In this post, I will publish my Top 10 Best SIP Mutual Funds to invest in India in 2021 for my blog readers. If you are a reader of my blog for a long, then you know very well that I publish my Top 10 Best SIP Mutual Funds to invest in India on yearly basis.
Let me recap of what I have recommended last year.
If you remember, last year I stayed away from active fund recommendations and adopted the passive funds (Index Funds) and the reasons are as below:-
I want to share few of my Tweets of past where I hinted and shared why I am adopting the Index Funds.
By adopting the Index investing, you are ending the search for BEST MUTUAL FUND COMPANY and BEST FUND MANAGER. The only risk you can’t avoid is market risk, which you have to manage by proper asset allocation between debt and equity (I mean at the portfolio level).
However, adopting Index investing requires a lot of patience. Because even though many claims to be patience, they take knee jerk reaction when the market starts to fall.
The negativity of Index Funds is that there is no downside protection as the fund manager has to replicate the index. He can’t take his call and make sure to keep in cash mode during the market fall. Hence, the Index Funds will fall equally like Index.
During this phase, many investors start to compare the Index Funds with Active Funds (which may be managed the downside protection well) leading to come out from Index Funds.
However, if one did the proper asset allocation with debt and equity (within equity also) with respect to their goals, then we can easily protect such a downfall at the portfolio level.
Paying a higher fee for active funds is justified only if the fund manager generates more than ONE PERCENT compare to Index Funds CONSISTENTLY. If it is not possible, then there is no point in adopting the active funds.
It is a proven record that no Fund Manager on this EARTH can beat the Index consistently. Hence, few years of underperformance may cost in a big way than the few years overperformance.
Willing to share the quotes of few whom I admire a lot:-
“The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course.”
– John C. Bogle, The Little Book of Common Sense Investing
“If I had to summarize my views on investing, it’s this: Every investor should pick a strategy that has the highest odds of successfully meeting their goals. And I think for most investors, dollar-cost averaging into a low-cost index fund will provide the highest odds of long-term success.” – Morgan Housel, The Psychology of Money (Timeless Lessons on Wealth, Greed and Happiness)
It is the toughest task for ME and YOU to find such a RAREST of RARE SPECIES (FUND MANAGER) who can generate CONSISTENTLY more than 1% higher returns than the BENCHMARK.
How to choose the Best Index Funds?
When you decided to invest in Index Funds, you have to just concentrate on three aspects of the funds and they are as below.
# Expense Ratio:-Lower the Expense ratio is better for me.
# Tracking Error:-It is nothing but how much is the fund deviated in terms of returns with respect to the Index it is benchmarked. Lower the tracking error means better the fund performance.
# AUM:-Higher the AUM means better the advantage for the fund manager to manage the liquidity issues.
Basics of Investing Mantras
Now before jumping to investing, you must have an idea of what are the basics of investing. I repeat this exercise on yearly basis in my blog post. But still find the same type of questions from the readers. Hence, to give you the clarity, I am writing once again.
As per me, before jumping into investment, one must aware of how well they are preapred for emergencies. Emergencies may be like loss of life, meeting with an accident, hospitalization or sudden income loss or job loss.
Hence, at first cover yourself with proper Life Insurance (Term Life Insurance where the coverage should be at least 15-20 times of your yearly income). Refer my post “Top 5 Best Online Term Insurance Plans in India 2020“. You must have your own health insurance (rather than relying on employer provided health insurance). Refer my post “Top 5 Best Health Insurance Plans in India 2020” and “Top 5 Super Top-up Health Insurance Plans in India 2020“. Buy around 15 to 20 times of your monthly salary corpus as accidental insurance. Then finally create an emergency fund of at least 6-24 months of your monthly commitment.
Once these basics are done, then think of investing. If your basics are not done properly, then whatever the investment building you are creating may tumble at any point of time. Let us move on and understand the basics of investing.
You must have a proper Financial Goal
I noticed that many investors simply invest in mutual funds just because they have some surplus money. The second reason may be someone guided that mutual funds are best in the long run compared to Bank FDs, PPF, RDs, or even LIC endowment products.
If you have clarity like why you are investing, when you need the money and how much you need money at that time, then you will get better clarity in selecting the product. Hence, first, identify your financial goals.
You must know the current cost of that goal. Along with that, you must also know the inflation rate associated with that particular goal. Remember that each financial goal has its own inflation rate. For example, education or marriage cost of your kid’s is different inflation that the inflation rate of household expenses.
By identifying the current cost, time horizon and inflation rate of that particular goal, you can easily find out the future cost of that goal. This future cost of the goal is your target amount.
I have written a separate post on how to set your financial goals. Read the same at “Financial Goals – How to set before jumping into investing?”
Asset Allocation is MUST
Next step is to identify the asset allocation. Whether it is a short-term goal or long-term goal, the proper asset allocation between debt and equity is a must. I personally suggest the below-shared asset allocation strategy. Remember that it may differ from individual to individual. However, the basic idea of asset allocation is to protect your money and smoothly sail to reach the financial goals.
If the goal is below 5 years-Don’t touch equity product. Use the debt products of your choice like FDs, RDs or Debt Funds.
If the goal is 5 years to 10 years-Allocate debt:equity in the ratio of 60:40.
If the goal is more than 10 years-Allocate debt:equity in the ratio of 40:60.
While choosing a debt product, make sure that the maturity period of the product must match your financial goals. For example, PPF is the best debt product. However, it must match your financial goals. If the PPF maturity period is 13 years and your goal is 10 years, then you will fall short of meeting your financial goals.
Return Expectation
Next and the biggest step is the return expectation from each asset class. For equity, you can expect around 10% to 12% return. For debt, you can expect around 6% to 7% returns.
When your expectations are defined, then there is less probability of deviating or taking knee-jerk reactions to the volatility.
Portfolio Return Expectation
Once you understand how much is your return expectation from each asset class, then the next step is to identify the return expectation from the portfolio.
Let us say you defined the asset allocation of debt:equity as 40:60. Return expectation from debt is 6% and equity is 10%, then the overall portfolio return expectation is as below.
(60% x 10%) + (40% x 6%)=8.4%.
How much to invest?
Once the goals are defined with the target amount, asset allocations are done, return expectation from each asset class is defined, then the final step is to identify the amount to invest each month.
There are two ways to do it. One is a constant monthly investment throughout the goal period. Second is increasing some fixed % each year up to the goal period. Decide which suits best to you.
I Hope the above information will give you clarity before jumping into equity mutual fund products.
How many mutual funds are enough?
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 3-4 funds for investing in mutual funds. Whether your investment is Rs.1,000 a month or Rs.1 lakh a month. With a maximum of 3-4 funds, you can easily create a diversified equity portfolio.
Having more funds does not give you enough diversification. Instead, in many cases, it may create your portfolio overlapping and leads to underperformance.
Taxation of Equity Mutual Funds for 2020-21
Remember that Equity Funds and Debt funds are taxed differently. Hence, you must understand the taxation part as well before jumping into investment. I tried to explain the same in the below image.
The rate of taxation is as below for the FY 2020-21 is as below.
Below is the DDT Rates applicable to Mutual Funds after the Budget 2020.
I hope the taxation part is clear to all of you. If you still have doubt, then refer my latest post ” Mutual Fund Taxation FY 2020-21 (AY2021-22)“.
Top 10 Best SIP Mutual Funds to invest in India in 2021
Now let us move on and share with you my Top 10 Best SIP Mutual Funds to invest in India in 2021.
Best SIP Mutual Funds to invest in India in 2021 -Large Cap
Last year I recommended two Large Cap Index Funds. I am retaining the same funds for this year too.
# UTI Nifty Index Fund-Direct-Growth
# HDFC Index Fund Sensex Plan-Direct-Growth
Best SIP Mutual Funds to invest in India in 2021 -Mid Cap
Last year, I recommended two Nifty Next 50 Index Funds over the 2019 active funds. This year also, I am retaining the same funds for my recommendations in Mid Cap Funds. I have given the reasons for my I am not adopted the separate Mid Cap but adopting the Nifty Next 50 as my Mid Cap consideration as below.
Refer to the below image shared by Mirae Asset AMC.
Nifty Next 50 is actually an essence of both large cap and mid cap. Because of this, it acts with the same volatility like mid cap. Hence, I am suggesting Nifty Next 50 as my mid cap fund than particular Mid Cap Active or Index Funds.
I am continuing my last year choices :-
# ICICI Pru Nifty Next 50 Index Fund-Direct-Growth
# UTI Nifty Next 50 Index Fund-Direct-Growth
If you are not fond of this idea, then you can choose active funds also. My recommendation from active funds in mid cap category are:-
# HDFC Mid Cap Opp Fund-Direct-Growth
# Franklin India Prima Fund-Direct-Growth
Personally, I am creating a blend of Nifty 50 and Nifty Next 50 with 50:50 or 70:30 to fill the gap of Large Cap and Mid Cap with these two categories of Index Funds.
However, those who already invested in active mid cap funds can continue and slowly move to Nifty Next 50.
Best SIP Mutual Funds to invest in India in 2021 -Multi-Cap
Last year I recommended Parag Parikh Long Term Equity Fund and Axis Multi-Cap Fund. I am retaining both funds as usual.
# Parag Parikh Long Term Equity Fund-Direct-Growth
# Axis Multi Cap Fund–Direct-Growth
Best SIP Mutual Funds to invest in India in 2021 -Small Cap
I personally not recommending any Small Cap to my clients. However, if you know how to time the market and play with your money, then you can experiment with these two funds which last year also I recommended.
# DSP Small Cap Fund-Direct-Growth
# Frankin India Smaller Companies Fund-Direct-Growth
Best SIP Mutual Funds to invest in India in 2021 – Equity Oriented Balanced Funds or Aggressive Hybrid Fund
Last year I recommended HDFC Hybrid Equity Fund and Franklin India Equity Hybrid Fund. This year too, I am retaining the same funds due to their consistent long-term performance.
# HDFC Hybrid Equity Fund-Direct-Growth
# Franklin India Equity Hybrid Fund-Direct-Growth.
You may have a look at ICICI Pru Equity and Debt Fund or Mirae Asset Hybrid Equity Fund.
Finally, my list of Top 10 Best SIP Mutual Funds to invest in India in 2021 is as below.
Even though in the above post, I have shared ELSS Funds, I don’t think they are the right products to choose from just because of tax benefits. I have written a detailed post on why you have to ignore ELSS Funds “Mutual Funds for Tax Saving – Why you must avoid?“.
What is my style of construction Equity Portfolio?
I have listed all the funds above. However, I suggest constructing the portfolio as below within your equity portfolio.
50% Large Cap Index+30% Nifty Next 50+20% Hybrid Funds
50% Large Cap Index+30% Nifty Next 50+20% Multi Cap Funds
50% Large Cap Index+20% Nifty Next 50+30% Hybrid Funds
50% Large Cap Index+20% Nifty Next 50+30% Multi Cap Funds
Disclosure:-I have investments in HDFC Index Fund Sensex Plan and HDFC Hybrid Fund as equity part of my daughter’s educational goal. Also, I have investments in UTI Nifty Index Fund, ICICI Pru Nifty Next 50 Index Fund, and HDFC Hybrid Fund as equity part of my retirement goal.
Conclusion:-These are my selections but it does not mean they must be universal selections. Hence, if you have a different opinion, then you can adopt so. You also noticed that I have not changed my recommendations from what I recommended last year. I hardly change my stance. In the end, investing is a BORING and LONG TERM journey 🙂 Best of LUCK!!
Refer our latest posts:-
- LIC Saral Jeevan Bima (Plan No.859) – Term Life Insurance
- Top 5 Best Term Insurance Plans in India 2021
- Interest Rates of Post Office Savings Schemes may be reduced – Where to invest?
- Income Tax Return Forms AY 2021-22 (FY 2020-21) – Which forms to use?
- Latest Post Office Interest Rates April – June 2021
- Cab Driver and his 10 Yrs 15% Equity Returns – What we can learn?
How to cancel or stop ECS NACH mandate?
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Vikesh
Hi Basu,
This is a very informative article and really appreciate the breakdown also given by you.
For my retirement goal after 21 years i am investing 9k monthly. out of which 6k (approx 65 percent is in equity)
and remaining 35 percent i.e. 3k is in debt funds which is VPF as suggested in your article.
For my 6k in equity for mutual funds i have divided as below :
HDFC Index Fund Sensex Plan-Direct-Growth – 3000
UTI Nifty Next 50 Index Fund-Direct-Growth – 1800
Franklin India Equity Hybrid Fund-Direct-Growth – 1200
But considering the recent situation of Franklin Mutual fund company. Do you suggest to continue with the same hybrid equity or is it better to sell and invest in some other hybrid fund.
Thanks in advance!
Basavaraj Tonagatti
Dear Vikesh,
Rest looks fine for me. Only concern is Franklin. You can opt for HDFC Hybrid.
Vikesh
Hi Basu,
Thanks for the reply. I had already started Franklin Hybrid fund last month. SO you suggest to withdraw the amount and put it in HDFC hybrid from this month onwards. By the way my monthly SIP date is 15th April.
Basavaraj Tonagatti
Dear Vikesh,
Stop the SIP and move the money from old to new after a year.
Vikesh
Hi Basu,
Thanks for the quick reply. Just another question i had.
Is increasing the SIP by 10 percent every year a good idea?
Basavaraj Tonagatti
Dear Vikesh,
The best idea 🙂
Vikesh
Hi Basu,
Just another thing. ETF’s are getting popular now. Could you please help us with an article to understand how they are different from index funds which has been your recommendation.
Thanks in advance!
Basavaraj Tonagatti
Dear Vikesh,
Surely I will write a separate article on this. Thanks for the idea.
sahaj nagpal
Hello Sir,
This was a thorough and really helpful article. Looking forward to more such knowledge. I have my goals set beyond 10 years. I invest in PPF 50k each year.
My mutual fund allocation is as below
Icici Prudential Long Term Equity Fund – 5000 sip (started in 2017)
Axis long term equity direct plan – 5000 (started last year)
Mirae asset tax saver fund – 5000 (started last year)
I am willing to invest 15-20k more each month as I am married now.
Basavaraj Tonagatti
Dear Sahaj,
Why all ELSS Funds?
sahaj nagpal
Yes sir realising the wrong direction now. If needed I can stop the icici one or just continue with these but add 2-3 more from your suggested options. Please guide from hereon.
Basavaraj Tonagatti
Dear Sahaj,
It happens. Refer above post properly.
Dilip
Hello Basavaraj Tonagatti sir
I am start to invest in mutual funds sip and lump sum from may 2009. Till date my return is 12.5%cagr
My investment goal is 15 year
How should I invest in large cap ,mid cap and multi cap funds.
My current scheams are as below
Sbi focused fund
Mirae asset emerging equity
Invesco india growth opportunities fund
Axis mid cap fund
Axis small cap fund
Portfolio allocation is large cap 47%,mid cap 35%and 18%small cap ,my debt equity allocation is 40:60
Plese suggest me best fund and equity debt allocation for next 15years
Thank you
Basavaraj Tonagatti
Dear Dilip,
Is it not wise to shift to index funds?
Vikram Ahlawat
Hello Basavaraj Tonagatti
I am 39 years old and starting to invest in mutual funds sip from next month.
My investment goal is 10 years.
How should I invest in large cap ,mid cap and multi cap funds.
Plese suggest few funds also.
Basavaraj Tonagatti
Dear Vikram,
Refer the above post properly.
dev
Basu,
When i am calculating Target goal corpus and Monthly investment required for each goal,
1. Should i use fixed Asset allocation like using FV,PMT excel function to find Target corpus and Monthly required amount to be invested for the goal.
2. Should i use Variable asset allocation for each year to find Target corpus and Monthly required amount to be invested for the goalabove.
Kindly advise which 1 to follow.
Basavaraj Tonagatti
Dear Dev,
If you are changing the asset allocation yearly, then obviously the second option suitable for you. Otherwise, the plain 1st option you can use.
dev
Thanks Basu,
All my goals are greater than 10+ years from now and not going to change yearly AA. So i will choose option 1.(fixed AA).
I am using Unified portfolio for all the goals, Should i treat the last goal(Retirement) Asset allocation for the unified portfolio.
Basavaraj Tonagatti
Dear Dev,
Yes, you can.
Mani
Hi Basu,
Your recommendations are very great. I am new to mutual funds but your article helped me to understand things in best possible way. I am planning the same way you suggested in form of SIPs. Apart from that, currently I have excess amount of 3-4 lakh to invest. My all investment are planned for long term(10-15 Yrs).
Can you please suggest me the ways to invest my money in lump sum way?
Also you didn’t mentioned about direct stock investments. Should one consider that as well if he is investing sufficient amount in SIPs in above manner?
Thanks in Advance
Mani
Basavaraj Tonagatti
Dear Mani,
If you are investing as a lump sum, then for the debt part, enter in one go. For the equity part, you may stagger for 6-12 months as per your risk appetite.
Appalanaidu
Hi Sir,
I am following your blogs from an year on-wards but I am starting new investment as a fresher for long term goal of 12-15 years(I am 29 years old ) for children education. I am planning for 60:40 allocation of equity: debt(used PPF and others)
For equity need your suggestion(60:30:20)
1.UTI nifty index & Hdfc nifty sensex(large)
2.Paragh long term equity(flexi/multi) vs ICIC nifty next 50 index
3. HDFC hybrid equity vs mirae asset hybrid equity vs franklin hybrid
Basavaraj Tonagatti
Dear Appalanaidu,
Use UTI Nifty, UTI Nifty Next 50 and Parag Parikh Flexi Cap.
Appalanaidu
Thank you sir..This really helps.
As you have mentioned above nifty next 50 is good over active mid cap fund ?? Any reason behind,in terms of volatility or any other factors
Basavaraj Tonagatti
Dear Appalanaidu,
I have explained the reasons also.
Sandeep
Any reason for choosing Hdfc hybrid equity over Mirae Asset Hybrid Equity Fund? Because after the merge hdfc performance reduced bit? If we starting new which hybrid fund is better? allocation 50(large):20(multi):30(hybrid)
Basavaraj Tonagatti
Dear Sandeep,
I look for consistency over the benchmark. You can use Hybrid or Multi Cap.
priyanka
Hi Sir,
I’ve been following your account for almost 7 years now. And I follow No other blog :). I recently did a reshuffle of my MF portfolio and below are my funds.
HDFC Index Sensex – 3500
UTI Index – 3500
Axis bluechip – 3000
Mirae emerging bluechip – 2500
icici nifty next 50 – 3000
axis small cap – 3500
HDFC hybrid – 3000
1) does my portfolio looks good for long term ( greater than 10 yrs). is there anything i need to add more amount to?
2) I’m an OCI and planning to move my direct debit to NRE account. Can I redeem from MF into NRE account and is it tax free?
Basavaraj Tonagatti
Dear Priyanka,
Thanks for your kind words 🙂 May I know what is the asset allocation you are following between debt and equity?
priyanka
Hi,
Thanks for you reply.
My debt allocation is all here in my country of residence (Australia) and in PPF (india – 30K-50K per year)
Mutual Fund is all the equity allocation
large :small/mid : hybrid ( 50:30:20)
happy to take more risk as i’m planning to invest for more than 15 years.
Basavaraj Tonagatti
Dear Priyanka,
Stop the fresh investment in existing funds. Follow the strategy like one large cap, one mid cap and one flexi cap in the ratio of 50:30:20. Once the existing funds complete one year, then move to the funds. You have to change the funds also by referring the above post.
PRIYANKA
Hi,
All these are new funds and SIP has been scheduled to start from 1st march 2021. is there any fund I need to not go ahead?
Basavaraj Tonagatti
Dear Priyanka,
Better to switch to the above-recommended strategy and funds.
Madhavan
Hi Basu,
I started reading your blog recently. Very useful and simple to understand for novice people like me.
I wanted to invest on PPF for its security but the returns is very low that makes me think twice. (My savings account itself gives 7% interest). i invested in ICICI Pru Guaranteed Wealth Protector Plan with 7 years Pay term and ICICI GILT fund as well in SIP mode. I also decided to invest on IDFC Government Securities Fund in SIP mode as well.
I allocated some fund to invest on Equity but a bit reluctant to proceed. If i have to reallocate to this fund to Debt funds, what would be your advise? increase the SIP on already invested funds or start something new? if new what would you suggest?
Basavaraj Tonagatti
Dear Madhavan,
First decide your financial goals and if possible re-read the above post.
Mano
Hi sir,
Instead of one large cap fund and mid cap fund , Can i choose a single fund which is of Large-Mid cap category?
Basavaraj Tonagatti
Dear Mano,
You can but can you divide on your own % between the single fund?
Sagar
Hello Sir,
Starting this year I decided to Invest in mutual funds.
My investments are as follows –
Motilal Oswal S&P 500 Index Fund Direct-Growth
Axis Blue-chip Fund Direct – Growth
Mirae asset Hybrid equity fund Direct – Growth
Please suggest if I should modify anything here? I am planning to add 2 more funds to the portfolio, I would appreciate if you can recommend anything to balance Risk:Return ration
Thank You for helpful post.
Basavaraj Tonagatti
Dear Sagar,
What is the time horizon of the goals? What is the asset allocation you are following between debt and equity? How you selected these funds?
Sagar
Hello Sir,
I am planning to invest in these funds for a short term (1-3 years for starters)
Asset allocation here is 90% equity and rest in debt
I researched on internet and picked few funds which meet my expectations but I am open to suggestions if you can let me know if I need to add anything. Will appreciate your help.
Basavaraj Tonagatti
Dear Sagar,
If your time horizon is 1-3 years, then better stay away from equity.
Kuldeep
Hello sir
I have been following your blogs for around 4 years now . I started my portfolio with all Active Direct Funds , how ever I am seeing more popularity of index fund since last 1 year since I read your blog for 2020.
How do you suggest one to shift from active Fund to Index Fund .
1) should one stop SIP In active fund and redirect same SIP amount in an INDEX fund
or
2) should one STP active fund to Index fund within Same AMC.
Basavaraj Tonagatti
Dear Kuldeep,
The first approach but subject to lock-in, taxation and exit load.
Sohan
Hi Sir,
I am a long time reader of your blog. Thank you for this write up. Would you please share the list of best debt mutual funds?
Basavaraj Tonagatti
Dear Sohan,
I am writing on debt funds soon. Thanks.
Niranjan
How about NIFTY ETFs considering the expense ratio of index funds?
We can buy/sell ETFs instantly during market hours no need to wait for EOD for NAV calculation.
What do you think? Which is the best index funds or NIFTY ETFs?
Basavaraj Tonagatti
Dear Niranjan,
You can BUY or SELL only when there are SELLERS or BUYERS at your price. Considering the volume traded in the Indian market, I don’t think it is right to enter into ETF. We have to wait.
Shah S
Starting new thread as can’t reply to earlier message.
It’s for long term (more than 10 years)
Equity :debt =65:35
Each has 3 funds with specific objective.
Basavaraj Tonagatti
Dear Shah,
Do you think you have overlapped in Large Cap by investing in Nifty Index and having SBI Bluechip? Regarding mid-cap, I stick to Nifty Next 50 for simplicity. In debt, if your goal is more than 10 years or 15 years, then use PPF and rest in Liquid Fund or Gilt Funds (if you are ready for volatility) rather than experimenting on other categories of debt funds.
Aniket M
Hi Sir, Thanks for your valuable and free guidance in today’s chaotic as well trap based investment blogs environment.
As a diversification of equity share of portfolio, would you suggest any other non-indian market index funds / mutual funds?
For example – 1. EDEILWEISS Greater China offshore fund 2.motilal oswal nasdaq 100 funds of funds or any other US bluechip fund
Basavaraj Tonagatti
Dear Aniket,
Nowadays it turned to be fashion to have exposure to the global market. But look at your portfolio at first and identify what % of the additional impact it will give you (post-tax). Merely they are performing well does not mean I have to jump.
RajarAm
Nice explanation and plan. Thank you sir.,
Basavaraj Tonagatti
Dera Rajaram,
Pleasure 🙂
Virendra Pratap Singh
Are these 10 MFs for the buyer?
Basavaraj Tonagatti
Dear Virendra,
NO….BUT FOR CONSCIOUS INVESTORS.
Amith
Hi Sir,
I am actively following your blogs on mutual funds. I have investments in below mutual funds via SIP from last 4 years. My investment horizon is 10 years.
I have also invested some amount of money in debt area PPF/FD.
Below is investment in funds under SIP of 3,000 per month from last 4 years
Large Cap
* ICICI Prudential Focused Blue Chip Equity Growth (Large Cap) (3 star)
* SBI Blue Chip Fund Direct Growth (Large Cap) (3 star)
Large and Mid Cap
* Mirae Asset Emerging Blue Chip Direct Growth (Large and Mid Cap) (5 star)
Mid Cap
* HDFC Mid Cap Opportunities Fund Direct Growth (Mid Cap) (3 star)
Balanced Fund
* HDFC Hybrid Equity Fund Direct Growth (before HDFC Balanced Fund) (Balanced Fund) (3 star)
Small Cap
* Franklin Temptation Smaller Companies Direct Growth (Small Cap) (2 star)
I see that most of the above Funds are not performing well from past 2 to 3 years and are rated as 2 out of 5 or 3 out of 5 except for Mirae Asset Emerging Blue Chip Fund.
Can you suggest what action to be taken?
Should I stop SIPs of above funds and start investing 3,000 in below new Funds in SIP which is doing consistently good in last 3 years?
Large Cap and Index
* AXIS Blue Chip Fund Direct Growth (Large Cap) (5 star)
* HDFC Index Fund Sensex Plan-Direct-Growth (Large Cap) (5 star)
Multi Cap
* Parag Parikh Long Term Equity Fund (now called as Parag Parikh Flexi Cap Fund) (Multi Cap) (5 star)
Large and Mid Cap
* Mirae Asset Emerging Blue Chip Direct Growth (Large and Mid Cap) (5 star)
Mid Cap
* AXIS Mid Cap Fund Direct Growth (Mid Cap) (5 star)
Small Cap
* AXIS Small Cap Fund Direct Growth (Small Cap) (5 star)
ELSS
* Mirae Asset Tax Saver Fund Direct Growth (ELSS) (5 star)
Basavaraj Tonagatti
Dear Amith,
What is the asset allocation between debt to equity? Ideally, it should be between 40:60. Better you stop fresh investment in the above existing investments of what you did and start towards my recommendations.
Virendra Pratap Singh
Do you recommend topping up of the SIP in MFs recommended by y
ou when the market is down.
You say 4 MFs are enough but still showing 10.
Why recommend ELSS when you despise them?
Basavaraj Tonagatti
Dear Virendra,
I am not a believer in market timing. Hence, I do not suggest such a strategy but a believer in asset allocation as per your time horizon and risk appetite. I think you did not read my blog post fully. I never told that one must have all the above-mentioned 10 funds. Instead, refer to the last part of the post where I mentioned how I construct a portfolio. Regarding ELSS, there are still few investors who feel ELSS is a great tool to save tax. It is for them 🙂
Ramesh Mariyappa
Did you evaluate BOI AXA fund under ELSS for your review
Basavaraj Tonagatti
Dear Ramesh,
Do you need ELSS?
Vinesh
Why didn’t you see kotak mf funds? Kotak smallcap, Equity opportunities?
Basavaraj Tonagatti
Dear Vinesh,
Why you are concentrating on KOTAK AMC?
Shah S
Nice article. I have been following your blogs for quite some time now. Would it be possible for you to comment on my MFs:
IDBI Nifty Index fund (25%)
Axis Blue chip fund (20%)
Motilal Oswal Midcap 30 Fund (20%)
HDFC Short Term fund (5%)
L&T Resurgent India Bond (15%)
IDFC Government Securities Fund – Investment Plan (15%)
Thanks
Basavaraj Tonagatti
Dear Shah,
What is the time horizon of the goal? what is the asset allocation you are following between debt and equity? Why so many funds?
A H Bhalchandra
Good and simple explanation style so that easy to understand for new investor.
Ravi Kumar
Best article I have read related to Mutual fund.
Thankyou.
Basavaraj Tonagatti
Dear Ravi,
Pleasure 🙂
Sanjiv Sawhney
HDFC may be the biggest AMC but for last 3 yesrs performance Can you site even a single fund in Top 3 performance in their respective category , l am not sure why you sre suggesting any scheme from this fund house
Basavaraj Tonagatti
Dear Sanjiv,
Don’t keep your LOVE or HATE towards AMCs or Fund Managers. It is a one-sided affair 🙂
Coming back to why I am recommending, when it comes to their Index Fund, which I recommended, I already cleared in the above post for the reasons to select (In Index Funds AMC or Fund Managers are least important) and when it comes to the recommendation of HDFC Hybrid Equity, I always look for consistency and stability of the fund rather than zoom up or down in returns or AUM (Along with other factors).