Selecting the best mutual funds amongst the hoards of several mutual funds in the marketplace is a tedious task. However, choosing your best mutual fund for long term investment is not easy. There are various financial websites, blogs, financial advisors who will advise you on several parameters to rate the mutual funds. But if you consider the below-mentioned parameters, you could be harnessing the benefits from your chosen mutual funds.
- There are several mutual funds whose rankings are based on the CRISIL and Value Research Online. CRISIL assigns ranking on the classification such as Rank 1(good) to Rank(5) worst. Similarly, Value Research gives the rating on the basis such as 1-Star(worst) to 5-Star(good). Choosing the funds which have CRISIL 1 to 3 ranking and Value Research 5 star to 3-star rating is good. If you can see both these ratings for a mutual fund scheme and then decide, it could be your winning mutual fund.
- Invest on the basis of your risk taking appetite and time horizon. Longer the investment, the more potential it has for giving you better returns. It is better to stay invested from 5 to 10 years time horizon. Also, your risk-taking appetite should be classified in terms of high-risk, medium-risk and low-risk appetite.
- High-risk appetite investors prefer to invest in large cap funds, mid-cap funds, global funds, sector funds, etc. These are high-risk mutual funds, but give higher returns if invested in the long run.
- Medium-risk appetite investors prefer to invest in large cap funds, hybrid funds, debt funds etc.
- Low-risk investors prefer to invest in hybrid funds and debt funds.
- Select a better performer fund. Always check whether your fund is a consistent performer i.e. performing well in 1-year, 3-years and 5-years time. This ensures the regularity in giving you returns.
- Invest in that Asset Management Company(AMC) which has its Assets Under Management(AUM)>100 crores. AUM denotes the number of investors invested in a mutual fund scheme. Higher AUM indicates the maximum number of investors in a mutual fund scheme and lower AUM states a lesser number of investors so, ignore or avoid investing in such schemes. However, the new mutual funds having lesser AUM are yet to prove their potential in the stock market and thereby generating investors confidence.
Let’s see the classification of top 10 mutual funds which are picked on the basis of:
- their highest performance in the last 5 years
- CRISIL ranking and VRO rating as higher ranking/rating indicate better fund performer as compared to its various peers in stock market cycles.
- the net worth of a mutual fund company whose net assets are worth more than 100 crores.
List of Top 10 Mutual Funds :
Mutual Fund Scheme Category Crisil Rank Assets Under VRO Management Rating
Birla Sunlife Top 100 Fund Equity-Large Cap 2 ₹ 2,393 crore 5
SBI Bluechip Fund Equity-Large Cap 1 ₹ 10,934 crore 5
Birla Sunlife Equity Fund Equity-Multi Cap 1 ₹ 3,770 crore 5
ICICI Prudential Value Equity-Multi Cap 2 ₹ 15,588 crore 5
DSP Black Rock Tax Saver Fund Equity : Tax Planning 1 ₹ 1,725 crore 5
L&T Infrastructure Fund Equity: Infrastructure 1 ₹ 268 crore 4
Birla Sunlife Monthly Income Hybrid: Debt Oriented
Plan-II Wealth 25 Plans Aggressive 1 ₹ 1,540 crore 5
Franklin India Low Duration Fund Debt: Short Term 2 ₹ 2,667 crore 5
Indiabulls Liquid Fund Debt: Liquid 1 ₹5,386 crore 5
ICICI Prudential Long Term Gilt Fund Debt : Gilt 3 ₹ 2,119 crore 3
On the basis of Returns
Scheme Name 1 Year(%) 3 years(%) 5 years (%)
Birla Sunlife Top 100 Fund 30.25 21.60 16.68
SBI Bluechip Fund 24.40 22.41 18.11
Birla Sunlife Equity Fund 43.11 28.55 19.88
ICICI Prudential Value 27.72 28.58 20.96
DSP Black Rock Tax 37.69 26.15 19.28
L&T Infrastructure Fund 47.01 32.53 16.42
Birla Sunlife Monthly Income 23.05 16.73 13.12
Plan-II Wealth 25 Plans
Franklin India Low Duration Fund10.70 9.96 9.90
Indiabulls Liquid Fund 7.73 8.39 8.79
ICICI Prudential Long Term Gilt Fund16.79 12.53 9.19
Last but not the least, your investment on any of the above mutual fund scheme should be based on your financial goal, the essential criterion which determines the potential of generating higher returns from the scheme. You are advised to go through the objectives of your shortlisted mutual fund schemes in order to be focussed in selecting the right mutual fund scheme for yourself.