Top 5 Large Cap Mutual Funds

Below is the list of best performing Large cap mutual funds to invest in India.

Name of Fund 5 Year Returns (p.a.) Scheme Category
Axis Bluechip Fund 13.50% Large Cap
Prudential Bluechip Fund12.90% Large Cap
Mirae Asset Large Cap FundICICI13.76% Large Cap
SBI Bluechip Fund14.01% Large Cap
Kotak Bluechip Fund14.24% Large Cap
These funds invest minimum 80% of its assets in large/bluechip companies.These funds are less volatile as they invest in index heavyweights.

What Are Large Cap Funds?

Large-cap funds are primarily defined as open-ended equity schemes investing in large companies or stocks.Large-cap mutual funds are considered as one of the safest investments in equities because they have good returns and market volatility is quite lower than the other equity funds like mid and small-cap funds.Investors are willing to invest their assets in large-cap, even though the large or well-established companies have a higher share price, primarily because of good returns and better stability.

2. What are the main features of large-cap funds?

  • Business stability - Large-cap companies have generally built a reputation in the market over the long term of business and quality services. They are less likely to be affected by hazardous situations in an economy where the company stops generating profits. Thus, the main feature of large cap companies is the stability they are supposed to provide to your portfolio.
  • Dividend Pay-outs -Large cap companies also offer the benefit of stable dividend pay-outs that can compensate shareholders despite short-term growth shortages and these dividends can show impressive accumulated returns in the long-term wealth creation process.
  • Management and business quality -The management of a large-cap company takes great experience and entrepreneurial spirit to lead a sustainable and sustained growth. Management and business quality of the companies are essential parameters when choosing a stock to invest in. The growth of these companies can be predicted by management to make the right decisions and deliver performance & results.
  • Sync with the economy -The performance of large-cap companies generally represents the economic scenario. Investment in large-cap companies is well reflected in market indices. They have the ability to forecast the economy. Such companies are rarely affected by market volatility. Although, large-cap stocks are priced high, they are beneficial for long-term investment in a growing economy.

Top 5 Mid Cap Mutual Funds

Below is the list of best performing Mid cap mutual funds to invest in India.

Name of Fund 5 Year Returns (p.a.) Scheme Category
DSP Midcap Fund 17.52% Mid Cap
L&T Midcap Fund16.70% Mid Cap
Aditya Birla Sunlife Midcap Fund17.20% Mid Cap
SBI Magnum Midcap Fund17.49% Mid Cap
Sundaram Midcap Fund18.98% Mid Cap
These funds invest minimum 65% of its assets in mid size companies and you should invest for a minimum time horizon of 5 years.

What are Mid-Cap Equity Funds?

Mid-cap equity funds are those types of mutual funds that invest in equity shares of mid-cap companies. Mid-cap companies are ranked between 101 and 250 in terms of market capitalization. Since these companies fall between large-cap and small-cap entities, they provide advantages and disadvantages over both of them. Mid-cap funds carry more risk than large-cap funds but generate higher returns than them. Further, fluctuations in these funds are comparatively lower than small-cap funds but tend to offer lesser returns.

Examples of mid-cap entities include – City Union Bank, Godrej Industries, Aditya Birla Capital, CRISIL, and more.

Who should invest in Mid-Cap Equity Funds?

First-time investors are not advised to invest in mid-cap funds. This is because mid-cap funds are subject to high market fluctuations as contrasted to large-cap funds. This makes them a great choice for investors having higher risk tolerance. Moreover, mid-cap companies have high growth potential and can generate quick and huge returns if invested for a longer duration. In a nutshell, investors who are looking for long-term investment and have an appetite for high risk must proceed forward with mid-cap funds.

What points are to be considered before investing in Mid-Cap Equity Funds?

  • Duration of investment: Mid-cap companies are in their growth phase, and some of them can also become large-cap firms in future. So, staying invested in such funds for a longer period can help in generating high profits. To make the best out of mid-cap funds it is recommended to have an investment horizon of at least eight to ten years.
  • Costs: Like large-cap funds, there is a fee associated with mid-cap funds for managing your investments, known as the expense ratio. A mid-cap scheme with a lower expense ratio is more cost-effective and generates better returns on your investment.
  • uTax implications: According to SEBI’s mandate, these funds are subject to dividend distribution tax of 10%, and capital gains tax, the rate of which depends on the period of your investment. Short-term capital gains are taxed at 15%, whereas long-term capital gains above Rs. 1 lakh are taxed at 10% without indexation.

Top 5 ELSS Mutual Funds

Below is the list of best performing Tax Saving mutual funds (ELSS) to invest in India.

Name of Fund 5 Year Returns (p.a.) Scheme Category
Axis Long Term Equity Fund 14.30% ELSS
IDFC Tax Saver Fund 12.67%ELSS
Franklin India Taxshield Fund12.90%ELSS
DSP Tax Saver Fund13.86% ELSS
Kotak Tax Saver Scheme13.90%ELSS
You can invest in ELSS funds for tax savings u/s 80c of income tax act with a lock in of 3 years.It is one of the best options to save tax with a growth of investment amount.

Define ELSS funds?

ELSS is a type of diversified equity mutual fund which is eligible for tax exemption under Section 80C of the Income Tax Act, and provides double benefits of capital appreciation and tax benefits. These funds have a lock-in period of three years.

How investing into ELSS funds can help an investor in better tax planning?

ELSS or Equity Linked Saving Scheme is the one stop solution of mutual funds investment for tax savings. Investment in these funds can help the investor in better tax planning due to the following reasons:

  • Investments made in ELSS are eligible for tax deduction up to Rs.1, 50,000 under Section 80C of the Income Tax Act, but with a minimum 3 years lock in period.
  • Investment in ELSS could provide capital growth over the long term since these funds invested in the equity market. And Equities over a longer time frame have the potential to outperform traditional tax-saving instruments.
  • The returns on ELSS funds are subject to a Long-Term Capital Gains (LTCG) taxed at 10%. However, long term capital gains, up to Rs. 1.5 lakh per year, are exempted from taxes.

Top 5 Liquid Mutual Funds

Below is the list of best performing Liquid mutual funds to invest in India.

Name of Fund 5 Year Returns (p.a.) Scheme Category
Baroda Liquid Fund 6.25% Liquid Funds
L&T Liquid Fund6.10% Liquid Funds
ICICI Prudential Liquid Fund6.16% Liquid Funds
Axis Liquid Fund6.20% Liquid Funds
Tata Liquid Fund6.20% Liquid Funds
These are best funds for parking your money for a very short period of time.The funds invest in securities which have maturities of less than 91 days. You can withdraw your money after 7 days without any exit load.

What are liquid funds?

Liquid funds fall into the category of debt mutual funds, which invest in financial instruments such as treasury bills (TB), commercial paper (CP), bank fixed deposits (corporate deposits) and other debt securities with maturity up to 90 days.The scheme can generate optimal returns with a high degree of liquidity in a prudent portfolio mix that includes money markets and debt instruments.

How it is better to invest in liquid funds rather than parking your surplus money in savings account?

There are various benefits of liquid funds due to which investment in liquid funds is much better than parking surplus money in saving accounts, these benefits are as follows:

  • Better returns than a savings account and FD: One can expect the annual return of 6-7% from liquid funds which is better than savings bank interest (3-4%) and return from FD (5-6%).
  • No minimum balance required: In savings bank account one has to maintain a minimum balance. But with liquid funds, there is no limit on minimum or maximum investment.
  • No lock-in period: Liquid funds do not have any lock-in period and it has the maturity period of only 90 days. But, there is a graded exit load, if one redeems their money within 7 days of investment.
  • Easy redemption:Redeeming liquid funds is very easy and the money will be credited within 1-2 days in the individual’s bank account.
  • Lowest interest rate risk: Among all the debt funds available in the market liquid funds have the least interest rate risk.
  • Different plans available: Liquid funds are available for different time periods like daily, weekly, monthly dividend and growth plans. One can choose any plan based on the requirements and tenure.

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