Investing in mutual funds is a great way to participate in the Indian stock market. Mutual funds naturally offer certain advantages over individual stocks, such as diversification and better downside protection, among others.
However, with a plethora of different mutual funds and with each of them performing differently, which fund do you choose to put your hard-earned money in?
To help you decide, we’ve come up with a list of the best mutual funds to invest in India in the year 2023. Continue reading to find out what they are.
Top 7 Mutual Funds to Invest in India in 2023
Taking the various financial goals and risk appetites of investors into consideration, we’ve split our list of the best mutual funds to invest in India into three sections - equity mutual funds, debt mutual funds, and hybrid mutual funds.
Top Equity Mutual Funds in 2023
Equity mutual funds invest exclusively in the equity shares of companies. These funds are designed for maximum wealth creation. However, equity funds are considered to be very risky and are better suited for individuals with a high tolerance for risk. Some of the funds that you can consider investing in are as follows.
1. Tata Digital India Fund
The Tata Digital India mutual fund is a sectoral fund that invests primarily in technology companies. With over 80.1% of its total fund value invested in large-cap companies, this mutual fund has generated returns of up to 30.26% in the last three years alone. The top four companies in the mutual fund include big names such as Infosys, TCS, HCL, and Bharti Airtel. The current NAVof the fund as on February 08, 2023, is Rs. 37.47.
2. Quant Small Cap Fund
As the name itself signifies, this mutual fund invests predominantly in small-cap companies. However, the portfolio consists of a few mid-cap and large-cap entities as well. In the past three years, the fund has generated returns of about 48.10%, making it one of the best mutual funds to invest in India. The NAV of the fund as on February 08, 2023, is Rs. 150.69.
3. Quant Infrastructure Fund
Another sectoral mutual fund, the Quant Infrastructure fund, has its primary investment focus on infrastructure companies. With over 60.83% of its investments in large-cap, about 20.45% in mid-cap, and 18.26% in small-cap entities, the mutual fund has managed to generate 37.70% returns in the past three years alone. The NAV of the fund as of February 08, 2023, is Rs. 23.35.
Top Debt Mutual Funds in 2023
Debt mutual funds, on the other hand, invest exclusively in debt instruments like debentures, bonds, and other money market instruments. Unlike equity funds, these funds are designed to offer stable returns to investors and are well-suited for individuals with a low tolerance for risk.
1. Aditya Birla Sun Life Medium Term Direct Plan
The Aditya Birla Sun Life Medium Term mutual fund has more than 44% of the total investments in debentures, 30% in government securities, and 6.23% in non-convertible debentures. Over the past three years, the fund has generated a return of 13.49%, which is the highest in India. The NAV of the mutual fund is around Rs. 33.85 as of February 08, 2023.
2. ICICI Prudential All Seasons Bond Fund Direct Plan-Growth
With a majority of its investments in securities issued by the government of India and non-convertible debentures, the ICICI Prudential All Seasons Bond Fund is one of the best mutual funds to invest in India. It has managed to produce a return of about 7.12% in the past three years, with its NAV currently at around Rs. 32.42 as of February 08, 2023.
Top Hybrid Mutual Funds in 2023
Hybrid mutual funds invest in both equity shares and debt instruments. Depending on the mutual fund you invest in, the percentage of investment in both these assets may vary slightly. Hybrid mutual funds are designed to offer the best of both worlds - high wealth creation opportunities and stable returns. Investors with moderate risk tolerance levels may consider investing in hybrid mutual funds.
1. Quant Multi Asset Fund
This hybrid mutual fund from Quant holds both equity and debt instruments in the ratio of 63.4% and 8.4%, respectively. The mutual fund’s returns in 3 years are stellar at 30.15%, making it one of the best-performing hybrid funds in India. The NAV of the mutual fund as of February 08, 2023, is Rs. 89.32.
2. Kotak Multi Asset Allocator FoF
Out of the total investments made by the Kotak Multi Asset Allocator, around 53.76% is in the equity market, and about 23.23% is in the debt market. In the previous three years, the fund has managed to produce a return of about 20.08%, with its NAV as of February 08, 2023, being around Rs. 160.05.
Conclusion
So there you have it. These are the best mutual funds to invest in India right now. That said, before you go ahead and put your hard-earned money, make sure you take a look at some mutual fund investment strategies. They can help make you a better investor and can increase the chances of getting stellar returns. However, to be on safer side and have some calculative understanding of returns, you can use mutual fund return calculator and draw better map of investing for yourself.
Now, to be able to invest in mutual funds, stocks, or even upcoming IPOs, for that matter, you would need to have an active Demat and trading account. If you don’t have one, don’t worry. Simply head over to the website of Motilal Oswal to open a Demat accountand a trading account for free through a completely digital application process.
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