Which are the top mutual funds in India for 2013-2014? Which is the best mutual fund in India? Its very difficult to answer these questions as we need to keep reviewing the performance of top mutual funds in India. We have tried to compile a list of top mutual funds, top 5 equity mutual funds and top 4 debt mutual funds in India.
”Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing’’.
We are hearing such warning statements in all mutual fund advertisements. SEBI is planning to label all mutual fund schemes in different colours as per the level of risk involved in these schemes. Still it makes sense to invest in top mutual funds in India?
Yes, if you are investing for long-term goals, SIPs in top mutual funds will be an ideal way to create wealth. For short-term goals, you may do it through debt mutual funds which are very tax-friendly compared to bank deposits.
Top Mutual Funds in India – Equity Funds
Given below are the Top 5 Mutual Funds in India which is having more than 10 years of performance record.
- HDFC Top 200 Equity Fund
- HDFC Equity Fund
- DSPBR Top 100 Equity Fund
- ICICI Prudential Dynamic Fund
- Franklin India Bluechip Fund
Please see the following chart below showing the 10-year return (CAGR) of select top mutual funds in India.
The average 10-year CAGR of the above Top 5 mutual funds is around 27%. It is uncertain that these funds will perform in the same way in the future. We cannot drive a vehicle looking only at the rear view mirror. Also look at the 5-year return. The average for these 5 funds is around 10%. Please note that the 5-year period here is from March 2008 to March 2013, where there was no growth in Sensex and Nifty. Still these funds have done better.
Top performing Equity Mutual Funds with less than 10-year track record
You can consider the following 5 funds also. They are also consistent performers. The first 3 funds are Mid & Small Cap Funds, while the last 2 are Large & Mid Cap Funds.
- ICICI Prudential Discovery Fund
- Reliance Equity Opportunities Fund
- IDFC Premier Equity Fund
- UTI Opportunities Fund
- UTI Dividend Yield Fund
Top Mutual Funds in India – Debt Funds
Debt Mutual Funds carry less investment risks compared to Equity Mutual Funds and are attractive for investing for short-term goals. Such funds are tax-friendly because you can pay tax after applying indexation benefits. With high rates of inflation in the country, you can almost avoid paying any tax on the capital gains from debt mutual funds.
Please see the Top 4 performing debt funds and their past performance.
If RBI reduces the interest rates further, the debt funds will give better returns. This is because the value of bonds and interest rates are having an inverse relationship. But if you are not sure that the interest rates will fall further, dynamic bonds will be a better option.
From 1st Jan., 2013 you have the option of Direct Plans in mutual funds. These plans will give you better returns in the long run, because there is no agency commission involved in it. You can buy the direct plan through the website of the mutual fund company or by visiting the office of the Fund House, Registrars like CAMS or Karvy.
You may select 2-3 Large Cap/Mid Cap Funds and 1-2 Debt Funds and invest according to your goals. Invest through the SIP route to spread your investment and average out your cost. If you have a lump sum to invest, go through the STP route. “Top mutual funds in India“ have given superior returns than any other investments in the past. By carefully selecting good mutual funds, you can also accumulate wealth.