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Best Mutual Funds to invest in 2018 : Best Equity Mutual Funds, Best ELSS Mutual Funds, Best Large Cap Mutual Funds, Best Mid Cap Mutual Funds, Best Small Cap Mutual Funds, Best Multi Cap Mutual Funds, Best Balanced Mutual Funds based on 1,3 and 5 year returns


It's a new financial year & time to re-look at the investment portfolio. Mutual funds investment is a tool for long term wealth creation & we should consistently review the returns given by these schemes. 


Keep a track for half-yearly & yearly returns basis the stock market scenario. We should also not be switching funds very frequently if returns are not good for few months. There may be a case where fund manager has changed the style of investing & we should give atleast 2 years to evaluate & decide the future action. 


Lets get some positive vibes back & have a look at the best performing equity & debt funds.

These funds are not only selected based on the 3Y & 5Y returns, but also given the portfolio they manage & the thoughtful thinking of the fund managers. We very frequently track most of these fund managers interviews & identify their point of views on the current & future market conditions, their style of investing.

Financial Goal

Before you jump onto any of these funds, have a proper financial goal. We don't get into execution of any project before setting up a proper plan - it's the same with investing in a mutual fund. Before you start investment you should define these two criteria's - HOW MUCH & BY WHEN?

If your goal target date is less than 5 years - Your investment ideally should be 50:50 in debt(or arbitrage) and equity mutual funds. The equity mutual funds category needs to have a high percentage allocation in Large cap funds which invest in well-established blue-chip companies.

If your goal target date is between 5 to 10 years - Your investment ideally should be 30:70 in debt(or arbitrage) & equity mutual funds. The equity funds can have a mix of large cap, mid & small cap funds and balanced funds. Mid & small cap segment has a high potential to deliver better than expected returns when invested for long term (remember 2017 when many small & mid cap funds return were in the range of 40-50%?). Reason why i suggest 30% debt allocation is looking at the crash of 2008, it took almost 4 years for the market to recover from the shock & get back to the pre-crash levels. Hence, debt funds give a sense of security when equity isn't performing well. Also, you can choose to invest in multi- cap funds which split the allocation across each categories basis market conditions. 

If your goal target date is more than 10 years - Looking at the historical data. No investor would have ever lost money if he/she is a serious long term investor. You could choose to have entirely equity driven funds in your portfolio if you are an aggressive investor. For conservative investor who want to play very safe they can have 15-20% allocation in debt funds. 

Best Large-Cap equity mutual funds for 2018 -
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Mutual Fund Name1Y Return %3Y Return %5Y Return %
Kotak Select Focus Fund – Direct Plan12.89%13.13%22.67%
JM Core 11 Fund – Direct Plan16.53%14.69%21.93%
Invesco India Growth Fund – Direct Plan23.49%12.42%21.16%
SBI BlueChip Fund – Direct Plan13.83%10.98%19.77%
Mirae Asset India Equity Fund – Direct Plan14.60%12.39%22.05%

Best Mid-Cap equity mutual funds for 2018 -
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Mutual Fund Name1Y Return %3Y Return %5Y Return %
Mirae Asset Emerging Bluechip Fund - Direct Plan14.94%18.81%31.85%
Canara Robeco Emerging Equities Fund - Direct Plan19.14%17.31%31.56%
L&T Midcap Fund - Direct Plan21.12%18.50%31.06%
Aditya Birla Sun Life Pure Value Fund - Direct Plan21.32%18.72%30.69%
Edelweiss Midcap Fund - Direct Plan26.75%14.84%29.46%

Best Small-Cap equity mutual funds for 2018 -

Mutual Fund Name1Y Return %3Y Return %5Y Return %
SBI Small & Midcap Fund - Direct Plan39.46%26.46%38.05%
Reliance Small Cap Fund - Direct Plan29.51%23.75%37.48%
Franklin India Smaller Companies Fund - Direct Plan16.74%16.87%31.60%
L&T Emerging Business Fund - Direct Plan29.09%23.11%-
Aditya Birla Sun Life Small & Midcap Fund - Direct Plan18.27%20.44%29.15%

Best Multi-Cap equity mutual funds for 2018 -

Mutual Fund Name1Y Return %3Y Return %5Y Return %
Motilal Oswal Multicap 35 Fund - Direct Plan18.61%16.63%-
DSP Blackrock Opportunities Fund - Direct Plan12.31%12.66%20.50%
SBI Magnum Multicap Fund - Direct Plan15.13%12.69%21.49%

Best Balanced mutual funds for 2018 -

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Mutual Fund Name1Y Return %3Y Return %5Y Return %
HDFC Balanced Fund - Direct Plan14.48%11.75%20.89%
L&T India Prudence Fund - Direct Plan13.67%11.55%20.77%
ICICI Prudential Balanced Fund - Direct Plan13.08%12.48%20.04%
SBI Magnum Balanced Fund - Direct Plan16.30%10.36%19.57%


Best Equity Linked Saving Scheme(ELSS) Tax Saver mutual funds for 2018 -

Mutual Fund Name1Y Return %3Y Return %5Y Return %
Aditya Birla Sun Life Tax Relief 96 - Direct Plan21.32%13.28%24.22%
Axis Long Term Equity Fund - Direct Plan20.06%10.70%25.14%
BOI Axa Tax Advantage Fund - Direct Plan32.84%14.28%22.47%
IDFC Tax Advantage ELSS Fund - Direct Plan25.60%13.29%23.55%

*Return % is calculated at the time of writing this blog (based on NAV's as on 3rd April, 2018). Added balanced funds - NAV's as on 16th April, 2018

Mutual funds as an investment instrument has been gaining popularity over the years, thanks to the wide range of options available and the ease of KYC process. To know more about them, check out The Mutual Funds Sahi Hai campaign, launched by The Association of Mutual Funds in India (AMFI) at www.mutualfundssahihai.com

Share your thoughts in the comments section below!!

25 comments:

  1. Please add which balanced funds are good for 2018

    ReplyDelete
  2. Thanks for sharing your interest in Balanced funds. We have updated the list of best performing equity oriented balanced funds for investment based on 1, 3 & 5 year returns. Let us know in case of any further questions.

    Regards,
    Mutual Funds Wiki Team

    ReplyDelete
  3. Thank you! Any suggestions on Liquid or Debt funds?

    ReplyDelete
  4. This article is more specific to Equity oriented funds. We are currently evaluating best debt funds for investment & will be out with a new post soon. Keep watching the space :)

    Regards,
    Mutual Funds Wiki Team

    ReplyDelete
  5. Your Comments on Dsp small and Mid cap Fund.?
    I have invested since a year now in this fund by dumping 8k and 5k in Dsp opportunities fund.Your comments plz.

    ReplyDelete
    Replies
    1. We understand most of the mutual fund SIP's started since an year back, specially in the small & midcap space had turned red during the market fall & has given negligible returns since then. Whenever you invest in small & midcap funds - ensure that you have a investment horizon of atleast 7-10 years which will help you accumulate multi fold gains.

      Small & Mid cap funds are usually volatile & even at the index level the recent fall was 15-20% as compared to Nifty50 fall of 10-11% from the highs.

      Although, the funds that you have chosen have given bright returns in the past - it is always recommended that you diversify your investments across different fund houses. Different mutual fund schemes under same fund houses can have similar investment style & you may miss out on some of the returns in such a scenario. You can choose from the best funds across difference categories from the article.

      Regards,
      Mutual Funds Wiki Team

      Delete
  6. what is the methodology for selection of above funds?

    ReplyDelete
    Replies
    1. Quote from the article above.

      "These funds are not only selected based on the 3Y & 5Y returns, but also given the portfolio they manage & the thoughtful thinking of the fund managers. We very frequently track most of these fund managers interviews & identify their point of views on the current & future market conditions, their style of investing."

      Delete
  7. Instead of doing part payment of ongoing home loan considering the past 5-6yrs record of M. F, is it wise to invest the same amount in balance fund (icici pru balance fund) via sip for 5 - 6 yrs redeem it and pay the remaining home loan amount ?kindly advise

    ReplyDelete
    Replies
    1. I like your point of view. Considering you are paying around 9% interest on home loan & instead of part paying you would want to invest in a scheme which usually pays 12-14% YoY & then part pay the loan after 5-7 Years.

      But, ideally in an investment scenario - recommendation would be that investments & liabilities are treated mutually exclusive. Don't try to mix these up. Here is the reason why - Equity markets sometimes tend to be quite volatile & are expected to be very volatile for next 1-2 years considering Lok Sabha elections. If there is a sudden fall in the markets by lets say 20-25%, will you as an investor still stay invested? If your investments form a part of your liabilities, you might not have the patience to wait for longer term & fear might be a catalyst to sell your portfolio.

      Hope this would have answered your question.

      Delete
  8. Because of the consolidation of some schemes within the AMC, please provide view on updated MF schemes in coming months.

    ReplyDelete
    Replies
    1. Yes, we are studying consolidated schemes & will be back with an update soon.

      In the meantime, we recommend that you continue the SIP's into existing schemes. Many fund houses had multiple schemes for each category of funds, which SEBI has now asked to consolidate. Hence, fundamental of the schemes would remain the same.

      Delete
  9. Hi..im completely new to mutual fund investment..have absolutely no knowledge..could you pl guide

    ReplyDelete
    Replies
    1. Hi Abhishek,

      Good to know that you have decided to make investments into mutual funds. Learn the basics by reading the below posts -

      https://www.mutualfundswiki.com/2018/04/how-does-my-investment-grow-in-a-mutual-fund.html
      https://www.mutualfundswiki.com/2018/04/mutual-fund-terminologies-you-must-know.html
      https://www.mutualfundswiki.com/2018/03/sip-magical-recipe-for-financial-success.html
      https://www.mutualfundswiki.com/2018/04/how-to-diversify-mutual-fund-portfolio.html
      https://www.mutualfundswiki.com/2018/05/are-mutual-funds-right-for-me.html

      These should be good to get you started!!

      Regards,
      Mutual Funds Wiki Team

      Delete
  10. i need to invest in 5k in largeCap, 5k in midCap, 5k in smallCap, 5k in multiCap. So should i pick 2 funds from each category? or 3 funds.

    ReplyDelete
    Replies
    1. Hi Nitin,

      It's good that you have defined the portfolio based on your investment profile.

      One quick suggestion, if you are investing in each of the large,small & midcap categories - you don't need to further diversify into mutlicap category. You could choose to invest some portion into debt or arbitrage funds. Read more here - https://www.mutualfundswiki.com/2018/04/how-to-diversify-mutual-fund-portfolio.html

      And since you have very high percent allocation into equities - specially mid & small cap, i assume you should have defined your horizon of atleast 7 years. And always invest through monthly SIP's. Read here - https://www.mutualfundswiki.com/2018/03/sip-magical-recipe-for-financial-success.html

      The more time you give to your investments, the better it is for compounding.

      Regards,
      Mutual Funds Wiki Team

      Delete
  11. Hi, I have onvested in below 6 fund through SIP . All are direct growth
    Time horizong 15 to 20 years minimum.
    1..Mirae asset bluchip.
    2...reliance small cap
    3...sbi small cap
    4....hdfc small cap
    5....aditya birla pure value
    6...LnT emerging fund.

    Kindly review my portfolio nd let me know if any changes required. Please.

    ReplyDelete
  12. Don't GO by the PAST return. Past return does not guarantee future's. Need to investigate the risk profile of each of the fund and risk appetite of Individual. As for Example, JM Core 11 Fund – Direct Plan out of all Large Cap, it Riskiest Fund. So guys do not simply go by the list, understand the Risk associated with it.

    ReplyDelete
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    ReplyDelete
  14. i had invested in Franklin india focussed equity in 2015-16 through SIP for 12 months and then i discontinued. I still have that fund and havent redeemed yet. Should i continue holding it or can i redeem the whole amount matured?

    ReplyDelete
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