Last Updated on 25/12/2023 by Deepak Singla
Mutual Funds are one of the most popular investment options we have out there. These are one of the best investment tools to grow your wealth with low risk. Besides, you don’t have to worry much after investing in mutual funds since these are managed by fund managers who are financial professionals responsible to manage the pooled investment. Hence, mutual funds can be thought of as an excellent opportunity to gain exposure to the diversification of your portfolio.
In this post, we will be covering Mutual Funds’ meaning, their types, and categories, how to calculate returns for funds you have invested in, mutual fund calculator, and diversification with tax benefits. After a quick read, you will have a completely different perspective of money and investments, and we bet you would join us in saying “Mutual Funds Sahi Hai”!
What are Mutual Funds?
Mutual Funds are fund houses or Asset Management Companies that pool money from different investors and invest the money in securities like bonds, short-term debts, equities, and other assets. The money collected is managed by professional fund managers who invest in these securities, thereby creating a portfolio, to generate income for the investors.
Understanding Mutual Funds
How do Mutual Funds Work?
The mutual fund makes returns for the investor in the following ways:
- Investors earn dividends of stocks and the interest earned on bonds that are held in the portfolio of the fund.
- If the fund you’re investing in sells securities whose prices have risen, then the fund receives a capital gain. These funds are passed on to the investors via a distribution.
- If the prices of the fund holdings increase, then the fund’s shares prices increase as well. So, you can sell the shares of your mutual fund for a profit in the market.
Each mutual fund has a fund manager who works in the best interest of the mutual fund investors. The fund manager analyses various securities and picks up investments to put the money in after rigorous market research. So, you see with the right mutual fund, the investor need not bother about choosing the securities to invest in since the fund manager will do that on your behalf.
Types of Mutual Fund
Mutual funds are of various types depending upon the securities they invest in, the time of investment, mode of investment, and the tax benefits associated. We have listed some for you with a one-line description of each.
1. Based on Asset Class
a. Equity Funds – They form the largest category and have stocks and equities as their securities
b. Debt Funds – Also known as bond funds, it invests in bonds, commercial papers, government securities, and the likes.
c. Balanced Funds – These are funds that invest in a mix of asset classes. In some cases, the proportion of equity is higher than debt while in others it is the other way round.
2. Based on Investment Goals
a. Growth funds –Under these schemes, money is invested primarily in equity stocks to provide capital appreciation.
b. Liquid Funds or Income Funds – These invest in securities with a maturity of 91 days or less. Liquid funds are short term funds to provide capital protection and regular income to investors.
c. Tax-Saving Funds (ELSS) – These are funds that invest primarily in equity shares. Investments made in these funds qualify for deductions under the Income Tax Act.
d. Pension Funds – Pension funds are mutual funds that are invested in with a long term goal in mind.
3. Mutual Funds based on Theme
a. Exchange-Traded Funds – These are securities that can be stocks, commodities, or bonds that are traded on stock exchanges.
b. Index Funds – Index Funds track market indices and follow certain rules to invest in specific stocks falling under that index.
c. Sector Funds – These are funds that invest in a particular sector of the market. Examples are Financial, Chemical, Technology, and Commodity.
d. International funds – These are also known as foreign funds and offer investments in companies located in other parts of the world.
4. Mutual Fund Categorization in India in terms of Market Capitalization
In India, based on the market capitalization of companies, Mutual Funds can be classified into Large Caps, Midcaps and Small Caps.
a. Large Cap Mutual Funds – According to SEBI, large-cap companies fall in the top 100 of the list of companies according to market capitalization. Hence, investing in these companies is considered to be less risky and steady.
b. Mid Cap Mutual Funds – Mid Cap Funds invest in equity and equity-related instruments of mid-cap companies which are ranked between 101 and 250 in the list of companies according to market capitalization.
c. Small-Cap Mutual Funds – SEBI defines small-cap companies as those which are ranked below the 250th rank in terms of market capitalization. Small-Cap Funds invest in these companies and their stocks.
Why should you buy mutual funds?
Mutual funds are currently a popular investment choice and you should consider buying them due to several important reasons. Some of them are listed below:
- Professional Management: Not everyone is well-versed with stock markets. The fund managers do the required research on your behalf. They select the securities to invest in and also monitors their performance.
- Diversification: Mutual funds allow you to buy a bit of all kind of investments. This is possible because your investment is combined with money from other investors, which is then put into a pool of investments. Hence, the portfolio of the investor gets diversified via a single mutual fund investment. Otherwise, you’d have to own individual stocks or bonds.
- Affordability: Most mutual funds have a pretty low minimum investment amount. You can purchase a mutual fund at an amount as low as INR 500/ month if you opt for best SIP plans.
- Liquidity: If you have invested in mutual funds, then you can easily redeem your shares at any point of point for the current NAV plus the redemption fees (if any).
- Wide variety to choose from: Mutual funds have something for everybody. Everybody’s needs are different and you’ll surely find something that suits your needs. A young investor can take greater risk and so they can invest in an equity fund.
Best Mutual funds to invest in India
Best Mutual funds to invest in India for Tax Saving in 2020
Axis Long Term Equity FundINR 21,905 crINR 49.530.86.029.58Equity Linked Savings Schemes are equity diversified Mutual Funds that majorly invest in equity-linked instruments to provide market-linked returns. These offer tax benefits under Section 80C of the Income Tax Act & have a lock-in of 3 Years on investments.
- Axis Long Term Equity Fund – The scheme aims for long term capital growth from a diversified portfolio of equity-related securities. This mutual fund has given 12.4% trailing returns in the last 5 years and 18.6% trailing returns in the last 3 years. Crisil ranks it as Rank-1 and Value Research as 5 Star.
- Tata India Tax Savings Fund – Investments in equity would be at least 80% of the corpus, while allocation to debt and money market instruments can go up to 20%. This mutual fund has given 13.1% trailing returns in the last 5 years and 15.5% trailing returns in the last 3 years. Crisil ranks it as Rank-3 and Value Research as 5 Star.
- Mirae Asset Tax Saver Fund – This fund has 98.9% investment in Indian stocks of which 58.27% is in large-cap stocks, 21.52% is in mid-cap stocks, 9.1% in small-cap stocks. This mutual fund has given 19.3% trailing returns in the last 3 years and 18.1% trailing returns in the last year.
- Invesco India Tax Plan – It intends to invest across market capitalization sectors utilizing a bottom-up approach. It will aim to have a concentrated well-researched portfolio, which would be around 20 – 50 stocks. This mutual fund has given 11.8% trailing returns in the last 5 years and 14.8% trailing returns in the last 3 years. Crisil ranks it as Rank-2 and Value Research as 4 Star.
- Aditya Birla Sun Life Tax Relief 96 – It was converted to an open-ended scheme with effect from July 1999. A combination of top-down & bottom-up approach will be followed in the stock selection process. This mutual fund has given 11% trailing returns in the last 5 years and 13.5% trailing returns in the last 3 years. Crisil ranks it as Rank-3 and Value Research as 4 Star.
The Mutual funds Returns Calculator gives you a value by calculating fund returns for the period chosen by you. It also displays returns and performance rank of the fund within its peer group for different time frames. There are various online Mutual Fund and SIP Calculators that can help you to track your return. Many websites allow users to track their portfolios by listing the funds they have invested in and generating analytics report over it.How to Choose Best Mutual Funds?Mutual Funds need to be chosen by considering various key aspects such as the investor’s return expectations, risk tolerance, investment horizon, expense ratio of the fund, and so on.
Given below are some of the key points to look for while choosing the right mutual fund:
1. GoalsYour financial goals should be set clearly in your mind. You need to choose such a plan that will suit your return expectations, investment horizon, and return expectations. Otherwise, you might face the temptation to stop or exit from your mutual fund investment.Your goals could be both short-term and long-term. Starting from child’s education, marriage, purchasing a car, house, to your retirement plans and even more, all these could be called your financial goals.
2. RiskWhile comparing mutual funds, make sure that you analyze the risk associated with them. Certain mutual funds such as equity mutual funds have high volatility. Debt mutual funds, are, however, comparatively stable. Make sure your risk tolerance is in line with the risk associated with the fund.
3. Liquidity of the mutual fundYou need to be sure about the time you’ll need the investment corpus. If you might need it sometime in the near future, then don’t go for equity mutual funds. Go for funds with medium to high liquidity if you need to withdraw the investment anytime in the future.
4. Investment StrategyMake sure to go through the investment strategy of the fund house that you wish to invest in. If the fund house’s investment strategy does not fall in line with your investment philosophy, then ultimately you’ll start feeling uncomfortable with the fund and sell them out.
5. Fund PerformanceYou could also consider evaluating the fund’s past performance to judge the performance aspect of the fund manager and the fund management team. A strong, stable experienced fund management team along with a reasonable term and good track record are proven to be beneficial for mutual fund investors.
6. Expense RatioExpense ratio refers to the fee charged to run the proper management of the investments. This mainly comprises of the fund manager’s fee. So, as an investor, you need to choose a fund with a lower expense ratio. Otherwise, a lot of your overall premiums might be channeled towards paying the fund manager’s fee rather than the fund itself.
7. Entry and Exit LoadEntry load is the fee charged to start investing with a fund house. Exit Load is the fee charged from the investors when they want to exit from the mutual fund. While most fund houses might not charge an entry load, an exit load is always charged. So, try to look for funds with minimal exit load.
8. TaxesMutual fund schemes are quite efficient when it comes to post-tax returns. If you hold an equity fund for less than one year then the gains will be known as Short Term Capital Gains (STCG). These are taxed at 15%. If you hold your funds for more than 1 years, then Long Term Capital Gains (LTCG) are taxed above the exemption limit of INR 1 lakh, at 10%. With debt funds, you’ll get indexation benefit.How to Invest in Best Mutual Funds in India?Once you have made up your mind to invest in Mutual Funds, where do you start? There are multiple ways as mentioned below.
- Direct Plans – You can approach the asset management company (AMC) and invest in a direct mutual fund of your choice. These plans have a low expense ratio because they don’t charge distributor commission.
- Mutual Fund Distributor – You can contact a registered mutual fund distributor. He will help you out to complete the required documentation. You will be investing in a regular plan which will charge a distributor’s commission.
- Online Applications – There are several third-party portals and mobile applications available online that allow you to invest in multiple funds using both Direct and Regular Plans.
Difference between an ETF and Mutual FundExchange-Traded Fund (ETFs) and Mutual Funds (MFs) have a lot of things in common which is why many people use these terms interchangeably. But, both have key differences that all investors must know:Classes of Mutual Fund SharesThe mutual fund classes give an idea about the type and number of fees charged for the shares you hold in the fund. There are three main types of mutual fund classes: A, B, and C. Let’s find out what each of these classes means.Class A Mutual Fund Shares: These shares charge an upfront sales fee or a front-end load. This fee is taken from your initial investment.Class B Mutual Fund Shares: The B-shares need a back-end or contingent deferred sales charge. This fee shall be paid if you sell the shares after a specific period of years after you purchase the fund. Such shares are good if you have little money to invest and can stay invested for a long tenure.Class C Mutual Fund Shares: The C-shares charge an annual fee and are a type of level-load funds. These are best for people who want to redeem the shares after a short tenure.Advantages of Mutual Funds
- High liquidity: Other investment plans such as FDs, PPF, NSC, etc. do not have a lock-in period. But, mutual funds do allow the investors to redeem the units anytime as required. However, you’ll have to pay a pre-exist penalty along with an exit load.
- Lower Risk: The Mutual funds have an asset allocation that is diversified among different types of assets. This diversifies portfolio lowers the risk of an investor and this way, the overall performance of the mutual fund is balanced. Hence, the best mutual funds have lower risk associated and are less volatile.
- Fund Manager: All mutual funds are managed and operated by a fund house that has an appointed fund manager. The fund manager pools in investments from various investors and then invests them in securities that ensure profit.
- Easy to buy: There are multiple channels and options an investor has while investing in a mutual fund. These are distributed via the channels given below:
- Brokerage Firms
- Agents and Banks
- Registrars such as CAMS and Karvy
- Online Mutual Fund Investment Platforms
Also, you wouldn’t require a Demat account to invest in Mutual funds.
- Higher Returns: Mutual funds are historically known to provide better returns than other fixed returns plans such as Savings accounts, FDs, NSC, PPF, and so on.
- Mutual Fund Taxation: If you invest the ELSS mutual funds, then you’ll be able to enjoy the tax deductions under Section 80C. Hence, you will be able to save taxes and earn returns at the same time.
- Low investment: You do not necessarily need to put in a huge amount of money while investing in mutual funds. You can start with as low as INR 500 per month when you invest via SIP. The maximum premium does not have any limits. So, you can invest according to your income stature, expenses, risk tolerance, etc.
Disadvantages of Mutual Funds
1. Mutual Fund management costsYou see the salary of the fund manager and market analysts is paid from the premiums paid by the investors. The total fund management charges are something you must consider while choosing a mutual fund. Keep in mind that high management fees are not synonymous with better fund performance.
2. Lock-in periodsSome mutual funds have long lock-in periods which could range from 5 to 8 years. If you exit such funds before the funds attain maturity, then you might be required to pay the price for it. You need to know that a certain portion of the mutual fund is always stored in cash to pay out to the investor if they wish to exit the fund. This part doesn’t earn any interest.
3. DilutionDiversification does average your risks of loss but it also dilutes the profits you earn on the investment. So, choose not to invest in more than 7 to 9 best mutual funds at the same time.Which is a better SIP or Lumpsum?Whether to invest via SIPs or Lumpsum depends totally on the requirements of the investor. If the investor has a large amount of money, then they can choose a mutual fund of their choice and go for a lumpsum investment. On the other hand, if you can’t afford or don’t want to invest a large sum of money altogether, then you could go for SIP investments. SIP investments start from as low as INR 500 per month. So, this is a lot more convenient or people who want to invest in a lower amount of money.Also, with SIP the risk involved is lower because it lowers the average investment cost (aka rupee cost averaging). SIP also allows you to get even higher returns due to the power of compounding.
Direct v/s Regular Mutual Funds:
Know the DifferenceMutual funds are available in two versions: Direct and Regular. Let’s find out how direct mutual funds are different from the regular mutual funds:
Using a Mutual Fund CalculatorA mutual fund calculator tells you the maturity amount you will be receiving at the end of the investment tenure. You just have to feed some variables into the calculator such as SIP, lump-sum investment amount, frequency of SIP, rate of return, and investment tenure. You can alter these variables and figure out which fund you want to proceed with. You can find several such mutual fund calculators scattered on the internet.How to Buy Mutual Funds Online?Purchasing mutual funds is a pretty simple procedure. Follow the steps given below to invest in mutual funds online:
- Visit the website of the mutual fund company or any of its partner websites.
- Register yourself and sign up for an account.
- Complete and submit your KYC if not already done.
- Choose the mutual fund that suits your needs.
- Duly fill in the online application form by providing all the details asked for.
- Choose the preferred mode of investment: lumpsum or SIP
- Select the frequency of premiums if you select the SIP option
- Make the SIP premium payment
- Soon, you’ll receive a confirmation mail or text informing you about your folio number.
Selling Mutual FundsYou need to do a lot of research before selling your mutual funds. Make sure that the timing of the sale is right to ensure that you always end up in a profit.The following instances are the instances where you should redeem your mutual fund:
- For any upcoming or immediate financial requirement such as buying a house or car, paying for children’s education, health crisis, marriage, etc.
- If your investment requirements change due to certain changes in your portfolio, some life events, etc.
- If the performance of your mutual fund falls consistently below your expectations, then you could consider selling your funds. Provided, the dips are consistent for a sustained period which should be 1 to 5 years at the very least.
- If the mutual fund undergoes a reset or change in its objectives or strategies, departure of a trusted fund manager, etc., then you might want to sell your funds.
Mutual Funds Sahi Hai!!Mutual Funds is a wide ocean in the investment world and only when you dive into it will you understand the terminologies as well as the benefits associated with them. This article serves to provide you with all the basic information required to get started with investing in mutual funds in 2020. We hope you have found all the information you were looking for about mutual funds and mutual funds.
FAQs
1. Is 2020 a good time to invest in mutual funds 2020?
Ans: The worst the market performance becomes, the better returns you’d receive if you invest for a medium to long term. So, you can say that any time is the right time for mutual funds especially if you invest via a SIP (because that doesn’t need you to keep a constant check on the market). However, if your investment horizon is a short one of only 3 to 5 years: then it might not be a good idea to invest in equity mutual funds because they are extremely risky for short-term investments.
2. What do you mean by a Blue Chip Fund?
Ans: Blue Chip Funds are funds that invest in stocks of companies with a credible track record and are financially healthy. Such funds are known to pay dividends regularly and are less risky than mid and small-cap funds.
3. Are SIPs taxable?
Ans: If you are investing via SIPs in equity and balanced MFs, then all the gains after one year of investment will be considered as Long Term Capital Gains and will be completely tax-free. If your holding period is less than one year, then you’ll have to pay a 15% tax on the returns earned which are treated as Short Term Capital Gains.
4. Is the SBI Blue Chip Mutual Fund good?
Ans: SBI Blue Chip Mutual Fund is recognized as one of the best large-cap funds in India. It has less volatility and one of the safest mutual funds to opt for. It is ideal for investors with an investment horizon of 5 to 7 years.5. Is it a good decision to invest in Tata Ethical Fund?
Ans: The answer depends on your requirements and risk tolerance. The 1-year return rate provided by Tata Ethical Fund is 11.5% which is higher than the category average returns. But, the risk-adjusted returns are lower compared to the category average one. Also, the risk involved with Tata Ethical Fund is high. So, if you are looking for a short-term investment that will provide higher returns and have a high-risk tolerance, then go for it.
6.Which is the best Tata Mutual Fund to invest in?
Ans: Some of the best Tata Mutual Funds are as follows:
- Tata India Tax Savings Fund
- Tata Money Market Fund
- Tata Hybrid Equity Fund
- Tata Multicap Fund
7. Which is the best bank to invest in SIPs?Ans: Several banks are known to be trustworthy and reliable for SIP investments.8. Is SBI Mutual Fund a good investment option?Ans: Yes, it is. The reason being that firstly SBI Mutual fund schemes are one of the most trusted and reliable funds in India. These come with several options and variable tenures. You will get a capital appreciation for both low-risk and high-risk funds. They also provide you with tax benefits and allow NRIs to invest.9.What is the return on the SBI Blue Chip Fund?Ans: The current returns offered by SBI Blue Chip Fund are as follows:
- 1 year returns: -2.41%
- 3 year returns: 0.88%
- 5 year returns: 6.57%
- 10 year returns: 9.15%
10. Can I withdraw my mutual fund before its tenure completes?
Ans: Yes, you can but all mutual funds might not allow it. Also, some mutual funds will require you to pay some additional charges including an exit load for premature withdrawal.
11. What is the average return % provided by mutual funds?
Ans: Mutual Fund returns depend on the type of fund you are investing in. The return rate also depends on your investment tenure. Usually, mutual funds offer better returns than fixed-income investments like FDs, NSC, PPF, etc.12. Is FD better than MF?
Ans: Fixed Deposits have zero risks involved, offer fixed returns, are not liquid, and the returns earned from FDs are taxable. On the other hand, mutual funds offer a variety of options to choose from. The returns earned on mutual funds are higher over the long term. The returns from FDs will be added to your income slab and taxed accordingly. However, the returns from mutual funds will fall in the category of STCG or LTCG and will be taxed at a comparatively lower rate. Also, many mutual fund categories have high liquidity with the minimum investment amount being only INR 500.The decision depends on your requirements. For investors wanting fixed returns, have low-risk tolerance, and a long-term investment horizon, Fixed Deposits work better. While, for investors who can take risks, want higher returns along with tax-benefits, want to start with a low investment amount, Mutual Funds seem to be the right choice.
13. What is the best mutual fund to invest in India 2020 for the long term?
Ans: Long term investment includes all those investments that have a tenure of 5 years or more.
- Aditya Birla Sun Life Liquid Fund
- ICICI Prudential Liquid Fund
- SBI Liquid Fund
- HDFC Liquid Fund
- Nippon India Liquid Fund
- UTI Liquid Cash Plan
- Axis Liquid Fund
- Kotak Liquid Fund
- DSP Liquidity Fund
- L&T Liquid Fund
14. What are the top 10 SIP mutual funds to invest in 2020?Ans: The top 10 mutual funds for SIP investment in 2020 are as follows:
- Axis Long Term Equity Fund
- ICICI Prudential Bluechip Fund
- DSP Tax Saver
- Franklin India Equity Fund
- ICICI Prudential Value Discovery Fund
- Nippon India Tax Saver (ELSS) Fund
- DSP Equity Opportunities Fund
- Motilal Oswal Long Term Equity Fund
- Aditya Birla Sun Life Pure Value Fund
- HDFC Equity Fund
15. What are index funds?
Ans: An index fund is a type of mutual fund or exchange-traded fund that follows some pre-decided set of rules and tracks a specific underlying benchmark index.16.
Do I need to sell my investments in DSP Small Cap Fund?
Ans: If you are fine to deal with extra risk and volatility, then you could continue with such investments. Keep in mind that such funds fall in the mid-cap and small-cap categories and can offer higher returns over the long term. So, you should stay invested for a long period to maximize your returns.
| Fund Name | Net Assets | NAV | 1 yr return (%) | 3 yr return (%) | 5 yr return (%) | |
| Tata India Tax Savings Fund | INR 2,075 cr | INR 19.01 | -0.4 | 3.09 | 9.87 | |
| Mirae Asset Tax Saver Fund | INR 4,181 cr | INR 19..97 | 7.70 | 8.12 | – | |
| Invesco India Tax Plan | INR 1,112 cr | INR 58.52 | 7.9 | 6.56 | 10.30 | |
| Aditya Birla Sun Life Tax Relief 96 | INR 11,000 cr | INR 33.45 | 4.59 | 3.82 | 9.22 | |
| Motilal Oswal Long Term Equity Fund | INR 1,585 cr | INR 17.21 | -6.1 | -0.91 | 9.59 | |
| ICICI Prudential Long Term Equity Fund Tax Savings (Growth) | INR 6,721 cr | INR 353.27 | -2.10 | 2.27 | 6.11 | |
| Nippon India Tax Saver ELSS Fund | INR 9,029 cr | INR 44.6749 | -10.11% | -9.78% | 0.67% | |
| BOI AXA Tax Advantage Eco Fund | INR 298 cr | INR 65.73 | 18.10% | 6.84% | 11.20% | |
| DSP Tax Saver Fund | INR 6,298 cr | INR 50.48 | -0.89 | 10.12 | 9.89 | |
| Fund Name | NAV | 3 yr returns (%) | 5 yr returns (%) | 10 yr returns (%) | ||
| Mirae Asset Large Cap Fund | INR 50.776 | 4.23% | 10.04% | 11.63% | ||
| Axis Bluechip Fund | INR 30.6 | 7.84% | 10.21% | 9.82% | ||
| ICICI Prudential Bluechip Fund | INR 40.55 | 2.4% | 7.77% | 9.27% | ||
| SBI Bluechip Fund | INR 37.8925 | 1.23% | 6.75% | 9.11% | ||
| Aditya Birla Sun Life Equity Growth Fund | INR 211.74 | 0.11% | 6.29% | 8.55% | ||
| Mirae Asset Emerging Bluechip Fund | INR 57.595 | 5.62% | 13.71% | 17.81% | ||
| L&T India Value Fund | INR 34.60 | 1.77% | 7.03% | 10.99% | ||
| Kotak Standard Multicap Fund | INR 34.55 | 2.17% | 8.46% | 10.49% | ||
| SBI Magnum Multicap Fund | INR 46.1429 | 0.92% | 7.82% | 8.97% | ||
| Axis Focused 25 Fund | INR 29.07 | 4.89% | 10.63% | — | ||
| Fund Name | NAV (INR) | 3-year return (%) | 5-year return (%) | 10-year return (%) | ||
| HDFC Midcap Opportunities Fund | 53.885 | -0.61% | 7.68% | 12.8% | ||
| Kotak Emerging Equity Scheme | 40.649 | 2.05% | 9.3% | 11.81% | ||
| L&T Mid Cap Fund | 134.72 | -0.44% | 9.24% | 11.93% | ||
| Canara Robeco Emerging Equities Growth | 98.04 | 3.54% | 10.74% | 15.09% | ||
| DSP Mid Cap Fund | 61.173 | 4.25% | 11.51% | 12.27% | ||
| HDFC Small Cap Fund | 37.274 | -0.66% | 8.21% | 8.71% | ||
| Nippon India Small Cap Fund | 41.7224 | 15.36% | 11.08% | 1.42% | ||
| SBI Small Cap Fund | 58.642 | 5% | 13.56% | 16.85% | ||
| Aditya Birla Sun Life Small Cap Fund | 29.7531 | -8.97% | 4.2% | 8.24% | ||
| DSP Small Cap Fund | 59.565 | -0.96% | 7.73% | 12.93% | ||
| Fund Name | NAV (INR) | 3-year return (%) | 5-year return (%) | 10-year return (%) | ||
| ICICI Prudential Equity & Debt Fund | 126.04 | 1.39% | 7.13% | 10.56% | ||
| Nippon India Equity Hybrid Fund | 42.9823 | -6.69% | 1.85% | 6.06% | ||
| HDFC Hybrid Equity Fund | 52.092 | 1.3% | 6.93% | 10.4% | ||
| L&T Hybrid Equity Fund | 26.449 | 0.91% | 6.36% | — | ||
| SBI Equity Hybrid Fund | 138.2532 | 5.12% | 8.13% | 9.93% | ||
| DSP Equity & Bond Fund | 159.14 | 4.14% | 8.52% | 8.74% | ||
| Canara Robeco Equity Hybrid Fund | 171.73 | 6.54% | 9.39% | 10.41% | ||
| Aditya Birla Sun Life Equity Hybrid | 709.59 | -1.17% | 5.28% | 8.27% | ||
| HDFC Balance Advantage Fund | 176.282 | -1.24% | 5.04% | 8.1% | ||
| ICICI Prudential Balanced Advantage | 37.72 | 5.39% | 7.83% | 10.48% | ||
| Fund Name | NAV (INR) | 3-year return (%) | 5-year return (%) | 10-year return (%) | ||
| Aditya Birla Sun Life Liquid Fund | 324.053 | 6.44% | 6.81% | 7.94% | ||
| ICICI Prudential Liquid Fund | 298.1876 | 6.39% | 6.76% | 7.89% | ||
| SBI Liquid Fund | 3151.5236 | 6.29% | 6.68% | 7.83% | ||
| HDFC Liquid Fund | 3954.8579 | 6.24% | 6.65% | 7.8% | ||
| Nippon India Liquid Fund | 4917.8951 | 6.44% | 6.8% | 7.9% | ||
| UTI Liquid Cash Plan | 3298.8672 | 6.38% | 6.76% | 7.85% | ||
| Axis Liquid Fund | 2235.8274 | 6.43% | 6.8% | 7.91% | ||
| Kotak Liquid Fund | 4075.0686 | 6.29% | 6.69% | 7.85% | ||
| DSP Liquidity Fund | 2872.8865 | 6.33% | 6.7% | 7.84% | ||
| L&T Liquid Fund | 2761.1322 | 6.36% | 6.75% | 7.88% | ||
| Fund Name | NAV (INR) | 3-year return (%) | 5-year return (%) | 10-year return (%) | ||
| SBI Magnum Constant Maturity Fund Regular Growth | 48.5278 | 10.4% | 10.38% | 9.87% | ||
| ICICI Prudential Constant Maturity Gilt Growth | 18.6071 | 10.46% | 10.49% | — | ||
| L&T Triple Ace Bond Fund Growth | 55.6945 | 9.34% | 8.44% | 8.12% | ||
| Edelweiss Government Securities Fund Regular Growth | 18.3625 | 9.35% | 8.86% | — | ||
| DSP Government Securities Fund Regular Plan-Growth | 71.889 | 9.18% | 9.48% | 8.21% | ||
| Kotak Dynamic Bond Growth | 28.3383 | 8.99% | 9.48% | 9.32% | ||
| Aditya Birla Sun Life Corporate Bond Fund Regular Plan-Growth | 83.3648 | 8.83% | 8.94% | 9.12% | ||
| HDFC Corporate Bond Growth | 24.224 | 8.72% | 8.98% | 9.09% | ||
| Axis Dynamic Bond Fund Growth | 22.4511 | 8.7% | 8.89% | — | ||
| ICICI Prudential Long Term Bond Fund Growth | 70.1421 | 8.65% | 9.42% | 8.7% | ||
| Plan Name | NAV | Net Assets (cr) | 3-month returns (%) | 6-month returns (%) | 1-year returns (%) | 3-year returns (%) |
| HDFC Short Term Debt Fund | INR 23.8914 | INR 12,737 | 2.7 | 7.5 | 10.6 | 8.6 |
| Axis Short Term Debt | INR 23.3001 | INR 9,131 | 2.1 | 7.3 | 10 | 8.2 |
| IDFC Bond Fund Short Term Plan | INR 43.6511 | INR 12,857 | 1.7 | 7.1 | 9.6 | 8.1 |
| Aditya Birla Sun Life Short Term Opportunities Fund | INR 35.5487 | INR 3,858 | 3.9 | 8.7 | 9.9 | 8 |
| L&T Short Term Bond Fund | INR 20.3758 | INR 4,851 | 1.2 | 6.5 | 9.3 | 8 |
| Kotak Dynamic Bond Fund | INR 29.72 | INR 1,632 | – | 7.88 | 11.6 | 9.65 |
| DSP Government Securities Fund | INR 74.59 | INR 833 | – | 6.48% | 13 | 9.92 |
| Franklin India Savings Fund | INR 39.19 | INR 1,308 | – | 4.56% | 7.1 | 7.70 |
| IDBI Liquid Fund | INR 2175.20 | INR 1,820 | – | 2.48% | 5.2 | 6.58 |
| ICICI Prudential Credit Risk Fund | INR 24.23 | INR 6,503 | – | 6.42% | 10.6 | 8.76 |
| Fund Name | Assets Size | 1 Year Returns (%) | 3 Year Returns (%) | 5 Year Returns (%) | 10 Year Returns (%) | |
| Axis Multicap | INR 6,434 crore | 5.65% | – | – | – | |
| Kotak Standard Multicap | 2.84% | 2.81% | 9.22% | 10.83% | ||
| SBI Magnum Multicap | INR 9,063 crore | -1.00 % | 1.36% | 8.35% | 9.39% | |
| Motilal Oswal Multicap 35 | INR 11,240 crores | 1.88% | -0.92% | 8.32% | – | |
| Edelweiss Multicap | INR 560 crores | 3.72% | 2.87% | 8.25% | – | |
| ICICI Prudential Multicap | INR 5,594 crores | -4.02% | 0.72% | 5.96% | 8.55% | |
| Invesco India Multicap | INR 925 crores | 7.42% | 0.78% | 6.94% | 11.81% | |
| HDFC Equity | INR 19,798 crores | -9.09% | -1.40% | 5.44% | 7.12% | |
| Franklin India Equity | INR 8,591 crores | 0.45% | -0.62% | 5.04% | 9.10% | |
| Nippon India Multicap | INR 8,053 crores | -8.21% | -2.13% | 2.54% | 7.90% | |
| Exchange-Traded Funds | Mutual Funds | |||||
| ETFs are traded during the day and their values also change during the day | Mutual funds’ value is decided by the Net Asset Value of the day | |||||
| Exchange-Traded Funds have lower operating expenses. | Mutual funds expenses depend on the Asset Management House and the type of funds you invested in. | |||||
| ETFs don’t have a minimum investment value | Most mutual funds have a minimum investment value and that is INR 500 | |||||
| ETFs have lesser tax liabilities than the mutual funds as per “Creations” and “Redemptions” | The mutual funds can have short term capital gains and long term capital gains and are taxed accordingly | |||||
| ETFs have an additional cost of “Bid-ask” spread. | Mutual Funds have zero cost transactions | |||||
| ETFs have higher liquidity. | Mutual funds have lesser liquidity. | |||||
| ETF doesn’t have any minimum holding period. | Mutual funds could levy a penalty if you want to sell the units early. However, some mutual funds are highly liquid. | |||||
| ETF does not have fund managers and so are not actively managed. | Mutual Funds have professional fund managers managing them and are actively monitored. | |||||
| Criteria | Direct Mutual Fund | Regular Mutual Fund | ||||
| Returns | Provide higher returns than regular MFs. The reason being that direct funds are bought from the AMC and other selected online partner sites. And, the procedure has no third party involvement. | |||||
| Intermediary | An intermediary is not present in a direct MF. You need to buy directly from the AMC. | A broker is present as an intermediary who mediates between the AMC and the investor. This way, the broker receives a commission. | ||||
| Expense Ratio | Lower because there is no broker involved | Higher because a broker is involved and a commission needs to be paid to a third party. | ||||
| NAV | Higher NAV because direct funds have lower expense ratio which is passed on to the NAV | Lower NAV because the expense ratio is higher | ||||
| Simplicity | Processing is easier as a broker is not involved and the investor directly invests in the fund. | Processing becomes a bit complex due to the involvement of an intermediary |
Very useful information for this article.