Mutual funds are a preferred investment instrument of amateur and professional investors alike. Having equal popularity in both long term and short term approaches to investing, one question still remains, ‘Which funds to invest in?’ or ‘What are the top mutual funds to invest in?’

Here is a list of top 10 funds you can look forward to investing in 2020;

1. Mirae Asset Emerging Bluechip Fund – Direct

AUM: ₹ 9,229 Cr 

Expense Ratio: 0.83%

Category: Equity – Large-Cap and Mid-Cap

Source: Value Research. Returns as of January 3rd, 2020.

Neelesh Surana zeros in on stocks which are of high quality and have the potential to earn high returns, and due to which the fund does not have exposure in a large number of small-cap stocks. The Fund focuses to invest heavily in Large-cap, Mid-cap stocks. The fund justifies its name of Emerging Bluechip and its bottom-up approach while taking into account the risk parameters has resulted in generating alpha while keeping an eye on the volatility.

2. SBI Small Cap Fund – Direct

AUM: ₹ 3,035 Cr 

Expense Ratio: 0.98%

Category: Equity – Small cap

Source: Value Research. Returns as of January 3rd, 2020.

Under the Small Cap category, SBI Small Cap Fund is undoubtedly the best of the lot. Launched on the 9th of September, 2009, the fund had just turned 10 grabbing a major hold of the small-cap market. Being a small-cap fund, there is an inherent risk associated with this fund but has managed to generate sizeable returns for its investors consistently.

3. Kotak Standard Multicap Fund – Direct

AUM: 23,096 Crore

Expense Ratio: 0.87%

Category: Equity – Multi-Cap

Source: Value Research. Returns as of January 3rd, 2020.

Kotak Standard Multicap Fund is the largest fund in the Multi-cap Fund category with an AUM worth Rs 23,096 crore, and also ranks the highest in all the parameters of the Multi-cap Fund category. Kotak Standard Multicap Fund has outperformed the category and its benchmark index in 1, 3, 5 and 7-year periods. Kotak Standard Multicap Fund managed to fare well even in the bear phases.

4. Axis Long Term Equity Fund – Direct

AUM: 21,160 Crore (As on 30-Nov-2019)

Expense Ratio: 0.92%

Category: Equity fund- Equity Linked Savings Scheme (ELSS)

Source: Value Research. Returns as of January 3rd, 2020.

“The Investor” has awarded Axis Long Term Equity Fund the best mutual fund to invest in the Equity Linked Savings Scheme (ELSS) category. The fund has outperformed its benchmark with a cutting edge and has managed to generate returns of over 19.50% over the years. The additional advantage lies in the tax benefits the ELSS fund offer. 

5. Mirae Asset Tax Saver Equity Fund – Direct

• AUM: 2,877 Crore (As on 30-Nov-2019)
• Expense Ratio: 0.30%
• Category: Equity fund- Equity Linked Savings Scheme (ELSS)

Source: Value Research. Returns as of January 3rd, 2020.

In the top 10 mutual funds list, the Mirae Asset Tax Saver Equity fund has recently gained popularity. The fund has performed really well and generated exceptional returns of around 16.59% over a year. The fund has been present in the ELSS market for over 5 years now and has been performing exceptionally well. the feather in the cap lies in its next to nil expense ratio that is only 0.30% under the category. 

6. L&T Mid Cap Fund – Direct

• AUM: 5,928 Crore
• Expense Ratio: 0.75%

Source: Value Research. Returns as of January 3rd, 2020.

• Category: Equity fund- Midcap fund

Launched in the year 2013, the L&T mid-cap fund has been a popular fund under the mid-cap segment. Since its inception, the fund has managed to generate returns of over 18.30%. the fund maintained its value even during the low times of 2018-19 especially for mid and small-cap segments generating a positive return of around 2.12%. The fund has managed to outperform both its category and benchmark consistently. 

7. Nippon India Gilt Securities Fund – Direct

• AUM: 1,058 Crore
• Expense Ratio: 0.69%
• Category: Debt fund- Gilt

Source: Value Research. Returns as of January 3rd, 2020.

The Nippon India gilt securities fund has been present in the market since the year 2003 and has been performing well in its category. The fund has bagged 10.62% since inception which is a remarkable performance as far as gilt funds are concerned. 

The fund is concentrated across sovereign category bonds with 97.54% share that accounts for the high safety of the fund. The fund can be held for 7.59 years and 5.43 years as average maturity tenure and modified maturity tenure respectively. 

This fund is best suited for investors looking for a moderate return over minimal risk.

8. Franklin India Ultra Short Bond Fund- Super Institutional Plan – Direct

• AUM: 19,950 Crore
• Expense Ratio: 0.40%
• Category: Debt fund- Ultra-short duration

Source: Value Research. Returns as of January 3rd, 2020.

The fund predominantly invests in a combination of money market and debt securities that calls for high liquidity. the period of maturity is a maximum of 180 days but you can opt for a longer investment as well. 

The fund requires a minimum lump sum investment of Rs. 10,000 with zero exit load. The fund has invested in a mix of A+ and AAA-rated securities. 

9. Aditya Birla SL Short Term Opportunities Fund – Direct

• AUM:₹ 3,188  Crore
• Expense Ratio: 0.40%
• Category: Debt fund- Short duration

Source: Value Research. Returns as of January 3rd, 2020.

The fund invests in a combination of short term debt fund and money market securities. The fund majorly invests in AAA-rated and sovereign debt instruments. The fund has not only outperformed its benchmark but also its competitors in the segment. The fund requires a minimum investment of Rs. 1,000 and does not have any exit load. 

10. Axis Liquid Fund – Direct

• AUM: 30,628 Crore
• Expense Ratio: 0.11%
• Category: Debt fund- Liquid 

Source: Value Research. Returns as of January 3rd, 2020.

In the category of liquid funds, axis liquid fund is one of the best performing funds. The fund mainly invests in A1+ papers with 83.41% share. The fund holds an average maturity of 43 days and modified maturity as well, of 43 days only. Investors with low-risk appetite must look out for Axis Liquid Fund for better returns at a lower risk.

What is a Mutual Fund?

A mutual fund is an investment made by the money pooled from various investors who are invested towards a common or similar goal and wish to earn profits over their investments. Both corporate and government securities can be bought by the money pooled from the investors and are professionally managed by an expert called fund manager. The funds can be classified based on their equity exposure, risk profile and loss coverage.

Investing in mutual funds can be done in two ways- Lumpsum Investment or Systematic Investment Plan (SIP) Investment. Lumpsum stands for investing one time in mutual funds with a heavy amount say investing Rs. 5 lakhs directly in one go. SIP or Systematic Investment Plan refers to gradually investing in mutual funds with a fixed amount at regular intervals.