Best Indian Mutual Funds for 2013
One of the common asked question here is which is the best mutual fund to invest. I get this query number of times via email, comments etc. So, I decided to list them in different categories for the benefit of all.
While selecting funds, I’ve taken many factors in mind like past performance of fund, objective of fund, AUM, expense ratio, age of the fund, consistent return, standard deviation, Beta, portfolio of fund, AMC reputation etc.
Equity Mutual Funds
The best way to create wealth either for yourself, or for your child’s education or marriage or your own retirement planning, just invest in these funds. Suitable for long-term investors i.e. more than 5 years of time. You can invest lump-sum and/or invest via SIP mode also. Don’t see NAV on daily basis and don’t stop your investment if market is down. These schemes invest around 80%- 100% in stock market.
|HDFC Top 200|
|HDFC Mid-Cap Fund|
|HDFC Equity Fund|
|IDFC Premier Equity Fund|
|Reliance Regular Savings Fund – Equity|
These funds invest in one particular sector rather than diversifying the portfolio. So, such funds carries more risks. Invest only 10% of your portfolio in such funds.
|Reliance Pharma Fund|
|Reliance Banking Fund|
|SBI FMCG Fund|
If your time horizon is less than 3-5 years, you can invest in Balanced Funds as they invest around 60% in equity & balance 40% in debt.
|HDFC Prudence Fund|
|HDFC Balance Fund|
|Reliance Regular Savings Fund – Balanced|
These funds invest in Gold. There is already full article titled “13 ways to invest in Gold” which explains further these funds.
|SBI MF Gold ETF|
|Reliance Gold ETF or Reliance Gold Fund|
|HDFC Gold Fund|
These are Monthly Income Plans. They offer monthly income in the form of dividend. But remember, it’s not mandatory that company will give dividend every month. Since about 20% of money will be invested in equity, it’s possible that company fails to give dividend in case stock market is down like in 2008. So, if you’re looking for regular monthly income, without any break, forget these mutual funds, & go for Post office MIS or Bank FDs with monthly interest payout. Although in long term, these plans can give better returns than post office MIS.
|HDFC MIP Long Term Growth|
|Birla Sun Life MIP II -Savings 5 Plan|
Equity Linked Savings Scheme also invest upto 100% in equity like equity diversified fund. The only difference is that it has a lock-in period of 3 years. So, you get tax-advantage of Sec80C by investing in these schemes as per the current tax rules.
|Reliance Tax Saver Fund|
|HDFC Long Term Advantage Fund|
|Franklin India Tax Shield|
All of the above mentioned funds various options like Growth, Dividend-reinvest, dividend payout etc. If you’re a long-term investor and your objective is to create wealth for yourself or for child’s education or marriage or simply for retirement purpose, just go with Growth option.
Note: I STRONGLY suggest to invest in above mutual funds (except MIP) via SIP rather than lump-sum amount.
If you’ve got any doubt, please feel free to ask that under comments section below.
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January 18, 2013