Mutual funds are the fastest-emerging investment option for the long-term creation of wealth. However, the availability of a large number of mutual funds in the market has made it a difficult task to select the best plan to suit your requirement, budget and preferences. Have I picked the right mutual fund? Or which is the best mutual fund to invest? “This is the most common question raised by investors in many financial forums. However, it is most difficult to answer the queries because without knowing the risk profile and investment horizon, no one would be able to suggest the best portfolio. One size never fits all. Therefore, a single portfolio of top 10 mutual funds is never suitable for every investor,” says Rajeev Agarwal, Founder, Wealth Discovery.
In fact, he suggests that you should go for equity schemes if you have
# High risk appetite
# Long-term financial goals
# Minimum investment horizon of five years
Similarly, you should go for debt schemes if your risk appetite is low or you need some regular income with short-term requirements.
Also, among equity funds, every investor should have a different set of portfolio according to one’s risk profile. For example,
# A conservative investor should invest in equity-oriented balanced schemes or large cap mutual fund schemes.
# A moderate investor should invest in diversified and large cap mutual fund schemes.
An aggressive investor should pick up mid and small cap funds.
“Investors can also make a combination of schemes to make a suitable portfolio according to their financial goals and risk appetite. When making a good portfolio of mutual funds, we always do not have to pick the best ones in a category. We only need to choose one that matches our investment strategy and fits our risk appetite,” Agarwal suggests.
Below is the list of some of the equity-based mutual funds which may be an ideal fit for a well-diversified broad-based portfolio:
| Scheme | Category | NAV | Asset Size (in crore) | Returns (In %) | ||
| 1yr | 3yr | 5yr | ||||
| Birla Sun Life Top 100 Fund | Large Cap Fund | 56.278 | 2,262.79 | 15.7 | 13.0 | 19.9 |
| SBI BlueChip Fund | Large Cap Fund | 36.795 | 10,099.40 | 12.9 | 14.4 | 20.1 |
| Birla Sun Life Frontline Equity Fund | Large Cap Fund | 212.250 | 13,116.39 | 14.0 | 13.1 | 19.7 |
| ICICI Pru Value Discovery Fund | Diversified Fund | 135.710 | 14,747.30 | 6.2 | 10.9 | 21.8 |
| HDFC Balanced Fund | Balanced Fund | 142.398 | 9,818.56 | 15.4 | 13.9 | 19.3 |
| Birla Sun Life Advantage Fund | Diversified Fund | 432.380 | 3,112.29 | 20.4 | 20.5 | 25.2 |
| DSPBR Small and Midcap Fund | Small and Midcap Fund | 52.855 | 3,537.72 | 19.1 | 20.2 | 25.4 |
| Franklin India Smaller Companies Fund | Small and Midcap Fund | 56.506 | 4,579.29 | 17.8 | 20.2 | 31.5 |
| Mirae Asset Emerging Bluechip Fund | Small and MidCap Fund | 47.716 | 3,306.87 | 26.5 | 25.0 | 31.9 |
| HDFC Midcap Opportunities Fund | Small and MidCap Fund | 53.518 | 14,625.43 | 16.4 | 19.1 | 26.3 |
However, you also need to keep in mind that past performance is no guarantee for the better performance of a fund in the future also. So, you need to select your fund carefully.
(These mutual funds have been recommended by Wealth Discovery. Although due care has been exercised by them while selecting these funds, readers are advised to consult their financial adviser before investing in any of these funds.)