Best Mutual Funds to invest in 2013 in India [infographic]

Here is the much awaited article on the best mutual funds to invest in 2013 in India. Investors must be waiting for 2013 to give much better returns than what the last few years have given so the below list of mutual funds will help in selecting the winners.

I have tried to cover most of the categories you would be interested in – namely best equity diversified mutual funds, best debt mutual funds and best tax planning mutual funds.

It is impossible to do coverage on each and every fund listed below so I will only rummage through the categories and some of their best performers. Let me know what you feel about this article and the infographic as well.

If you have any questions on which funds to choose depending on your profile, please use the comments section for asking your question. Note that all data is as of Dec 14th 2012.

Best Mutual Funds to invest in 2013 in India in Equity Diversified category

A fund is said to be equity diversified if it has more than 65% of its corpus in equity. Within the equity diversified category, there are the following four categories that funds are further divided into. The below listing shows the best funds from all the four categories.

Best LargeCap fundsThese are funds with more than 80% of assets in large cap companies in last 3 years. DSPBR Top 100 Equity and Franklin India Bluechip rule the roost here. The other ones giving stellar returns are UTI Mastershare, ICICI Prudential Top 100 and SBI Magnum Equity.

Every investor must have large cap funds in his or her portfolio as they add stability to the portfolio so make sure you pick the ones that fits your needs.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
UTI Mastershare 6.69 19.85 6.31 0.80 19.09
DSP BlackRock Top 100 Equity 8.74 23.01 6.70 3.49 27.73
ICICI Prudential Top 100 Fund 7.10 24.33 7.64 2.40 20.62
SBI Magnum Equity Fund 9.34 24.95 7.84 0.60 15.56
Franklin India Bluechip 8.14 20.19 8.20 3.78 23.45

Best Large & MidCap Funds - Funds with 60%-80% of assets in large cap companies in last 3 years are defined as Large & MidCap. While HDFC Top 200 has been a favorite for a long time now, the others like ICICI Prudential Dynamic Plan and UTI Opportunities have also been good performers.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
HDFC Top 200 10.34 23.88 7.49 5.82 22.64
ICICI Prudential Dynamic Plan 5.60 22.71 8.52 4.86 27.18
Morgan Stanley A.C.E Fund 10.67 24.68 6.43 9.77
Quantum Long-Term Equity Fund 7.48 24.48 10.58 8.21 14.22
Tata Pure Equity Fund 5.43 24.62 6.50 1.89 24.11
UTI Dividend Yield Fund 6.82 16.19 8.07 5.59 17.34
UTI Opportunities Fund 8.81 23.93 10.54 6.42 16.93

Best MultiCap Funds – MultiCap funds are funds with 40%-60% of assets in large cap companies in last 3 years. HDFC Equity and DSBPR Equity have been very popular with investors and so has Reliance Regular Savings Equity.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
BNP Paribas Dividend Yield 8.13 25.63 10.14 4.97 10.16
Reliance Regular Savings Equity 15.66 35.22 6.85 4.94 17.41
DSP BlackRock Equity 9.07 23.46 6.85 3.34 22.00
HDFC Equity Fund 11.25 24.83 8.05 5.64 20.54
ING Dividend Yield Fund 8.91 20.25 9.97 6.82 13.73
Templeton India Equity Income 9.96 28.23 8.77 4.29 13.10

Best Mid & SmallCap Funds - Funds with at least 60% of assets in small and mid cap companies in the last 3 years fall in the Mid & SmallCap category. These funds tend to be very volatile and risky but might end up giving huge returns to investors. HDFC MidCap Opportunties is a well known fund in this category as are the others.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
HDFC Mid-Cap Opportunities 8.79 30.06 14.67 7.72 11.67
Canara Robeco Emerging Equities 12.05 40.52 15.14 1.67 13.67
DSP BlackRock Micro Cap Fund 9.15 30.89 15.46 3.80 10.65
SBI Magnum Emerging Business 14.46 42.95 22.89 3.81 24.10
IDFC Premier Equity Fund 13.38 30.98 14.71 8.95 20.87
Religare Mid N Small Cap 14.42 35.27 17.25  — 12.14

Best Mutual Funds to invest in 2013 in India in Balanced category

Balanced funds are those which in the last one year have average equity exposure over greater than 60%. These are a big favourite among investors as they tend to balance between equity and debt well. HDFC Prudence and HDFC Balanced have been investor’s favourite picks for sometime now.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
HDFC Prudence 9.33 21.86 11.01 7.94 20.04
Birla Sunlife 95 7.59 19.10 8.47 6.47 22.13
Canara Robeco Balance 7.23 23.10 10.46 5.93 11.93
Reliance Regular Savings Balanced 8.24 28.19 9.69 8.68 13.08
HDFC Balanced 6.21 19.97 12.96 9.43 16.20

Best Mutual Funds to invest in 2013 in India in Tax Planning category

Until the Direct Tax Code comes in, Equity Linked Savings Schemes or Tax Planning mutual funds will continue to be a favorite among investors wanting to invest in mutual funds to save tax. In fact, I consider this as one of the best ways for investors to save tax rather than parking their monies in fixed income instruments which will return a meager single digit return after tax. In comparison, tax saving mutual funds have the power to deliver double digit returns. Note that these have a lock in of 3 years.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
ICICI Prudential Tax Plan 9.69 28.72 9.35 4.73 22.83
Religare Tax Plan 8.13 24.71 9.26 4.65 11.64
Canara Robeco Eqt Tax Saver 8.87 25.42 10.73 6.67 15.00
HDFC Taxsaver 8.57 18.46 6.96 3.10 29.77
Franklin India Taxshield 8.28 23.10 10.52 3.97 25.98
Best Mutual Funds to invest in 2013 in India in Debt category

My observation is that this is the category where most of the investors do no pick any mutual funds. As a result, their portfolio becomes very volatile as they are loaded with equity diversified mutual funds. To balance the portfolio, ensure that you pick a debt mutual fund which aligns to your goal based investing strategies. Also  make sure that you understand where do debt mutual funds invest before you pick one up.

Fund Name Performance in %
3 Mths 1 Yr 3 Yrs 5 Yrs Since Launch
SBI Dynamic Bond 2.47 10.26 9.72 5.37 4.00
IDFC SSI Medium Term plan A 2.31 9.90 8.47 9.34 7.35
Templeton India Income Builder 2.95 12.37 8.65 7.84 9.11
Kotak Bond 2.56 12.72 8.30 9.25 9.55
DSPBR MIP 3.12 14.73 7.43 7.74 10.02
Birla Sunlife Monthly Income 3.39 10.22 7.32 7.49 11.18
Reliance MIP 3.98 15.00 8.11 11.21 10.81

I must quickly add that when you choose from the best mutual funds to invest in 2013 in India, it in the best interest of investors to go for the systematic investment planning route of mutual funds while investing in the stock markets. You must avoid the lump sum and one time route unless until it is used for the systematic transfer plan where in you want to park money in liquid mutual funds and then move them to equity diversified funds.

Also ensure that you move out and in mutual funds in a systematic manner and not pull out all your money in one go when you want to sell and invest.

And here is the infographic on the best mutual funds to invest in 2013 in India. Let me know whether you loved it and is yes, kindly share with your friends.

Best Mutual Funds to invest in 2013 in India

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Comments

  1. Sir,

    i want to invest 10000/- pm in mutual fund and i am 26 years old. I am ready to take a small risk. So, Please suggest me the individual mutual fund plans to earn higher returns.

  2. Hi, i am a new investor and want to invest in mutual fund through SIP. I am 26 years old and ready to take small risk. I have selected some funds. Such as

    1. ICICI Pru focused Blue Chip- Rs 1500/- pm
    2. Franklin India Blue Chip- Rs 1500/- pm
    3. HDFC Equity Fund- Rs 1500/- pm
    4. SBI Magnum Emerging Fund- Rs 1500/- pm
    5. Religare Mid N Small Cap- Rs 1500/- pm

    For tax purpose—-
    1. HDFC Taxsaver – Rs 1000/- pm
    2. Franklin India Taxshield – Rs 1000/- pm

    So, please Suggest me accordingly. Waiting for your earlier response.

    • @Rajeev,

      The funds selected by you are good. Your age is your advantage. Do remember to monitor these funds every 6 months.

      • Chetan Ambi says:

        Dear Rajeev,
        Don’t invest blindly. Its not necessary to invest in 7 funds. Experts says 3-4 funds more than enough. So limit your number of funds to 3 or 4. My suggestion for you is to start with HDFC Prudence (Balanced fund) with Rs.1500 first then dive into other funds after few months once your understand equity market. Make sure all your investments are tied to a specific goal. Since your are risk averse select either SBI or Religare from mid cap. I prefer SBI.

        Franklin India Bluechip Fund: 4000
        Quantum Long term equity: 2000
        HDFC Prudence: 2500
        SBI Emerging Business Fund: 1000

        Don’t invest in tax savings fund just for the sake for tax saving. That should be part of your investment. SIP in tax saving fund each of your SIP installment is locked for 3 years separately.

  3. K C Rana says:

    Hi Sir,

    Thanks for providing such informative and beneficial article.
    I want to invest 8k monthly on MF SIPs for long term.
    Till now I have only started SIP of 3k in SBI Emerging business Fund.
    I have also invested 9k in Quantum MF (not have SIP 3k/month ) till now.
    I want to add one of the below large cap fund to my portfolio:
    1.Franklin India Bluechip(my choice till now)
    2.DSP BlackRock Top 100 Equity
    3.SBI Magnum Equity Fund
    4.ICICI Prudential Top 100 Fund
    5.HDFC Top 200

    I want to readjust my investments SIPs as:
    1. Large Cap e.g. Franklin Bluechip – 3500
    2. Mid Cap i.e. Quantum MF – 2500
    3. Small Cap i.e. SBI Emerging Buss – 2000

    Please tell me if all the investments & amount are ok or not.

    Thanks & Regards,
    K C Rana

  4. Dear,

    Can you please explain how Core and Sattelite approach is maintained using Mutual Funds.

    Guiding to any link would also suffice, i can study through.

    Thanks,
    -Sunil.

  5. Hi Sir,

    I want to open SIP in a mid cap i.e. Quantum Long term equity fund for 10-12 years.
    In accordance to volatile market ;Please suggest which option would be better:
    1.Fortnightly SIP or
    2.Monthly SIP

    regards,
    K C Rana

    • How much do you want to invest per month. For eg. if you want to invest 5000 pm, you can go for monthly sip on 5 different dates.

      • I read some articles…many have thoughts that this kind of distribution helps only short term investments…
        Is there any impact of this selection on long term investment too…..?

  6. Not sure what you are trying to say here, Do you have figures to prove?
    If your investment horizon is 10 years then why worry about short term. Stick to your sip’s and monitor your investment regularly.

  7. I am having an sip in HDFC TOP 200 since 36 months my return is -3%.what shall I hold or stop sip. Please suggest me

    • @Vissu,

      HDFC TOP 200 has been an under performer for quite sometime now.
      But if your investment horizon is more than 10 years then stick to it.

  8. Hi Radhey.. How are you doing? Don’t get time nowadays to logon to your site often because of tedious work schedule. But I know whom to turn towards to when I need advice regarding financial planning. :) I’m planning to start investing 2000/- in SIP (ELSS funds..both for Income tax and long term goal purpose). So should I go ahead with Canara Robeco & Franklin India ELSS funds with 1000/- in each, as these are one of the top most well performing funds in ELSS? Let me know asap.
    Thanks!

  9. Suraj Nair says:

    Sir,

    I plan to invest Rs 5000 per month. I wish to have a diversified investment.I do not have sufficient experience and knowledge of investing in Mutual Funds.Could you please guide me with respect to the current scenario in indian share market.? Thanking you in advance.

    Regards.

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