

How should a credit risk fund be selected by investors?

Credit risk funds are associated with higher liquidity risk. If a bond with a reduced portfolio rating fails or faces another downgrade, exiting this holding may be hard for the fund manager. In this category, financial planners advise investors to select large-scale funds. Higher assets give more scope for diversifying and spreading risks to the fund manager. Investors should also look at a fund with a lower expense ratio and ensure that the portfolio in any single business group is not concentrated or has high holdings. They should select a fund manager and a fund house with good debt portfolio management experience.

Who is supposed to invest in the credit risk fund?

Despite being a debt fund, credit risk funds come with reasonable risks. For example, the lower-rated papers have also known to be downgraded to expectations sometimes. Investors should remember that these funds feature frequent rise and fall–so this is not for the weak-hearted. Investors looking for a steady income and wanting to minimize the risk factor should stay away from the credit-risk funds. People who belong to the highest tax slab who want to save on taxes can also choose to invest in credit-risk funds. They have to pay a tax on long-term capital gains of just 20% instead of 30%.

Things to consider before investing in Credit-risk Funds

Do not make any credit-related decisions yourself, especially in larger amounts, unless you are market-savvy. Use diversified mutual funds to make these calls.

If you invest in this type of accrual fund, select larger funds at all times. This is because their larger corpus provides them with better scope for diversification and risk spreading.

It can be a good idea to choose a fund with a lower expense ratio, particularly for first-time investors.

Always go with a reputable and experienced fund manager for a fund.

Make sure the portfolio of the fund is not overly concentrated in the securities of any particular group.

Conclusion

Considering the above, if you have the comparatively elevated risk tolerance, you should invest in a credit-risk fund. Choosing a scheme with a large AUM is also a good idea. This will make the system less susceptible to a few big investors' sudden redemptions. The fund should have diversified investments as well as a fund manager with an established track record.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Liquid Funds

What are Liquid Funds?

Liquid funds are debt funds that invest in short-term fixed-interest generating money market instruments. These can be treasury bills, commercial paper, and so on, which mature within 91 days.

  1. How Do Liquid Funds Work?
  2. Types of Money Market Instruments
  3. Who Should Invest in Liquid Funds?
  4. Things to Consider as an Investor
  5. How to Invest in Liquid Funds?
  6. Top 5 Liquid Funds in India
1. How Do Liquid Funds Work?

Liquid funds aim at providing a high degree of liquidity and safety of the capital to investors. For this reason, the fund manager invests in high-credit quality debt instruments. The allocated proportions are as per the fund’s investment objective. The fund manager will ensure that the average maturity of the portfolio is three months.

This reduces the sensitivity of fund returns to interest rate changes. The fund value does not experience a lot of fluctuations. In addition to this, the maturity of the underlying securities is matched with the maturity of the portfolio. It helps to deliver higher returns.

Liquid funds are an excellent option to park your idle money. These are low-risk havens which offer higher returns than a savings bank account. Liquid funds try to emulate the liquidity aspect of a savings bank account. These funds don’t have exit loads. It gives you the freedom to withdraw funds as per your convenience.

2. Types of Money Market Instruments

As a liquid investor, you should know the following money market instruments:

Certificate of Deposit (CD)

These are time deposits such as fixed deposits offered by scheduled commercial banks. The only difference between FD and CD is that you cannot withdraw CD before the expiry of the term.

Commercial Paper (CP)

Commercial papers are issued by companies and other financial institutions that have a high credit rating. Also known as promissory notes, commercial papers are unsecured instruments issued at the discounted rate and redeemed at face value. The difference is the return earned by the investor.

Treasury Bills (T-bills)

T-bills are issued by the Government of India to raise money for a short-term of up to 365 days. These are the safest instruments as the guarantee of the government backs these. The rate of return, also known as the risk-free rate, is low on T-bills as compared to all other instruments.

3. Who Should Invest in Liquid Funds?

Liquid funds are meant for those having substantial idle cash and are looking for short-term investment havens. Instead of parking your surplus funds in a savings bank account, you can invest them in a liquid fund. Excess funds include performance-based incentives, bonus, and other relevant gains made by selling capital assets.

Liquid funds can be used as a medium to invest in equity funds. You may initially invest the money in a liquid fund and then do a systematic transfer to an equity fund of your choice over a specified period. In this way, you would save yourself from placing large bets all of a sudden into equity funds.

4. Things to Consider as an Investor
Risk

The risk in mutual funds relates to fluctuations in net asset value (NAV). For liquid funds, the NAV doesn’t fluctuate too frequently as the underlying assets mature within 60 days to 91 days, and this prevents the fund NAV from getting impacted significantly by the fluctuations in the underlying asset price. However, the fund value might drop suddenly on account of a sudden downgrade of the credit rating of the underlying security. In simple words, liquid funds are not entirely risk-free.

Returns

Historically, liquid funds have been found to generate profits in the range of 7% to 9%. It is way higher than the mere 4% returns obtained on a savings bank account. Even though the returns on liquid funds are not guaranteed, more often than not, they have delivered positive returns upon redemption.

Cost

Liquid funds charge a fee to manage your investment called expense ratio. SEBI has mandated the upper limit of expense ratio to be 1.05%. Considering the hold till maturity strategy of the fund manager, liquid funds maintain a low expense ratio to offer comparatively higher returns over a short term.

Investment Horizon

Liquid funds are exclusively meant to invest surplus cash over a short period say, up to three months. Such short-horizon helps to realise the full potential of the underlying securities. In case you have a longer investment horizon of up to one year, then you may consider investing in ultra-short-term funds to get relatively higher returns.

Financial Goals

If you want to create an emergency fund, then liquid funds can prove to be very useful. In addition to receiving higher returns, these will also help you to take out your money quickly in case of emergencies.

Tax on Gains

When you invest in debt funds, you earn taxable capital gains. The rate of taxation depends on how long you stay invested in a debt fund. The duration over which you stay invested is known as the holding period. Gains made in the first three years is known as short-term capital gains (STCG). Capital gains made over three years or more is known as long-term capital gains (LTCG).

5. How to Invest in Liquid Funds?

Investing in liquid funds is made paperless and hassle-free at ClearTax. Using the following steps, you can start your investment journey:

  • Sign in at cleartax.in
  • Enter your details, such as the amount and period of investment.
  • Complete your e-KYC; it takes no more than than 5 minutes.
  • Invest in the most suitable fund from amongst our hand-picked mutual funds.
6. Top 5 Liquid Funds in India

While selecting a fund, you need to analyse the fund from different perspectives. There are various quantitative and qualitative parameters, which can be used to arrive at the best liquid funds as per your requirements. Additionally, you need to keep your financial goals, risk appetite, and investment horizon in mind.

The following table represents the top five liquid funds in India based on the past year returns. Investors may choose the funds based on a different investment horizon like five years or ten years returns. You may include other criteria such as financial ratios as well.

Fund name 1-year return
Aditya Birla Sun Life Liquid Fund Growth 7.49%
Axis Liquid Fund Growth 7.47%
UTI Liquid Fund – Cash Plan Growth 7.47%
ICICI Prudential Liquid Fund Growth 7.40%
L&T Liquid Fund Growth 7.37%

*The order of funds doesn’t suggest any recommendations. Investors may choose the funds as per their goals.

Why invest with Optymoney

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
fund house img
Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
fund house img
Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
fund house img
Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
fund house img
Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
fund house img
Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
fund house img
Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
fund house img
Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
fund house img
DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
fund house img
DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
fund house img
Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%

Ultra Short Funds

What are Ultra Short Funds?

Ultra short-term mutual funds are those funds that invest in fixed-income earning instruments of maturities up to six months.

  1. How do Ultra Short-term Mutual Funds work?

  2. Who should invest in Ultra Short-term Mutual Funds?

  3. Things to Consider as an Investor.

  4. How to invest in Ultra Short-term Mutual Funds?

1. How do Ultra Short-term Mutual Funds work?

Ultra-short-term funds can be likened to be close cousins of liquid funds. These funds offer more liquidity than any other class of funds with long investment horizons. According to the rules set by the Securities and Exchange Board of India (SEBI) for liquid funds, it has been decided that such funds can invest only in securities that mature no longer than 91 days. However, these rules do not apply to ultra short-term bond funds.

These bonds can, therefore, invest in securities that mature both before or after 91 days. Typically, the investment horizon for these ultra-short-term funds ranges from a week to about 18 months. Hence, if you have surplus funds that you wish to park for 1 month to 9 months and earn some dividends from, then this investment vehicle can be the one you are looking for.

2. Who should invest in Ultra Short-term Mutual Funds?

Experts suggest that ultra short-term funds should be used by investors for both short-term investment needs as well as for systematic transfer plans (STPs), in place of liquid funds. Say you wish to invest a lump sum amount in an equity fund. Now, instead of putting all your cash in the equity fund in a one-time lump sum, it is advisable that you invest in an ultra short-term fund (belonging to the same fund house). You can then give instructions to switch a regular sum every month to your equity fund.

This way, you get two benefits: your money will lie in an ultra short-term fund which offers high liquidity, and will also earn slightly higher dividends than a regular liquid fund.

3. Things to Consider as an Investor
Risk

Unlike other debt funds, the ultra short-term debt funds are somewhat immune to interest rate risks because of the short maturity of their underlying assets. However, as compared to liquid funds, these funds are pretty risky. The investment strategy of the fund manager may introduce credit risk when he incorporates low-credit rated securities in the expectation of an upgrade in future. Moreover, the introduction of government securities may increase the volatility of the fund more than expected.

Return

An investor can expect returns of around 7% to 9% from ultra short-term funds; given that every other factor falls into place. If you compare this return rate with the different fund categories, then you will see that these returns are somewhat higher than what a liquid fund, for instance, can earn you over the same one to nine-month time horizon. Even though these funds are fixed-income havens, they don’t offer guaranteed returns. The Net Asset Value (NAV) of these fund tends to fall with a rise in the overall interest rates in the economy. Hence, they are suitable for a falling interest rate regime.

Cost

Ultra short-term funds charge a fee to manage your money called an expense ratio. SEBI has mandated the upper limit of expense ratio to be 1.05%. Considering the overall returns generated by these funds as compared to liquid funds, a long-term holding period and lower expense ratio will help to recover the money gone out by way of interest rate fluctuations.

Investment Horizon

Ultra short-term funds earn from the coupon of short-term instruments. The prices of these securities may change on a day-to-day basis and have a relatively longer maturity. These are much more volatile than liquid funds, and a short time frame may seem inadequate to generate sufficient returns. As compared to liquid funds, you need to hold these funds for comparatively longer horizon owing to a higher average maturity of the underlying securities.

Financial Goals

You may use these funds for a variety of purposes. If you need to park money for a period of three months to a year, then these funds may come handy. Additionally, you may want these to transfer your funds to a riskier option such as equity funds. Invest a lump sum in these funds and initiate a systematic transfer plan (STP) to equity funds. You may look at them as an additional haven to be used as an emergency fund. If you need monthly income, then invest a portion of your superannuation portfolio in these and initiate a systematic withdrawal plan (SWP).

Tax on Gains

When you invest in these funds, you may earn taxable capital gains. The rate of taxation is calculated based on how long you stay invested in this fund called the holding period. Capital gains made within three years is known as a Short-term Capital Gain (STCG). Capital gains earned over three years or more is known as Long-term Capital Gains (LTCG).

STCG from these funds are also added to the investor’s income and taxed according to his income slab. LTCG from these funds is taxed at the rate of 20% after indexation and 10% without the benefit of indexation.

4. How to Invest in Ultra Short-Term Mutual Funds

Investing in ultra-short-term mutual funds is made paperless and hassle-free at ClearTax.

Using the following steps, you can start your investment journey: Step 1: Sign in at cleartax.in Step 2: Enter all the requested details Step 3: Get your e-KYC done, it can be completed in just 5 minutes Step 4: Invest in the most suitable fund from amongst the hand-picked mutual funds

Why invest with Optymoney

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Top 10 Equity Mutual Funds

Fund Name Category Risk 1Y Returns Rating Fund Size(in Cr)
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Axis Long Term Equity Fund Equity Moderately High 0.3% 5 ₹21,836
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Canara Robeco Emerging Equities Equity Moderately High 11.6% 5 ₹5,987
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Canara Robeco Equity Tax Saver Equity Moderately High 14.1% 5 ₹1,181
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Axis Bluechip Fund Equity Moderately High 3.6% 5 ₹17,270
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Aditya Birla Sun Life India GenNext Fund Equity High 0.4% 5 ₹1,535
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Invesco India Mid Cap Fund Equity Moderately High 13.1% 5 ₹1,005
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Mirae Asset Tax Saver Fund Equity Moderately High 11.8% 5 ₹4,270
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DSP Midcap Fund Equity Moderately High 13.3% 5 ₹8,274
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DSP Natural Resources and New Energy Fund Equity High -8.7% 5 ₹301
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Quant Tax Plan Fund Equity Moderately High 25.7% 5 ₹17
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%
Canara Robeco Emerging Equities Fund Direct Growth

Fund Performance: This fund has given 5.32% annualized returns in the last three years. In the last year, its returns were 11.61%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 11.61% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt ₹5,000
AUM ₹5,987Cr
1Y Returns 11.6%
Axis Long Term Equity Direct Plan Growth

Fund Performance: This fund has given 7.27% annualized returns in the last three years. In the last year, its returns were 0.34%. It has continually hit its benchmark in the Equity segment.

Why to invest: It is one of the most remarkable Equity mutual funds in India. This fund has constantly outperformed other similar funds, providing 0.34% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt ₹500
AUM ₹21,836Cr
1Y Returns 0.3%