This investing season are you looking to put your funds into mutual funds? But are stuck between selecting the best-performing mutual funds or the top-rated mutual funds.
Do not worry, you are not the only one in this boat of confusion. for all the new investors looking for guidance in finding the right mutual fund themselves, this article has just the right information.
Instead of asking colleagues, relatives, or friends, aim for deep analysis when selecting the right mutual funds because advice may not always match your financial goals.
Invest in Mutual Funds in 2023
Mutual funds have always been a popular investment instrument. And looking at how popular it is among investors, there are thousands of mutual fund schemes available in the market.
But this brings the clients in somewhat of a predicament of choosing the best performing mutual funds with the right risk profile.
There are many parameters that you might have to look into before selecting a mutual fund. Some of the basic research areas are listed below.
- Fund’s History
- Investment Objectives
- Expense Ratio
- Check the consistency of the fund
- Check the financial ratios
- Fund Manager’s Performance
In this article, we will discuss the above-mentioned parameters and also provide a list of the best-performing mutual funds for investment in 2023.
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Benefits of Investing in Mutual Funds
The basic idea behind mutual funds is that interested investors will put their money in a suitable scheme and the Asset Management Company (AMC) will pool all the funds together to invest in securities like stock, bonds, debts, and other MF assets.
The fund managers will constantly monitor these schemes and the capital gain will be distributed among the investors depending on the funding share. And the AMC will deduct a certain percentage from this gain as a service charge.
The advantages of adding the best mutual funds to the portfolio are as follows:
Schemes for every financial requirement
One of the major benefits is that the minimum investment amount is Rs.500 and the maximum depends on the investor’s capabilities. Thus, this allows every investor to become part of a diversified pool of financial assets.
Another important benefit of investing in mutual funds is the flexibility of redeeming funds. Unlike other alternative instruments like fixed deposits, they do not have many restrictions when taking an exit position.
The best tax-saving possibilities are offered by mutual funds. Section 80C of the Income Tax Act exempts ELSS mutual funds from taxes up to Rs. 1.5 lakh annually. Additionally, ELSS Mutual Funds offer higher returns than other tax-saving investments like Tax Saving FDs, NPS, and PPF.
It allow investors to take a stake in multiple assets through just a single transaction. If you go investing in each of these securities individually, it will rack up the transactional cost. Besides, currently, the AMC costs have also been lowered.
A new investor may not have the right tools and knowledge to successfully invest in different securities. In such cases, having professional help with identifying stocks and assets that match the financial goals is another added benefit of investing in mutual fund.
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Parameters for selecting top-performing mutual funds
Before we discuss the best mutual funds for 2023, let’s check out the parameters used to shortlist the best mutual fund for you.
The fund’s history is the first parameter that will give a clear insight into the performance of the mutual fund. The investors will understand whether the fund is resilient enough to even tackle volatile markets.
The next thing to decide on is the investment objective. If you have a clear understanding of the financial goals you intend to meet, then it helps shortlist the mutual funds whose objectives collide with your requirements.
Apart from calculating the returns, you should also check the fees that the fund managers will charge for transacting on your behalf. Make sure that the costs should not completely negate profits earned.
Check the consistency of the fund
If you are new to the world of mutual funds, you can try selecting the best-performing mutual funds as they will have a positive track record. However, still, make sure to check the performance of the scheme during market downturns and across several business cycles.
Check the financial ratios
You can assess financial parameters like alpha and beta to determine the market. These ratios will help gauge the risk and return relation in the mutual fund scheme. Choose the best plan based on the outcome and your personal financial goals.
Fund Manager’s Performance
A seasoned professional will be able to better understand your requirements and guide you in choosing the right mutual fund. And since, they will also be managing the fund, knowing their track record about returns and client relations is also equally important.
Top 10 Mutual Funds of 2023
Below are the top-performing mutual funds that investors can plan to add to their portfolios in 2023.
Axis Bluechip Fund
The open-ended large-cap equity Axis Bluechip Fund is a product of the Axis Mutual Fund House. It officially opened on January 5, 2010.
The fund’s asset allocation is made up of around 89.8% equity, 9.44% cash and cash equivalents, and 0.76% debt. Its trailing returns are as follows: -11.84% (1 year), 11.5% (3 years), 11.75% (5 years), and 12.05% (since launch).
Axis Midcap Fund
The open-ended mid-cap equity Axis Midcap Fund is a product of the Axis Mutual Fund House. It debuted on February 18, 2011.
Around 88.2% of the fund’s assets are allocated to equities, 0.71% to debt, and 11.09% to cash and cash equivalents. Its trailing returns are -6.65% (1 year), 21.24% (3 years), 16.27% (5 years), and 17.8% (since launch).
Axis Small Cap Fund
Axis Mutual Fund House’s Axis Small Cap Fund – Regular Plan is an open-ended small-cap equity strategy. Launched on November 29, 2013, the fund’s asset allocation is made up of approximately 82.05% equity, 17.95% cash and cash equivalents, and 0% debt.
Its trailing returns are as follows: 2.87% (1 year), 27.87% (3 years), 18.97% (5 years), and 23.05% (since launch).
Kotak Emerging Equity Fund
The Kotak Emerging Equity Fund Regular Plan is an open-ended mid-cap equity scheme that is part of the Kotak Mahindra Mutual Fund House. The fund began operations on March 30, 2007.
Around 94.02% of the asset allocation is made up of stocks, 0% is made up of debt, and 5.98% is made up of cash and cash equivalents. It has trailing returns of 0.4% (1 year), 26.12% (3 years), 14.28% (5 years), and 13.81%. (since launch).
Mirae Asset Hybrid Equity Fund
Mirae Asset Hybrid Equity Fund – Regular Plan is a Mirae Asset Mutual Fund House proprietary hybrid open-ended strategy. The fund was established on July 29, 2015.
The asset allocation is roughly 73.43% equities, 21.27% debt, and 5.3% cash & cash equivalents. Its trailing returns across various periods are -3.88% (1 year), 14.28% (3 years), 10.25% (5 years), and 11.31% (since launch).
Mirae Asset Large Cap Fund
Mirae Asset Large Cap Fund – Regular Plan is a Mirae Asset Mutual Fund House Open-ended Large Cap Equity scheme.
The fund was established on April 4, 2008, and its allocation is around 99.47% equities, 0.52% cash & cash equivalents, and 0.0% loans. Its trailing returns over various periods are as follows: -7.09% (1 year), 15.19% (3 years), 10.77% (5 years), and 15.01% (since launch).
Parag Parikh Flexi Cap Fund
PPFAS Mutual Fund House offers an Open-ended Flexi Cap Equity program Parag Parikh Flexi Cap Fund – Regular Plan. On May 28, 2013, the fund was established.
Around 89.35% of the fund’s assets are allocated to equities, 0.55 percent to debt, and 10.1% to cash and cash equivalents. Its trailing returns over various periods are as follows: -7.86% (1 year), 23.65% (3 years), 16.09% (5 years), and 17.99% (since launch).
SBI Equity Hybrid Fund
The open-ended aggressive hybrid SBI Equity Hybrid Fund is a product of the SBI Mutual Fund House. Launched on December 31, 1995, the fund’s allocation is 68.45% to equities, 19.1% to debt, and 12.45% to cash and cash equivalents.
It has trailing returns of -3.12% (1 year), 13.58% (3 years), 10.83% (5 years), and 15.55% (since launch).
SBI Small Cap Fund
The SBI Mutual Fund House owns the open-ended small-cap equity SBI Small Cap Fund. On September 9, 2009, the fund was launched. The fund’s asset allocation is around 93.93% stocks, 0.0% debt, and 6.07% cash and cash equivalents.
Its trailing returns over various periods are as follows: 8.02% (1 year), 30.8% (3 years), 17.25% (5 years), and 20.42% (5 years) (since launch).
UTI Flexi Cap Fund
UTI Flexi Cap Fund – Direct Plan is a UTI Mutual Fund House open-ended Flexi Cap Equity program. The fund went live on January 1, 2013.
The fund’s asset allocation is roughly 96.51% equities, 0.19% debt, and 3.3% cash and cash equivalents. Its trailing returns over various periods are as follows: -14.1% (1 year), 19.83% (3 years), 14.12% (5 years), and 14.93% (since launch).
The best mutual fund is probably not what you’ll find if you start your search with just the word “best.” You should always pick a strategy that fits your investing goal, time horizon, and risk tolerance.
If you are unfamiliar with mutual funds or investing in general, you should always seek the
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