In the Indian financial market mutual funds have become an incredibly popular option for a wide variety of investors. A mutual fund is such an investment instrument that cover both stocks and bonds, managed by asset management professionals. Depending on the risk, duration, cost investors can put their money in the well-diversified instrument. If you are a newcomer in the mutual fund market, you may go through my previous post to get basic information about it. Today we’ve come with the suggestion of the best mutual funds to invest for long term.
The 2018 year is coming to an end and we would be in the new year in another one month. With the growing inflation rate, investment becomes necessary and we are quite well-acquainted with the volatility of the stock market. In such a case, the mutual fund is one of the safest and profitable investment options. Here is the list of the best mutual funds to invest for long term.
Best Mutual Funds to Invest for Long Term
Mutual Fund is a versatile field with multiple investment options such as large cap, mid cap, small cap, SIP plan etc. In order to keep the topic clear, we try to provide the recommended list of the best mutual funds to invest for long term in almost every segment.
Equity Mutual Funds
An equity mutual fund is a particular type of fund which invests principally in stocks. It can be both actively or passively managed fund. In other words, it is also known as the stock fund. Under equity mutual fund, there are market cap divisions like large cap, mid cap, and small cap.
- ICICI Prudential Bluechip Equity Fund: The fund primarily focuses on blue-chip quality companies. Apart from its consistent performance, over the past 10 years, the specific scheme is known to protect the downside in bear cycles. In the past 3-5 years span, the scheme has given 10 to 15 percent returns.
- Aditya Birla Sun Life Frontline Equity Fund: In the large-cap category, the scheme ranked 3 by Crisil (Sept 2018). Depending on its performance and the fund manager’s ability the scheme is a relatively safe bet. Over the past few years, it has given 8.1% and 15.3% returns.
- Reliance Large Cap Fund: At present, it ranks among the top listed funds in India. Formerly it was named as the Reliance Top 200 fund. The primary objective of the fund is to generate consistent profit by investing in equity related instruments in large-cap companies. Its 3-5 years returns are 13.03% and 17.48% respectively.
- SBI Bluechip Fund: In the present market condition, the company’s high exposure to large-cap companies would be an appropriate choice. In the past 5-10 years period, the scheme has given 13 to 18 percent return. Its been reported that in the past six months its fund manager has maintained a diversified portfolio, covering companies like auto, FMCG, financial sector etc.
- L&T Mid Cap Fund: In the mid-cap category, the fund is ranked 2nd by Crisil (September 2018). the scheme has outperformed both the category average (15.89%) and benchmark index (14.01%) with a 10-year return of 17.96 percent.
- Kotak Emerging Equity Scheme: Though the scheme carries a moderately high risk, it is considered one of the best mid-cap equity fund scheme. It has outperformed the benchmark index (9.58%) but at the same time lags behind the category average (14.70%) with a 10-year return of 13.41%.
- Axis Mid Cap Fund: The aim of the scheme is to achieve long-term capital appreciation by investing in the equity related instrument of mid-cap companies. 3-5 years returns are 14.31% and 22.48% respectively. This fund also carries moderately high risk.
- HDFC Small Cap: The fund is four-star rated, covers only small-cap companies for investment. The fund has given 18.38% return after launched. Besides this, the scheme has returned 18.32% and 21.99% in 3 and 5 years respectively.
- Reliance Small Cap Fund: In the small-cap category, it is one of the best funds. Here the return and risk both are in a high position. Its 3 years return level is 15.08% and 5 years return is 29.26%.
- Franklin India Smaller Companies Fund: It is also a good equity small-cap fund with a profitable return.
Debt Mutual Funds
Debt mutual fund schemes fall under lower risk category in comparison to equity mutual fund. It can give you a more consistent return. The investment schemes are based on the corporate bonds, Govt (both state and central) bonds, bonds issued by banks, treasury bills, certificate of deposits etc.
- Franklin India Ultra-Short Bond Fund: The particular fund covers the debt and money market instrument. The duration of the portfolio is between 3 to 6 months. The objective of the scheme is to enhance consistent income by a portfolio of money market and debt instruments.
- ICICI Prudential Liquid Fund: In this fund, approximately 80% of it would be invested in the money market security. Its 3-5 years returns are 7.28% and 7.9% respectively.
- L&T Money Market Fund
Hybrid Mutual Funds
It is a diversified fund, typically invest in two or more asset classes such as stocks, bonds etc.
- ICICI Prudential Equity and Debt fund: The scheme belongs to the hybrid category. It is one of the safest and profitable schemes with 14.08% since its launch.
Best Mutual Funds to Invest for Long Term (Systematic Investment Plan or SIP)
SIP is the best way to invest money in the mutual fund. For SIP, investors need not pay any high amount, SIP can be started with a very small amount of capital. Here is the list of best SIP mutual funds for 2019.
- HDFC Top 100 Fund
- Kotak Standard Multicap Fund
- ICICI Pru Bluechip Fund
However, even in such a volatile and risky market, mutual fund performs as a non-risky option.