Stocks of firms listed on the stock exchange make up at least 65% of the assets invested in equity mutual funds. Given that equities can be volatile in the short term, they are better suited as long-term investments (> 5 years). While they carry a high risk and the possibility for larger profits. Some examples of equity mutual funds include:
Large cap Funds:
Depending on market size, the top 100 businesses are considered to be large-cap corporations, and large-cap funds invest at least 80% of their portfolio in these equities.
The Association of Mutual Funds of India (AMFI) is the organisation that represents mutual funds in the business and is in charge of defending and advancing the interests of both mutual funds and unit-holders
Mid-cap Funds:
Mid-cap Funds invest at least 65% of their portfolio in shares of mid-cap businesses, which are the firms with market capitalisation between 101 and 250.
Small-cap Funds
Small-cap Funds invest at least 65% of their portfolio in stocks of small-cap businesses, which are those with a market value of 251 or less.
| Fund Name | 3Y CAGR | Till Date CAGR |
|---|---|---|
| ICICI Prudential Smallcap Fund (G) | 24.1% | 11.5% |
| Kotak Small Cap fund (G) | 26.5% | 16.8% |
| Bank of India Small Cap Fund (G) | 28.9% | 25.8% |
| Nippon India Small Cap Fund (G) | 30% | 19.6% |
ELSS (Equity Linked Savings Scheme)
Equity mutual funds that save on taxes include ELSS (Equity Linked Savings Scheme). At least 80% of the portfolio is allocated to equities. Section 80C of the Income Tax Act of 1961 allows for a tax deduction on investments made through ELSS of up to Rs 1.5 lakh annually. ELSS also has a 3-year lock-in period starting from the investment date.
Best ELSS Funds to Invest in 2023
| Fund Name | 3Y CAGR | Till Date CAGR |
|---|---|---|
| DSP Tax Saver Fund (G) | 16.1% | 14% |
| Mirae Asset Tax Saver Fund (G) | 17% | 17.1% |
| Union Long Term Equity Fund (G) | 17% | 13.8% |
| Bank of India Tax Advantage Fund (G) | 18% | 17.8% |
| Canara Robeco Equity Taxsaver fund (G) | 16.1% | 19% |
| Kotak Tax Saver Scheme (G) | 15.4% | 12.4% |
Multi-cap Funds:
Multi-cap funds, also known as large-cap, mid-cap, and small-cap stocks, invest in stocks of any firms across all market capitalizations. At the level of market capitalisation, SEBI has not established an investment cap.
| Fund Name | 3Y CAGR | Till Date CAGR |
|---|---|---|
| Nippon India Multi Cap Fund (G) | 18.2% | 17% |
| Quant Active Fund (G) | 30.3% | 18.7% |
| Mahindra Manulife Multi Cap Badhat Yojana (G) | 19% | 13.1% |
| Baroda BNP Paribas Multi Cap Fund (G) | 18% | 15.8% |
| Invesco India Multicap Fund (G) | 14% | 14.7% |
International Funds
Plans called international funds invest in the stock of firms that are listed outside of India. As global markets do not always move in lockstep with Indian markets, the goal of these funds is to give investors some geographic diversity while reducing the volatility of Indian markets.
| Fund Name | 3Y CAGR | Till Date CAGR |
|---|---|---|
| Franklin India Feeder Franklin U S Opportunities Fund (G) | 5% | 14.5% |
| ICICI Prudential US Bluechip Equity Fund (G) | 13.5% | 16% |
| PGIM India Global Equity Opportunities Fund (G) | 7.4% | 8.3% |
| Aditya Birla Sun Life Global Emerging Opportunities Fund (G) | 9.9% | 4.7% |
| Motilal Oswal Nasdaq 100 Fund of Fund (G) | 13.1% | 19.2% |
Index Funds
A sort of mutual fund known as an index fund simply mimics an index. Therefore, fund managers put your money in the same firms and in the same proportion as the index they are monitoring when you invest in index funds. For instance, an index fund that follows the SENSEX will invest in the same proportion in each of the 30 stocks that make up the index. When a stock is dropped from the SENSEX, the index fund drops it from its holdings as well. Additionally, if some new stocks are included in the SENSEX, the fund will adjust its portfolio to reflect the changes.
| Fund Name | 3Y CAGR3 | Till Date CAGR |
|---|---|---|
| Navi Nifty 50 Index Fund (G) | – | 8.1% |
| UTI Nifty Midcap 150 Quality 50 Index Fund (G) | – | -7.9% |
| Axis Nifty Midcap 50 Index Fund (G) | – | 4.2% |
| IDFC Nifty100 Low Volatility 30 Index Fund (G) | – | 2.5% |
| SBI Nifty Smallcap 250 Index Fund (G) | – | -0.6% |
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