Looking for the best mutual funds which will give maximum returns? In this post, I will share 19 Best Mutual Funds to Invest in 2019-20. It is difficult to predict that which mutual funds turn out as a best mutual funds in 2019. However, by doing proper research and following correct selection method one can zero down to best mutual funds for investment in 2019-20.
Let’s do one exercise. Close your eyes and answer one simple question. Given a chance how you will find out best mutual funds for investment? Your answers could be –
- With the help of a financial advisor
- By doing stock research
- Using a search engine
Well, I am sure that most of the investors will answer this question by saying – Using a search engine and by tying a query “Best Mutual Funds”. (The way you did) But, is it the right way probably no. You can use search engine result as a reference. But, you must derive your own method for shortlisting best mutual funds for investment. This method should be based on the risk profile and investment objective. Here is a methodology I use for the selection of mutual fund for investment.
Also Read – 5 Best ELSS Mutual Funds for Investment 2019
How to Select Best Mutual Funds for Investment?
Various points to consider while selecting mutual funds for investment are given below.
- The first step is matching investment objective with fund objective. Every mutual fund has a different investment objective which may or may not match with your goal. You should look at a fund which gives clear fund objective with plan matching with your risk appetite.
- Based on your investment objective and investment strategy you should select a fund category in which you are planning to invest.
- Once the fund category is identified you can start shortlisting mutual funds. You can use the following factors for shortlisting.
- Look at the fund history. A mutual fund should have a long track record for being considered for investment. Check for consistent performance. Avoid New Fund offers.
- You should carefully look at financial ratios such as sharp ratio and alpha ratio. Sharpe Ratio shows the extra return that the fund has generated for every additional unit of risk taken. A fund having a higher Sharpe Ratio is better. Similarly, Alpha tells you how much extra return the fund manager has generated as compared to the benchmark. The higher the alpha, the superior would be the fund.
- You should also look at expense ratio of the fund. Higher the fund ratio means lower the return. You should select the fund with lower expense ratio.
- You can also check fund manager performance. It is important to know the track record of the fund manager. You can get this information from website of mutual fund.
19 Best Mutual Funds to Invest in 2019-20
Equity Large Cap Mutual Funds
1. Axis Blue Chip Funds
2. Canara Robeco Bluechip Equity
3. Mirae Asset India Equity Fund
4. Kotak Standard Multicap Fund
5. Invesco India Midcap Fund
6. L&T Midcap Fund
Equity: Large and Midcap
7. Sundaram Large and Midcap Fund
8. Invesco India Growth Opportunities Fund
Equity: Small Cap
9. TATA Equity PE Fund
10. Invesco India Contra Fund
Hybrid: Aggressive Hybrid
11. Principal Hybrid Equity Fund
12. Mirae Asset Hybrid Equity
13. ICICI Prudential Equity and debt
Hybrid: Conservative Hybrid
14. ICICI Prudential Regular Savings Fund
15. UTI Regular Savings Fund
Debt: Medium to Long Duration
16. ICICI Prudential Bond Fund
17. SBI Magnum Income Fund
Debt: Short Duration
18. HDFC Short Term Debt Fund
19. UTI Short Term Income Fund
Points to consider while investing in Mutual Funds
- You should be clear about your investment objective. Your investment objective should be matched with fund.
- Do not diversify your mutual fund portfolio blindly. Invest in few mutual funds based on your goal. It is not necessary to invest in each category mutual funds to build your portfolio.
- Follow SIP route for investment rather than doing lump sum investment. Invest in mutual funds for the long-term at least 3 years or above. If you are a risk adverse investor you can start building your portfolio by investing in debt or balance funds.
- Never invest in mutual funds based on tips. Carry out proper analysis and research before making an investment. If you are unable to identify mutual fund take advice from expert or CFP.
- Carry out assessment and balance your mutual fund portfolio at regular interval. Consider STP (Systematic Transfer Plan) for switching from one mutual fund to other.
- If your mutual fund portfolio is generating negative returns, do not panic. Don’t redeem or Stop SIPs. Avoid taking any decision based on short-term market movements. Continue your SIPs for the longer period.
- Prefer direct mutual funds scheme. Always invest in Growth based mutual funds over dividend based mutual funds. Stay away from New Fund offers (NFOs).
Please Remember “Mutual Funds Investments are subject to market risks. Please read the offer document carefully before investing”.
Do share your queries and comments.
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