A mutual fund is one of the most popular investing options for consumers. An investor can invest in one of the hundreds of mutual funds available in India. However, selecting the top ten mutual funds or the best mutual fund is challenging. So, if you’re looking for the best mutual fund, you should examine your risk tolerance and the time horizon of your goals.Your desire and capacity to accept risks make up your risk profile. As a result, someone who is ready to take on greater risk can invest in high-risk funds that are inappropriate for a risk-averse investor.

Your ambitions’ time horizon, or the length of time you want to hold an investment to achieve a certain goal, is another crucial consideration. Instead of focusing on short-term objectives, investors might invest in high-risk funds.


Which are Best Mutual Funds?

Mutual funds are classified into several kinds. We may categorise mutual funds based on their underlying assets, such as equity, debt, or gold, into equity mutual funds, debt mutual funds, and hybrid funds. These funds have varying risk profiles and investment goals.

As a result, no single mutual fund is appropriate for everyone. The best mutual fund(s) for you will be those that fit your investing goals, risk tolerance, and time horizon.

Assume you are constructing an investing portfolio for your child’s higher education after 15 years. In this instance, equity mutual funds may be the ideal option for you if you are investing for the long term. However, equity mutual funds are divided into sub-categories such as big cap funds, mid-cap funds, and small-cap funds. Depending on your risk tolerance, you can choose to invest in a large size fund or a small cap fund. A small-cap fund is riskier than a large-cap fund since the latter invests mostly in huge corporations that are market leaders with solid financial positions. Large firms are better able than small corporations to weather business cycle downturns.

You may potentially have many objectives. If you want to buy a car in the next three years, investing in stocks funds might not be the best option. Debt mutual funds, which are less volatile than equity funds, might help you achieve your goal of buying a car.

Best-Performing Mutual Funds in India

Here is a list of the top ten best mutual funds to invest in right now:

Best-Performing Equity Mutual Funds

Fund Name3-year Return (%)*5-year Return (%)*Redirect
Tata Digital India Fund Direct-Growth29.75%24.35%Invest
Quant Small Cap Fund Direct Plan-Growth48.56%24.24%Invest
ICICI Prudential Technology Direct Plan-Growth32.85%23.70%Invest
SBI Technology Opportunities Fund Direct-Growth29.17%23.25%Invest
Aditya Birla Sun Life Digital India Fund Direct-Growth28.74%22.74%Invest
Quant Tax Plan Direct-Growth36.01%21.32%Invest
Quant Mid Cap Fund Direct-Growth33.62%20.10%Invest
Quant Active Fund Direct-Growth32.62%19.97%Invest
Axis Small Cap Fund Direct-Growth23.91%19.68%Invest
Quant Infrastructure Fund Direct-Growth37.18%19.54%Invest
*Last updated as on 13th Feb 2023Groww

Best-Performing Debt Mutual Funds

Fund Name3-year Return (%)*5-year Return (%)*Redirect
DSP Government Securities Direct Plan-Growth6.05%8.59%Invest
Aditya Birla Sun Life Medium Term Direct Plan-Growth13.45%8.57%Invest
IDFC Government Securities Investment Plan Direct-Growth5.51%8.42%Invest
ICICI Prudential Constant Maturity Gilt Fund Direct-Growth5.26%8.34%Invest
IDFC Government Securities Fund Constant Maturity Direct-Growth4.49%8.30%Invest
ICICI Prudential Gilt Fund Direct Plan-Growth6.46%8.30%Invest
Nippon India Gilt Securities Fund Direct-Growth5.25%8.26%Invest
Kotak Gilt Investment Direct-Growth6.22%8.22%Invest
ICICI Prudential All Seasons Bond Fund Direct Plan-Growth7.02%8.19%Invest
SBI Magnum Gilt Fund Direct-Growth6.07%8.18%Invest
*Last updated as on 13th Feb 2023-Groww

Best-Performing Hybrid Mutual Funds

Fund Name3-year Return (%)*5-year Return (%)*Redirect
Quant Multi Asset Fund Direct-Growth29.70%20.91%Invest
Quant Absolute Fund Direct-Growth28.32%18.26%Invest
Kotak Multi Asset Allocator FoF – Dynamic Direct-Growth20.02%15.78%Invest
ICICI Prudential Equity & Debt Fund Direct-Growth20.65%14.08%Invest
ICICI Prudential Multi Asset Fund Direct-Growth21.18%13.78%Invest
Baroda BNP Paribas Aggressive Hybrid Fund Direct – Growth13.62%13.25%Invest
Edelweiss Aggressive Hybrid Fund Direct – Growth16.09%12.76%Invest
Kotak Equity Hybrid Fund Direct-Growth16.68%12.68%Invest
ICICI Prudential Asset Allocator Fund (FOF) Direct – Growth13.88%12.64%Invest
Canara Robeco Equity Hybrid Fund Direct-Growth13.79%12.42%Invest
*Last updated as on 13th Feb 2023-Groww

How to Choose the Best-Performing Mutual Funds in India

We’re all wondering which mutual funds are the best to invest in right now. This section will go over some of the qualities that may help you decide on the top ten greatest mutual funds to invest in right now.

  • Investment Goals

Before investing in any asset, it is important to take into account your life goals and objectives. Once you have defined what you need the money for, compare this list of requirements to the investment strategies employed by mutual funds in order to determine if taking part in that fund would benefit your financial aspirations. Mutual funds typically employ different investment strategies with distinct aims, so it is up to individual investors to understand whether those interests align with their chosen scheme.

One of the goals of equities mutual funds, for example, is to create wealth. As a result, equity mutual funds are ideal for investors seeking long-term wealth accumulation in order to fulfil long-term goals such as creating a retirement corpus. In this situation, investing in equity funds rather than debt funds would be a preferable choice because stocks have the potential to provide larger returns than debt funds. As a result, if you primarily invest in debt funds to establish a retirement corpus, you will not be able to acquire the same retirement corpus as you could with equity funds.

As a result, in order for the investor to make an informed decision, the fund’s investment goal must be compatible with his or her goals and risk tolerance.

Equity funds are the greatest long-term mutual funds to invest in. To achieve your long-term goals, it is important to choose a growth mutual fund. This type of fund will continue to grow over time, which will result in compound returns for you.

All important facts, including as asset allocation and goals, may be found in the scheme information paper.

Use this calculator to determine the future value of your mutual fund investment.
Mutual Fund Calculator.

  • Fund’s History

The history of the fund provides insights into its ability to withstand fluctuations in the stock market. This demonstrates how committed the organisation is to achieving success during challenging times.

Because newly created mutual funds and funds that are up for subscription lack a track record, it is impossible to anticipate their returns and performance throughout market cycles. The best mutual fund to invest in is one that has demonstrated consistent performance over a wide range of market conditions. This kind of fund also indicates the investment strategies used are well-researched and effective.

  • Performance of Fund Manager

The fund manager is responsible for overseeing the operations of the fund. It is important to review their track record in order to assess their suitability for this role.

An investor should keep track of the fund’s performance amid market ups and downs. Funds managers can also evaluate the performance of their various investment plans.

  • Expense Ratio

The cost ratio is expressed as a percentage of the fund’s assets and is charged by the fund house along with other charges for managing the assets of a fund. The net return achieved by the investor will be the mutual fund returns minus the fee ratio. If an investor’s expenditure ratio is high, his or her returns will be reduced. As a result, while selecting a fund, an investor should opt for a plan with a lower expense ratio than its counterparts in the category.

  • Examine the fund’s consistency.

Best performing mutual funds in India have a track record of outperforming the market over a three to five-year period. In terms of performance, these funds would have exceeded their benchmark and peer funds. You must look at the fund’s performance across the prior business cycles. It is important to review the fund’s performance during market downturns, as it typically performs better than most funds. However, past results are not always indicative of future success.

Using the historical and most recent NAVs of mutual funds can provide a sense of fund performance.

  • Examine the financial ratios

Financial statistics such as alpha and beta can be used to determine India’s top-performing mutual funds.

Mutual fund results are intrinsically connected to risk. A return is the percentage of increase in the value of a company’s capital investments.. Risk is defined as the uncertainty that surrounds an investment and refers to the chance of receiving no or negative returns due to a range of factors. As a result, each investor must analyse the risk-return potential, which financial ratios have made feasible.

The Sharpe and Alpha ratios give critical information. The Sharpe ratio measures the fund’s excess return on every unit of risk it has taken.

Check the performance of your favourite funds using Mutual Investment Performance Ratios to identify the best fund for your needs.

Check this video on how to identify the best mutual fund for you.

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