All of us want to be and have the best, let alone be that in any part of life. Then, how are we supposed to want less than the best when it comes to choosing the mutual funds that we want to invest in? Growing financially also means choosing the right mutual funds down the lane. So, let’s get started at knowing how you can select the top-performing mutual funds in the Indian investment landscape.
What are Top-Performing Mutual Funds (Meaning)
Top-performing mutual funds in India have a track record of outperforming the market over a three to five-year period. In terms of performance, these funds would have exceeded their benchmark and peer funds. You must look at the fund’s performance over the prior business cycles.
How to Choose the Best Mutual Fund in 2022
A lot of investors pace the floor or stall when it comes to choosing their investment tools, just know that you do not have to do that – you can simply read into the points that are mentioned below to know the best mutual funds to invest in right now:
- a) The History of the Funds is a Must –
The fund’s history gives a record of the performance of the fund over time, including market ups and downs. This demonstrates the fund’s tenacity in the face of turbulent market conditions.
Because newly launched mutual funds and funds that are up for subscription lack a track record, it is impossible to anticipate their returns and performance throughout market cycles. The greatest mutual fund to invest in is one that has a strong track record of producing consistent returns across market cycles. It also provides evidence of well-researched investment techniques.
- b) Who is the Fund Manager? –
The fund manager is in charge of overseeing the fund’s operations. It is critical to examine the fund manager’s track record. An investor should keep track of the fund’s performance during market ups and downs. They can also examine the performance of the fund manager’s various plans.
- c) The Expense Ratio Can’t Be Overlooked –
The cost ratio is expressed as a percent or rate of the fund’s assets and is charged by the fund house along with other costs for managing the assets of a fund. The net return achieved by the investor will be the mutual fund returns minus the expense ratio. If an investor’s expense ratio is high, his or her returns will be reduced. As a result, while selecting a fund, an investor should opt for a plan with a lower expense ratio than its counterparts in the category.
- d) How Consistent is This Fund? –
Top-performing mutual funds in India have a track record of outperforming the market over a three to five-year period. In terms of performance, these funds would have exceeded their benchmark and peer funds. You must look at the fund’s performance over the prior business cycles. Examine the fund’s performance, particularly during market downturns. A top-performing fund’s performance is less affected by market changes than the typical fund. However, past results do not guarantee future outcomes.
You may also look at the historical NAV of Mutual Funds and the most recent NAV of Mutual Funds to get a sense of the mutual fund’s track record.
- e) What is the Financial Ratio? –
Financial statistics such as alpha and beta can be used to identify India’s top-performing mutual funds.
Mutual fund returns are intrinsically connected to risk. A return is a rise in the wholesome value of the capital that has been invested. Risk is known as the uncertainty that surrounds an investment and refers to the chance of receiving no or negative returns due to a range of factors. As a result – any investor must evaluate the risk-return potential, which financial ratios have made possible.
Top-Performers of 2022
- Canara Robeco Bluechip Equity Fund (G)
- Canara Robeco Bluechip Equity Fund (G)
- HDFC Floating Rate Debt Plan (G)
- HDFC Overnight fund (G)
- Parag Parikh Flexi Cap fund (G)
- Parag Parikh Flexi Cap fund (G)
- DSP Tax Saver Fund (G)
- ICICI Prudential Liquid Fund (Growth)
Will a Mutual Fund Investment Be Your Best Choice?
If you fit into the below mentioned boxes, then this kind of an investment is meant for you:
Achievement of financial objectives: Investors who wish to achieve their investment objectives should invest in top mutual funds that meet their requirements. Investing in top mutual funds that have provided superior returns than their peers on a consistent base would help investors attain their goals faster.
Better returns than traditional savings choices: Traditional savings options provide a fixed interest rate. However, because it is almost risk-free, the returns on these savings strategies are similarly low. Mutual funds, on the other hand, cannot guarantee returns. It can, however, offer larger returns than typical saving choices such as bank fixed deposits.
People who want to invest on a regular basis: SIP allows you to invest in top mutual funds on a regular basis, such as monthly, weekly, or quarterly. You can achieve your investment goals by investing in the top SIP mutual fund. You can begin investing in mutual funds through SIP with as little as Rs. 100 per month in any of India’s best SIP schemes.
Professional money management: Fund managers are those who manage mutual funds. Their role is to pick the best equities or debt instruments to assist the fund earn high returns and meet its goals. Individuals seeking competent investment management can therefore invest in these top mutual funds.
Diversity: Depending on the type of fund, the best-performing mutual funds invest in a basket of securities that aid in diversification, regardless of the amount invested. Diversification reduces the negative impact on the overall portfolio of a single (or a few) investment security’s bad performance.
Final Thoughts
Growing in the share market is hard – that is exactly when mutual funds make it easy for you. But you would have to remember, and it gets easy only when you begin to invest in the right kind of funds.
