List Of Mutual Fund Companies In India - In this article, I will share my top 10 SIP mutual funds to invest in India in 2018. Every year, I will publish my top 10 SIP mutual funds to invest in India. Continuing this trend, I will publish a list for 2018.
Before going any further, let us first analyze the top 10 SIP mutual funds to invest in India in 2017. Remember one thing, due to the continued uptrend of the market, most of the funds in stocks performed well and gave you better returns.
List Of Mutual Fund Companies In India
However, I always worry about choosing a fund that is old, that has been through all market cycles, given its consistent performance and downside protection.
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It should be noted that several funds failed to beat the benchmark index during the year. However, they easily beat the benchmark if you look at 3, 5 or 10 year returns. So you don't have to worry about it.
It is always better to know the reason for your investment before making a BLIND investment. So, before you jump into investing, read what I share below.
I have noticed that many investors just invest in mutual funds, they just have excess money. The second reason could be that one is guided by the fact that mutual funds are the best in the long term compared to bank FDs, PPFs, RDs or even LICs.
If you are clear about why you are investing, when you need the money, and how much money you need at that time, then you will have better clarity in choosing a product. First, define your financial goals.
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You need to know the current value of that particular target. Additionally, you also need to know the inflation rate associated with that particular goal. Remember that each financial goal has its own inflation rate. For example, the cost of your child's education or marriage is different from the inflation rate of household expenses.
By determining the present value, time horizon and inflation rate for that particular goal, you can easily know the future value of that goal. This future goal value is your target amount.
I wrote a separate article on how to set your financial goals. Read the same in “Financial goals – How to set your goals before you start investing?”
The next step is to determine the asset allocation. Whether it is a short-term goal or a long-term goal, having the right asset allocation between debt and equity is essential. Personally, I prefer the asset allocation below. Remember that this may vary from person to person. However, the main idea behind asset allocation is to protect your money and keep you on track to achieve your financial goals.
Etf (exchange Traded Funds)
If the objective is less than 5 years, do not touch your own product. Use the debt products of your choice like FD, RD or Debt Funds.
When choosing a debt product, make sure the maturity of the product matches your financial goals. For example, the PPF is the best debt product. However, it must be in line with your financial goals. If your PPF maturity is 13 years and your goal is 10 years, you will not achieve your financial goals.
The next and most important step is the expected return of each asset class. For stocks, you can expect a return of 10% to 12%. For debt, you can expect a return of around 7%.
When your expectations are set, there is less chance of deviation or overreaction to volatility.
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Once you know what your expected return is for each asset class, the next step is to determine your expected return on the portfolio.
Suppose you have determined that your debt/equity split is 30/70. The expected return on debt is 7% and the expected return on equity is 10%, so the expected total portfolio return is as shown below.
Once the objectives are set with the target amount, the asset allocation is done, the expected return of each asset class is determined and the last step is to determine the amount to be invested each month.
There are two ways to do this. One is a fixed monthly SIP for a target period. Second, a fixed % increase each year until the target period. Decide what suits you best.
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How many mutual funds do we have? Is it 1, 3, 5 or more than 5? The answer is simple…you don't need more than 3 or 4 funds to invest in mutual funds. Whether your investment is Rs 1000 per month or Rs 1 lakh per month. With a maximum of 3-4 funds, you can easily build a diversified equity portfolio.
Having larger funds does not give you enough diversification. Instead, in many cases, it can lead to overlaps in your portfolio and lead to inefficiencies.
Remember that equity funds and debt funds are taxed differently. So, you must also understand the tax part before you start investing. I tried to explain the same in the image below.
Hope you all understand the tax part. If you're still in doubt, check out my latest article Budget 2018 - Mutual Fund Taxation for Fiscal Year 2018-19.
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First, I'll select the top 15 funds in each category based on their relative performance since inception. Funds that have consistently outperformed the benchmark are listed in these 15. When I have a list, I choose funds based on a risk-return analyzer.
Many simply choose funds based on attractive returns. However, at what price does the fund offer you better returns? As much as it protects my investments in a downturn, that's what separates a good fund from a bad one.
Again, I'm not saying that these 10 funds are considered "10 Best SIP Mutual Funds to Invest in India in 2018". There may be fewer other funds that can compete with these funds. However, I might be biased against a few mutual fund companies (just because of their size and how long they have been in India). Below are the measurements I used to make my final fund selection.
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If the fund passes all these tests and gives me at least 80% points since its creation, I will be added to my list.
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There are other funds in this category which are also on my radar like SBI Bluechip Fund, Birla Sunlife Frontline Equity Fund. However, I found no reason to change my recommendations from last year. Therefore, I continue the same funds.
In this category, I'm a little skeptical of ICICI Pru Value Discovery as a fund that underperformed throughout the year. Those who have invested in this fund based on my recommendation should continue to monitor this fund for about another year. Alternatively, you can also opt for a fund like SBI Magnum Multi Cap Fund.
Last year I recommended HDFC Midcap Opp Fund and Franklin India Prima Fund. I keep the same foundations this year because I found no reason to change them. You can also have a fund like Mirae Asset Emerging Bluechip Fund.
Last year I recommended DSPBR Micro Cap Fund and Franklin India Smaller Companies Funds. However, DSPBR does not currently accept new investments. So those who already have SIP in this fund can continue with this fund without any worries. New investors can benefit from the Franklin India Smaller Companies Fund.
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The definitive list of top 10 SIP mutual funds to invest in India in 2018 is given below.
Conclusion: - Perhaps you were surprised that I did not change funds this year. Yes, because investing in stocks does not mean changing funds frequently. However, it is also necessary to monitor the effectiveness of the fund. The funds I have selected are legacy funds that have shown consistent performance throughout market cycles.
You may see other funds that significantly outperform these funds. But remember that during a bull market, even the worst fund will give you the BEST returns. The true test of a fund will become evident when the market begins to decline, ie downside protection.
If the benchmark is down 20% and your fund is down 10-15%, that's the best fund for me. Because it protected from falls. So always look for consistency and other metrics rather than looking for profits.
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Also, before making the investment, try to inform my GYAAN about the investment. Because I found that many blog readers have no idea why they are investing and how long they should be investing.
What is the best mutual fund app in India? Many of you are receiving advice on investing in mutual funds. Then the next question is which
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