Best Mutual Funds in India

A mutual fund is a form of financial vehicle that invests in securities such as stocks, bonds, money market instruments, and other assets by pooling money from many investors. Professional financial managers control investment funds, allocate assets, and create capital gains or profits for the fund's investors. The portfolio of a mutual fund is designed and managed to meet the investment objectives specified in the prospectus.

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Mutual funds provide access to professionally managed portfolios of equities, shares, and other assets to small and individual investors. As a result, each shareholder shares in the fund's gains and losses proportionally. Mutual funds invest in a wide variety of stocks. Their performance is usually determined by the improvement in the fund's overall market value, which is calculated by aggregating the performance of the underlying assets.

What is the Best Mutual Fund?

An asset management company creates a mutual fund by pooling assets from investors, whether individual or institutional, to buy securities. AMCs employ fund managers to oversee client portfolios. In a nutshell, mutual funds pool money from various investors and invest that in stocks, shares, and other related assets. The NAV of mutual funds varies daily based on their fund assets.

Investors can redeem or buy fund units at the current NAV or net asset value. Since mutual funds are governed by the Securities and Exchange Board of India, they are renowned to be a haven for your money. Investing in mutual funds in India has the benefit of helping investors to scale up their investment with a relatively small initial amount.

The Reason Behind the Best Mutual Funds to Invest in India

There are certain reasons why mutual funds investment is popular in India:


Investing in mutual funds is a simple and paperless procedure. Investors should keep an eye on the economy and make investments based on their needs. Switching between funds and rebalancing your portfolio will also help keep your returns on track.

Low Initial Investment

You can start building a diversified mutual fund portfolio with as little as Rs 500 per month. You may also invest in a lump sum or a systematic investment strategy (SIP). When compared to lump-sum investments, however, a SIP will lower total investment costs while maximizing the power of compounding.


Section 80C of the Internal Revenue Code allows for tax deductions on some financial instruments, including mutual funds. Due to its higher returns and the shortest lock-in period of three years among all Section 80C options, the Equity Linked Savings Scheme has become a common tax-saving choice for Indians in recent years.

Professional Fund Management

Your money is handled by a competent fund manager who is backed by a team of analysts in mutual funds. The fund manager devises the asset allocation investment plan. He or she will have real-time access to the financial landscape and make appropriate adjustments to the mutual fund portfolio.

When is the Correct Time to Invest in a Best Mutual Fund in India?

 Mutual funds have become extremely common among investors. Due to the availability of several fund categories that fit investors with varying risk profiles, mutual funds are becoming more common. Investors today are interested not only in the best mutual fund to invest in India but also in the best time to invest in mutual funds. There are no requirements for anyone to invest in mutual funds. Any investor, including seasoned businessmen to working people, can invest in them. Mutual funds are open to students as well.

There is no such thing as the right time to invest in mutual funds. Individuals have the freedom to invest in mutual funds whenever they want. However, it is often desirable to buy funds at a lower NAV than at a higher price. The following are three situations in which mutual fund investments are appropriate:

  • Stocks are at an all-time low;
  • Bond rates are at an all-time high; and
  • Real estate growth is at an all-time low.

Any or all of the scenarios above are perfect, but in fact, this time never comes, and you're not sure whether your current situation fits the ones mentioned above. It's almost impossible to put a timeline on anything like this. As a result, you should not hesitate to invest in mutual funds if you feel the need arises.

Mutual Funds

Some people never progress beyond gathering the names of top funds because it has become their favourite pastime. They are still held back by residual doubts about the names' veracity. It's no surprise that many investors continue to seek validation from mutual fund forums years after they first began investing.

SBI Equity Hybrid Fund

You can expect gains that comfortably outperform inflation as well as returns from fixed income options if you save for five years or more. However, investment fluctuations can come along the way. Hybrid funds of an aggressive nature invest 65-80% of their assets in stocks and the remainder in bonds. Their returns are significantly lower than pure equity funds, which invest all of your capital in stock, but they also fall less when stock prices fall. This makes them a good option for conservative equity investors or first-time equity investors who are not used to big swings in the market.

 Axis Bluechip Fund 

To gain long-term capital appreciation by investing in a diversified portfolio that consists primarily of large-cap equity and equity-related securities, as well as derivatives. However, there is no guarantee that the Scheme's investment goal will be met.

Mirae Asset Large Cap Fund 

Large-cap equity mutual funds, as the name implies, will invest up to 80% of their total assets in large-cap companies. In terms of entire market capitalization, large-cap corporations are ranked 1–100. These are well-known brands with a significant market share, and they are considered safer than mid-and small-cap firms.

Parag Parikh Long Term Equity Fund 

The Parag Parikh Long Term Equity Fund is a mutual fund that investors cannot get enough of. The Flexi cap scheme (previously known as the multi-cap Scheme), which has built a strong reputation since its inception seven years ago, has gained even more fans thanks to its outstanding results in 2020, a challenging year for all fund houses. Investors and advisors cannot get enough of the straight-shooting fund house's disciplined approach to investment and information accountability.

SBI Small-Cap Fund 

SBI Small Cap Fund seeks to provide investors with long-term capital growth opportunities by investing primarily in a well-diversified basket of small-cap equity stocks. Small-cap securities account for the majority of the fund's holdings (at least 65 per cent). Other equities (including large and mid-cap companies) and/or debt and money market instruments will account for up to 35 per cent of the SBI Small Cap Fund's portfolio. The fund will use a bottom-up investment approach for stock selection and will invest in a mix of growth and value stocks.

How to Choose the Right Mutual Fund?

The last thing on an investor's mind should be to choose a scheme to invest in. There are some crucial steps to be taken before that, which will help to clear up a lot of uncertainty later. First and foremost, an investor should have a clear investment target in mind, such as retirement planning or home improvement.

The investor must calculate two figures: how much it will cost and how long it will take, as well as how much risk he or she is willing to take. In other words, a form of the fund is recommended based on an investor's priorities and objectives as well as risk profile, such as equity, hybrid, or debt, and only then individual schemes are chosen based on track record, portfolio fit, and other factors. In other words, if the investment goal is clear from the start, there will be far less uncertainty about which fund to choose later.

Funds are not run for free, and they are not all run at the same rate. Although the cost differences between funds are small, they can add up to significant differences, especially in fixed income funds where the performance difference between funds is small, to begin with. Also, for equity funds, a higher-cost fund that tends to be just marginally better than a lower-cost fund may not be worth purchasing. Remember that there is no justification for one AMC to have significantly higher costs than another unless it wishes to have a higher profit margin or invest more on items like ads that are irrelevant to you. If an AMC wants to make a bigger profit, it has to justify it by giving you a bigger return on your money.

Benefits of Mutual Funds

Here is a rundown of the core benefits offered by different mutual funds:

Risk Diversification

Risk diversification is one of the most important benefits of mutual funds. Each stock is exposed to three different types of risk: company risk, sector risk, and market risk. Unsystematic risk refers to company and sector risk, whereas systemic risk refers to market risk. By investing in a diversified portfolio of stocks across various industries, mutual funds help investors diversify unsystematic risks. As a result, the risk associated with mutual funds is considerably smaller than that associated with individual stocks.

Smaller Capital Outlay

Investors may need a large capital outlay to create a diversified portfolio of stocks, but they will need a smaller capital outlay to do so. Mutual funds, on the other hand, operate by pooling assets, so mutual fund investors can benefit from beneficial ownership of a diversified portfolio of stocks with a much lower initial investment. Investors can purchase units in a diversified equity mutual fund for as little as Rs 5,000 or even less in ELSS schemes for as little as Rs 500.

Mutual funds are managed by experienced investment managers with the requisite credentials, skills, and experience in choosing the best stocks or other instruments to generate the best risk-adjusted returns.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Economies of Scale in Transaction Costs

Since mutual funds purchase and sell stocks in vast quantities, transaction costs per unit are much smaller than what individual investors would pay if they bought or sold shares via a stockbroker.

To meet one's financial needs, one can easily sell mutual funds. After the money is liquidated, it is deposited in your bank account within a few days. There are also the best mutual funds in India that disburse money more easily. They're referred to as funds with immediate redemption since the money is credited to your bank the same day.

To beat inflation and increase their long-term capital, all investors pursue a higher return on investment by investing in financial instruments such as mutual funds. Since mutual funds can invest in a wide variety of sectors and industries, they have a better chance of delivering high returns over time.

The capital markets authority, the Securities and Exchange Board of India, oversees all mutual funds. This means that all mutual fund houses are expected to adhere to SEBI's various mandates. As a result, the investor’s rights are safeguarded. Furthermore, SEBI allows all mutual funds to report their portfolios on a monthly basis.

Investing in the best mutual fund in India is easy, and you can do so either online or offline. To begin your investment journey, simply go to your Asset Management Companies website and upload the required documents. You can also go to your AMC and sign the physical documents in person to get started. Mutual funds are a good choice since they are easy to invest in.

Over to you

It is easy to invest in mutual funds. These funds are professionally managed by expert and seasoned fund managers with a wealth of fund management experience. As a result, even novice investors with no prior knowledge of the market can invest in such funds with the assistance of expert managers. Since all activities relating to these funds are handled by experienced practitioners, you can be assured that your funds will be put to good use. That, but an entire team of experts can not only manage your investment, but also build a portfolio for you, strategize on your behalf, and direct you through every step of the process.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

*The investment risk in the investment portfolio is borne by the policyholder.

**All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.

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