When choosing mutual funds, investors often focus only on returns. But over the long term, fund quality and cost play an equally important role. A high star rating reflects consistency across market cycles, while a low expense ratio ensures that more of the returns stay with investors.
Based on these two filters — 5-star rating by Value Research and low expense ratios — we shortlisted five equity and hybrid funds from SBI Mutual Fund. Debt and commodity funds were excluded to keep the focus on growth-oriented portfolios.
Together, these funds cater to different needs — aggressive equity investing, balanced allocation, goal-based investing for children, conservative planning, and tax saving.
1. SBI Contra Fund – Direct Plan – Growth (Expense ratio: 0.68%)
SBI Contra Fund is the lowest-cost fund in this list and follows a contra strategy — investing in stocks that are temporarily out of favour but have long-term potential.
Returns:
1 year: 7.01%
3 years: 21.49% (annualised)
5 years: 26.18% (annualised)
10 years: 17.66% (annualised)
Risk profile:
Risk level: Very High
Mean return: 19.46%
Standard deviation: 12.16% (relatively controlled volatility)
Beta: 0.90 (less volatile than the market)
Sharpe ratio: 1.09
Sortino ratio: 1.72
Alpha: 5.27 (consistent benchmark outperformance)
Who it suits: Long-term investors with high risk appetite who can stay invested through market cycles.
2. SBI Balanced Advantage Fund – Direct Plan – Growth (Expense ratio: 0.71%)
This fund uses dynamic asset allocation, increasing equity exposure when valuations are attractive and reducing it during overheated markets.
Returns:
1 year: 10.74%
3 years: 15.85% (annualised)
Risk profile:
Risk level: Very High
Mean return: 14.17%
Standard deviation: 6.19% (much lower than pure equity funds)
Beta: 0.62 (significantly less volatile than the market)
Sharpe ratio: 1.28
Sortino ratio: 1.98
Alpha: 4.10
Who it suits: Investors seeking equity participation with relatively better downside protection.
3. SBI Children’s Investment Plan – Direct Plan (Expense ratio: 0.82%)
This is an aggressive hybrid fund designed for long-term, goal-based investing such as children’s education or future milestones.
Returns:
1 year: 6.06%
3 years: 24.68% (annualised)
5 years: 31.00% (annualised)
Risk profile:
Risk level: Very High
Mean return: 23.73%
Standard deviation: 12.92%
Beta: 0.93
Sharpe ratio: 1.35
Sortino ratio: 1.84
Alpha: 10.55 (strong active outperformance)
Who it suits: Parents with long time horizons and high risk tolerance.
4. SBI Children’s Savings Plan – Direct Plan (Expense ratio: 0.86%)
This is the most conservative fund in the list, focusing on capital preservation with steady growth.
Returns:
1 year: 3.70%
3 years: 12.87% (annualised)
5 years: 12.05% (annualised)
10 years: 12.02% (annualised)
Risk profile:
Risk level: Moderately High
Mean return: 12.08%
Standard deviation: 4.44% (low volatility)
Beta: 0.91
Sharpe ratio: 1.32
Sortino ratio: 2.00
Alpha: 3.11
Who it suits: Risk-averse investors or parents closer to education goals.
5. SBI ELSS Tax Saver Fund – Direct Plan – Growth (Expense ratio: 0.92%)
This fund combines equity investing with tax savings under Section 80C, with a mandatory three-year lock-in.
Returns:
1 year: 6.89%
3 years: 25.84% (annualised)
5 years: 23.06% (annualised)
10 years: 15.97% (annualised)
Risk profile:
Risk level: Very High
Mean return: 22.07%
Standard deviation: 13.04%
Beta: 0.95
Sharpe ratio: 1.21
Sortino ratio: 1.96
Alpha: 7.38
(Data: Value Research)
Who it suits: Investors looking to save tax while building long-term equity wealth.
Summing up…
What unites these five SBI funds is not just their 5-star ratings, but their cost efficiency. With expense ratios all below 1%, these funds ensure investors don’t give up a large portion of returns to fees.
For long-term investors, especially those investing via SIPs, the combination of high fund quality, strong risk-adjusted performance, and low costs can quietly but meaningfully boost wealth over time — even in volatile markets.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.