A modern investor's portfolio will most likely contain mutual funds. These instruments are emerging as a cornerstone of investment strategies for individuals ranging from young novice investors to seasoned financial enthusiasts.
Let’s take a deep dive into Equity mutual funds and try to get a good understanding of some of the best ones out there in the market.
What are Equity Mutual Funds?
Equity mutual funds pool in money from various individuals to invest in the stock market, allowing you to gain from the market's movements. These funds are managed by expert professionals who aim for capital growth over a long-term period.
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Why should you add Equity Funds to your portfolio?
By allocating investments in several stocks, equity funds help to mitigate the risk tied to the performance of any single company. This is done through the expertise of seasoned fund managers, who apply their knowledge in stock selection and study market trends.
Equity funds' core aim is capital appreciation, which means they focus on increasing the value of the fund's holdings over the long term.
Who should invest in Equity Funds?
-
If you have long-term investment goals
These funds are especially suitable for you if you're planning to invest over an extended period, as they are geared towards capital growth over time.
-
If you are comfortable with the risk
If you are comfortable with the stock market's ups and downs and can bear short-term volatility, equity funds might be your right investment choice.
-
If you are seeking growth opportunities
If you are attracted to achieving higher returns and increasing your capital despite the risks associated with the market, equity funds offer a valuable opportunity for your investment portfolio.
Equity Mutual funds to invest in India in 2024
Equity Mutual funds can be further divided into segments based on market cap, momentum, sectoral and thematic styles. This categorisation is used as a primary basis to pick stocks within the mutual fund portfolios.
Let’s look at the returns earned by some of the mutual funds within large & mid-cap, flexi cap and ESG thematic mutual fund segments:
Equity: Large & Midcap segment
This category of mutual fund invests primarily in equity stocks of large and mid-cap companies. Here is a list of some top-performing large and mid-cap schemes:
Scheme Name
|
AUM (Crore)
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
Since Launch
|
Motilal Oswal Large and MidCap Reg Gr
|
3,297.45
|
46.32
|
23.26
|
-
|
-
|
22.77
|
Quant Large & MidCap Gr
|
1,689.23
|
58.69
|
30.82
|
25.97
|
23.26
|
14.98
|
Mahindra Manulife Large & Mid Cap Fund Reg Gr
|
1,825.46
|
50.94
|
23.92
|
-
|
-
|
24.72
|
Bandhan Core Equity Reg Gr
|
3,723.34
|
50.7
|
23.96
|
20.41
|
16.6
|
13.76
|
HDFC Large and Mid Cap Gr
|
16,033.22
|
47.8
|
24.58
|
21.88
|
15.09
|
11.87
|
Note: The above date represents returns earned by top large and mid-cap mutual funds in India
Equity : Flexi Cap
Flexi-cap funds allocate their funds across large-cap, mid-cap, and small-cap categories. This means they spread their investments among stocks from companies of all sizes, from the largest and most established to the smaller and more growth-oriented.
Scheme Name
|
AUM (Crore)
|
1 Year
|
3 Years
|
5 Years
|
8 Years
|
Quant Flexi Cap Gr Dir
|
3,539.90
|
60.94
|
35.81
|
31.91
|
26.21
|
JM Flexi Cap Dir Gr
|
1,437.98
|
60.06
|
27.92
|
24.93
|
22.24
|
Motilal Oswal Flexi Cap Fund Dir Gr
|
9,131.44
|
47.4
|
14.66
|
14.64
|
15.32
|
HSBC Flexi Cap Gr Dir
|
4,115.56
|
47.09
|
22.52
|
20.51
|
19.22
|
Franklin India Flexi Cap Dir Gr
|
14,165.22
|
45.07
|
22.44
|
20.54
|
17.59
|
HDFC Flexi Cap Dir Gr
|
47,642.42
|
42.93
|
26.1
|
21.17
|
20.08
|
Note: The above date represents returns earned by top Flexi cap mutual funds in India
Equity: ESG Thematic Investing
Thematic-ESG mutual funds concentrate on industries that promote sustainable growth, such as renewable energy, clean technology, and efficient resource management.
Scheme Name
|
AUM (Crore)
|
1 Year
|
3 Years
|
Since Launch
|
Quant ESG Equity Gr Dir
|
214.66
|
52.18
|
36.47
|
43.12
|
ICICI Pru ESG Exclusionary Strategy Dir Gr
|
1,421.31
|
40.26
|
17.94
|
21.57
|
SBI Magnum Equity ESG Fund Dir Gr
|
5,471.50
|
29.32
|
15.35
|
14.72
|
Kotak ESG Exclusionary Strategy Dir Gr
|
1,000.24
|
31.71
|
14.75
|
15.58
|
Axis ESG Integration Strategy Dir Gr
|
1,353.31
|
31.93
|
12.45
|
18.5
|
Note: The above date represents returns earned by top ESG mutual funds in India
Summing up
The mutual fund sector is diverse and offers multiple categories, each carrying its own level of risk. Selecting the most suitable fund for yourself involves finding one that matches your risk tolerance. For instance, large-cap equity funds typically present lower risk than flexi-cap or small-cap funds.
Your investment requirements can vary from time to time. So, pick a mutual fund to meet your risk tolerance and time horizon. Investors should base their investment choices on these factors and ensure they make an informed investment decision.
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