Mutual funds are an ideal choice for a newcomer as well as an experienced investor. You can invest in mutual funds to achieve different financial goals whether short term or long term.
Though it’s an ideal investment instrument, still you may find it difficult to choose which mutual fund is right for you at a specific time.
I have tried my best to help you out with the top 10 mutual funds in India to invest in 2021. You will be able to make an informed decision after going through this article.
You would also learn about important factors to consider when investing in mutual funds at the end of this article.
Top Large Cap Mutual Funds in India 2021
#1. Canara Robeco Bluechip Equity Fund
CR Bluechip Equity Fund is one of the best large cap mutual funds in India. CR bluechip has given an amazing return of 80% in the last 5 years.
Since the risk is moderately high you can invest in Canara Robeco if your investment period is above 5 years.
CR bluechip equity fund has a 5 star rating from CRISIL which makes it a reliable investment.
|Asset Size||1122.29 Cr|
|Fund Category||Large Cap|
Best for – consistent returns over longer time horizon
#2. Axis Bluechip Fund
Axis Bluechip Fund is another 5-star rating large-cap mutual fund that has outperformed in the recent past.
The fund has given more than 82% return in 5 years to the investor. Expense ratio of Axis Bluechip fund is also very low around 0.50%.
The fund includes various bluechip stocks such as Infosys, Bajaj Finance, and HDFC Bank.
|Asset Size||20480.17 Cr|
|Fund Category||Large Cap|
Best for – if you want to invest in high quality blue chip companies
Top Mid Cap Mutual Funds in India 2021
#3. Axis Midcap Fund
Axis Mid Cap Fund is one of the best mid-cap funds to invest in 2021. Axis Mid Cap Fund has an outstanding past performance history. If you look at the returns, the midcap fund has earned more than 80% returns in the last 5 years.
Crisil is giving it a five star rating. The expense ratio of this fund is around 2% which is considered average. The Axis Midcap fund is beating benchmark returns consistently every year.
|Asset Size||7877.53 Cr|
|Fund Category||Mid Cap|
Best for – If you want to invest in little risk oriented assets with higher returns
#4. DSP Midcap Fund
DSP Mid Cap Fund is the next fund in the mid-cap small-cap category. Mr. Vinit Sambre is currently managing DSP Midcap Fund who is an experienced fund manager, which is a plus point.
Another plus point is the expense ratio of this fund which is low (around 0.9%).
If you have a medium to long term perspective, you should definitely consider DSP Midcap Fund on priority.
|Asset Size||9467.35 Cr|
|Fund Category||Mid Cap|
Best for – higher returns over longer time perspective
Top Small Cap Mutual Funds in India 2021
#5. Axis Small Cap Fund
Axis funds are dominating mutual fund sectors whether its large, mid or small cap. Once again I am recommending another fund from Axis family – Axis Small Cap Fund.
The fund has a five star rating from CRISIL. This small cap fund has generated amazing returns to the investors. You can invest in Axis small cap if you have a long term goal of up to 10 years.
|Asset Size||3366.01 Cr|
|Fund Category||Small Cap|
Best for – if you want to take risk to get better returns than large or mid cap funds.
#6. Kotak Small Cap Fund
Kotak Small Cap Fund is another important fund in the small-cap category. Kotak Small cap is a 4-star rated fund that has performed so well since its inception.
The fund has an expense ratio of above 2% which is average.
You can go with Kotak Small Cap fund with a medium to long term perspective.
|Asset Size||2153.95 Cr|
|Fund Category||Small Cap|
Best for – higher returns with some risk if you have long term goal of above 10 years
Top Debt Mutual Funds in India 2021
#7. SBI Magnum Medium Duration Fund
If you are looking for a debt fund for medium duration of 3 to 5 years then go with SBI Magnum medium duration fund. SBI magnum is having a 4-star rating from CRISIL.
The fund has given a consistent performance since its inception and has given annualized returns of above 10% in the last 5 years which is impressive.
The fund has an expense ratio of above 1.44% which is average.
|Asset Size||6079.85 Cr|
|Fund Category||Debt (Medium Duration)|
Best for – consistent returns for medium time perspective of up to 5 years
#8. Kotak Dynamic Bond Fund
Kotak Dynamic Bond Fund invests in Government securities, NCD and bonds.The fund is having a 3-star rating. This fund is managed by an expert fund manager.
You can invest in this fund if you want to invest in safe investment instruments.
|Asset Size||2071.19 Cr|
|Fund Category||Debt (Dynamic Bond)|
Best for – safe investments with average returns for short time period.
Top ELSS Mutual Funds in India 2021
#9. BOI AXA Tax Advantage Fund
BOI AXA Tax Saver is one of the best tax saving funds. BOI AXA fund invests your money in large cap, mid cap as well as small cap stocks. I really liked the stock selection of this fund. However, the risk is moderately high for this fund.
If you are looking to invest money with higher returns perspective for a minimum 3 years with tax saving benefits, then go with BOI AXA Tax Advantage fund.
|Asset Size||350.92 Cr|
Best for – High performance investment instrument with tax saving advantage
#10. Canara Robeco Equity Tax Saver Fund
Canara Robeco Equity Tax Saver fund is my another favourite. If you are looking for a moderately low risk with high returns fund, CR equity tax saver is an option for you.
The fund invests in blue chip stocks like HDFC bank, Infosys and ICICI Bank.
Expense ratio is average and CRISIL rating is 5 star.
|Asset Size||1332.89 Cr|
Best for – safe investment option with tax savings.
Top Hybrid Mutual Funds in India 2021
#11. Canara Robeco Equity Hybrid Fund
Canara Robeco Equity Hybrid Fund is an aggressive hybrid mutual fund if you are looking for higher returns with lesser risks.
Managed by experienced fund manager, Canara Robeco equity hybrid fund has given magnificent returns of above 70% in 5 years.
The fund invests 73% of money in stocks whereas rest of the money in low risk and government securities.
|Asset Size||3906.04 Cr|
|Fund Category||Hybrid (Aggressive)|
Best for – If you are looking to invest in a hybrid fund for investment above 5 years.
Top Multicap Mutual Funds in India 2021
#12. UTI Equity Fund – Growth
UTI Equity Fund is an ideal Multicap fund for you. CRISIL has given it a 4-star rating. The investment portfolio of this fund is very impressive. The fund has generated more than 90% absolute returns in the last 5 years.
The expense ratio of this fund is also low which is a plus point.
If you want to invest (long term) in diversified funds to expect good returns, then you can invest in UTI Equity fund.
|Asset Size||13546.39 Cr|
|Fund Category||Multi Cap|
Best for – If you are looking for a diversified investment with consistent performance.
Important Factors to Consider Before Investing in Mutual Funds
#1. Funds Category
The primary factor for the shortlisting of funds such as large-cap, small-cap, mid-cap, ELSS, debt, or hybrid funds. You must know each category to segregate your funds.
#2. Fund Rating
Fund rating is the second important factor for shortlisting of your mutual funds. Consider ratings given by CRISIL or Value Research. Higher is the fund rating, better would be the fund. You can consider any fund with a rating above 3 stars.
#3. Fund Performance
Fund performance is another important selection parameter. You can research for the best-performing fund in the last 3 to 5 years.
#4. Fund Manager
The Fund manager is a person who takes decisions to buy, sell, or hold any stock in the mutual funds. Hence, the returns of the fund highly depends on the fund manager’s expertise and decision making.
#5. Asset Size
Asset size is also a crucial factor while selecting funds. You can consider the funds having asset size of 100 Cr or above.
#6. Expense Ratio
Expense ratio is one of the important parameters that affect funds return. Always remember that lower the expense ratio higher would be the return. I have shortlisted funds with low expense ratio.
#7. Fund Holdings
Lastly, another important factor for the selection of mutual funds is fundholding. Fundholding means what type of securities (stocks, bonds) a mutual fund is holding.
We have tried to shortlist the best mutual funds based on their performance and other important parameters discussed above.
You can start investing in these funds based on your financial goal, risk appetite & investment objective. But I would suggest you to do your own math before investing. Especially, if you are a beginner, then you should take advice from a mutual fund advisor instead of investing randomly in any fund.
If you have invested in any of the mutual funds mentioned above, do let me know in the comments.