Top 5 Mutual Funds Companies in India 2022

Top 5 Mutual Funds in India 2022

Date: 08 Nov, 2022

Author: Ashish Kumar

If you are looking to buy mutual funds for earning excellent returns, I have compiled a list of top 5 mutual funds in India. In the subsequent sections, I will discuss top 5 mutual funds in India which have been selected after extensive research. As interests on fixed deposits have decreased the retail investors are now searching for financial instruments for earning decent returns.  As you might be aware the internet is saturated with infinite lists of mutually funds. Mostly, they are randomly selected without any basis. And, I can definitely say that around 95% lists are random. At the very best, they will be based on their performance.

My story into finance started when I opted for commerce after 12th class. After finishing B.com, I joined as a trainee accountant with a leading oxygen generation plant company in India. The company had an investment department headed by the chief accountant. After a few months, the chief also included me in the investment arm. It is during this that I learned a great deal about investing principles. Every month the department would also make investments in mutual funds. Here I was learning the practical side of investing. We categorized mutual funds and then selected the top ones on the bases of many factors.

Before discussing top 5 mutual funds in India, it is imperative that you learn a few basic concepts about mutual fund investing. Working as an accountant at the leading cryogenic air separation plant manufacturing company in India, I learned all the relevant details about investing in equity, commodities, currency, ETFs and mutual funds. However, I would like to add that investing is simple in whichever financial instrument you would like to invest. Yet, it is prudential for retail investors to invest in mutual funds.

What Is a Mutual Fund? 

A mutual fund is an amazing investment instrument that takes money from retail investors and pools it together. It is then invested in different asset classes such as equities, bonds, money market and debt.  Each mutual fund scheme states its financial goals. Entity managing the fund and investing the fund on behalf the investors is known as an Asset management company (AMC).

Read Also: What are the Benefits of Having a Brokerage Account?

What is AUM in mutual fund?

On reading about any mutual fund scheme, it is likely that you must have heard the term AUM. It stands for Asset under Management denoting gross value of investment under its management. In simple terms, you can understand it as the total money under the management of the fund. And, the value is made up of investments done in equities, bonds, commodities, ETFs and other financial instruments.

What is NAV?

Net Asset a Value (NAV) defines total value of market securities held in a mutual fund scheme. It is a measure of performance of a fund scheme. Mutual funds pool the money of investors and then invest in different market securities. NAV of a fund is calculated by dividing the total assets by its total number of outstanding shares.  When the value of shares or securities in the fund increases, the value of NAV also increases and vice versa. However, you must remember that NAV also declines when the pays out dividend.

Top 5 Mutual Funds in India:

SBI Contra Fund – Direct Plan – Growth:

It is a top contra fund which invests 75.52% of its vale in equities the rest in debt and government securities. It is an ideal fund for investors with good knowledge of broad economic indicators wanting to earn higher returns. However, the investors must be ready to tolerate medium to high risk even while the broader market is doing better.

IDFC Tax Advantage (ELSS) Fund – Direct Plan – Growth:

It is the best ELSS fund with NAV of Rs 108.552 with a lock-in period of 3 years. It is a wonderful fund scheme for salaried individuals looking to invest money for three years with decent returns besides offering tax saving benefits. Like all market securities, it is also subject to market risks.

The fund invests 92.9% of its money in the domestic market most in equities. Around 49.12% of the investments are made large cap companies followed by 12.64% in mid cap stocks and 21.12 in small cap stocks.  However, you not forget the lock-in period of 3 years from the date of purchase. Moreover, the investment will be subject to long term capital gain tax on selling it after 3 years.

Presently, the long term capital gain tax is 10% if your gains are in excess of Rs 1lakh in a financial year. But you can claim deduction on your taxable income under Section 80c.

HDFC Flexi Cap Fund – Direct Plan – Growth:

It is the most popular and recommended Flexi Cap Fund for investors. It is advised that the investors must be willing to park their money for at least 3 to 4 years for earning high returns. At the same time, they must be able to tolerate moderate to medium level risk.

Also Read: How Do I Start Trading Forex – A Review by Experts

The fund holds around 92.8% of its money in domestic equities including 70.34% in large cap with 8.51% in mid cap and the remaining in the small cap companies.

Quant Focused Fund – Direct Plan – Growth:

It is one of the best performing Focused Fund reputed for delivering excellent returns. However, it is meant for investors with sound understanding of economic indicators. It needs no elaboration that investors must be ready to accept to bear medium to high level of risk.

The fund parks most of its money in the domestic equity holding around 89.2% in the large cap and 3.8% in mid cap companies.

Canara Robeco Small Cap Fund – Direct Plan – Growth:

Amongst the Small Cap Funds, it is considered the best on multiple variables of performance. But the investors have a horizon of 3-4 years for getting high returns. On the other hand, the investor must the ability to bear small to medium level losses.

The small cap fund invests in 73 stocks with major portion of investment in small cap totaling around 56.28%. Around 16.98% of investment is made in mid cap and 3.55% in large cap companies.

By Ashish Kumar

I have 9 years of experience in digital marketing and I love writing content. I have written content for blogs, articles, company website, brands. I

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