Indian stock markets have seen a number of splendid moments in 2017 with the benchmark Sensex breaching 33,000 from a level of around 26,600 in the beginning of this year. Stock market investment is equally referred to gambling, but even so, over the years the penetration of Indian stock market has been rising among the retail investors. However, another avenue for retail investors who find it difficult to keep a track of investments and to keep on analysing latest trends driving the markets, are mutual funds which may be a better option.
A mutual fund is nothing but a well-diversified portfolio or mixture of various asset classes — which varies scheme to scheme. Mutual fund investments are considered relatively less risky than direct stock investment, reason being — time to time rebalancing, managed by professionals, have an adequate mix of various asset classes, have easier option to enter and exit, and most important of all, an investor doesn’t need to be regularly involved in maintaining it. We bring you six mutual fund schemes recommended by IIFL which have returned up to 28% in one year.
ICICI Prudential Balanced Fund — 1-year return: 14.9%
It is an equity-oriented balanced fund which does tactical allocation between debt and equity based on the market outlook to ensure optimal risk-reward. “Investors who want to follow balanced approach i.e. 70% equity and ~30% debt can invest in the scheme to create wealth in long term,” according to IIFL.
Aditya Birla SL Top 100 Fund — 1-year return: 17%
It is an equity fund which primarily invests in top 100 stocks by market capitalization. “Aggressive investors who want to invest in large-cap stocks can invest in the fund to create wealth in long term,” according to IIFL.
Axis Focused 25 Fund — 1-year return: 22%
It is an equity fund that invests in high conviction stocks, maximum 25 stocks, from top 200 stocks by market capitalization. “Aggressive investors who want to take exposure in high conviction large-cap and mid-cap stocks can invest in the fund to create wealth in long term,” according to IIFL.
Tata Equity P/E Fund — 1-year return: 28.1%
It is a value-conscious equity fund which aims to invest 70-100% of its AUM in stocks whose 12 months rolling PE ratio is lower than 12 month rolling PE ratio of BSE Sensex. “Aggressive but value-conscious investors can invest in the fund to create wealth in long term,” according to IIFL.
HDFC Mid-Cap Opportunities Fund — 1-year return: 16%
It is a mid-cap equity fund which has allocated 60% to mid-cap stocks and ~28% to large-cap stocks to generate high returns for investors. “Aggressive investors who want to take exposure to mid-cap stocks can invest in the fund to create wealth in long term,” according to IIFL.
IIFL India Growth Fund — 1-year return: 12.9%
It is an equity fund which aims to generate significant alpha by investing in 20-25 high conviction stocks rather than typical 50-70 stocks. “Aggressive investors who want their fund managers to invest in high conviction ideas rather than numerous stocks can invest in the fund to create wealth in long term,” according to IIFL.
Domestic stock markets are on a continuous upmove since January this year. Sensex and Nifty has returned in a range of 24-26% so far. This year the broader index Nifty 50 crossed the five-digit mark of 10,000 and recently topped 10,350 while Sensex made a high of 33,340 from Indian stock markets are surging despite a continuous sell-off from FIIs (foreign institutional investors) since August 2017.