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Best Mutual Funds and Their Performance

Thousands of investors are reaping benefits by investing in a diversified portfolio and are building real wealth. All thanks to equity mutual funds, a mutual fund ‌that makes frequent investments in stocks or shares of companies from various industries. The primary goal of these funds is to conjure aggressive long-term returns while mitigating concentration risk.

Are you interested in investing in equity mutual funds?

Here is a simple yet extensive guide to finding the best equity mutual funds.

What are the benefits of investing in a Mutual fund?

The following are some benefits that top equities mutual funds may provide investors:

●       Small-ticket investments:

Individuals are not required to make large financial commitments while investing in various stocks through equity funds. In most situations, they may begin a SIP with Rs. 500.

●       Diversification of one’s portfolio:

Investments by equity mutual funds are made proportionally in firm shares from various industries. This approach shields investors from the negative consequences of market volatility in certain areas..

●       Suitability:

Investors for whom it is difficult to invest in equities individually can consider equity mutual funds.

●       Risk reduction:

An Asset Management Company (AMC) comprises professionals that regularly analyze economic, geopolitical, and stock-level events. They assist individuals in making appropriate investments to limit the risk component.

●       Extensive regulation:

Equity mutual funds are under strict regulation of the Securities and Exchange Board of India (SEBI). To preserve transparency, all funds must report their month-end portfolios, NAVs, and periodic cost ratios.

Who can benefit from these funds?

Compared to other forms of mutual funds, equity-based funds have more variable returns. As a result, these funds are more suited for the long term, securing the investor from short-term market swings.

Such investments can benefit investors with a high-risk tolerance who are searching for long-term wealth appreciation. However, one must consider various aspects before selecting the finest equity mutual fund.

These funds will benefit:

●       Investors who want to participate in equities but lack the necessary skills or time:

Equity mutual funds provide an option for such investors. They only need to select a decent fund and invest in it regularly. The fund manager will handle the rest.

They will examine numerous technical and fundamental indications like a company’s profitability, its capacity to weather difficult times, the industry in which it works, etc.

●       Investors who wish to begin investing in stocks with a little sum:

Equity funds allow you to start with as little as ₹100.

●       Investors who can commit to a 5-year investment plan:

Investors with ambitions that are more than 5 years distant might consider equity funds. Retirement, children’s education, and other long-term ambitions are examples.

Equity funds might be a smart alternative even if an investor has no specific aim in mind and just wants to earn greater returns on his money for a minimum of 5 years.

●       Investors want to reduce their tax burden while increasing their wealth:

Equity funds can also benefit investors who seek to profit from tax savings and long-term capital building.

What about Taxation?

Tax on short-term capital gains:

If investors sell the acquired equity fund units within a year of acquisition, the capital gains are taxed at 15%, regardless of the size.

Tax on long-term capital gains:

This tax applies to investors’ equity share redeems made one year after the date of acquisition. Gains over Rs.1 lakh are taxed at 10% without indexation in India.

Tax Deducted at Source (TDS):

TDS of 10% is levied on dividends from equities mutual funds that exceed Rs.5000.

Concerning the Equity-Linked Savings Scheme (ELSS):

Investments in equity-linked savings programs are tax-free up to Rs.1.5 lakh under Section 80(C) of the Income Tax Act. However, this method requires a three-year lock-in term.

Best Indian Equity Mutual Funds:

Here is our list of the best equity mutual funds in India by Category.

Some Quality Equity Funds:

Value/Contra Mutual Fund:

  1. ICICI Pru Value Discovery Fund
  2. UTI Value Opportunities Fund
  3. Franklin India Focused Equity Fund
  4. HDFC Flexi Cap Fund

Growth Funds at a Reasonable Cost:

  1. Parag Parikh Flexi Cap Fund
  2. Mirae Asset Emerging Bluechip Fund
  3. Kotak Equity Opportunities Fund
  4. Canara Robeco Emerging Equities
  5. Mirae Asset Large Cap Fund (For conservative investors)

Best Performing Equity Mutual Funds

  1. Quant Tax Plan
  2. Quant Active Fund
  3. Quant Mid Cap Fund
  4. Parag Parikh Flexi Cap Fund
  5. Axis Midcap Fund
  6. PGIM India Midcap Opportunities Fund
  7. Mirae Asset Tax Saver Fund
  8. Mirae Asset Emerging Bluechip Fund
  9. SBI Focused Equity Fund
  10. PGIM India Flexi Cap Fund

Best Debt Mutual Funds in India:

Liquid Funds:

  1. Axis Liquid Fund
  2. ICICI Pru Liquid Fund
  3. Nippon India Liquid Fund

Equity Savings Funds:

  1. ICICI Pru Equity Savings Fund
  2. Mirae Asset Equity Savings Fund

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