There is a lot of buzz as to which are the best mutual funds to invest this year. Well, best is subjective as per the need and want of every individual. The following post covers 10 best mutual funds to invest in 2017, as per different category and requirement of an individual.
You can read more about choosing the best mutual funds according to your needs in this post.

Best Equity Mutual Fund Schemes

Mutual Fund schemes which allocate more than 65% of their total Asset Under Management to equities, fall under this category. Under this, there are different sub-categories like Large-Cap, Mid-Cap, Small-Cap, and Multi-Cap.

Large Cap Fund

These schemes invest significantly in large-cap and blue chip companies which are market leaders in their industry and sectors. These companies are mostly included in Sensex and Nifty.

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Mid Cap Fund

These schemes invest in tomorrow’s blue chip companies which have the potential to grow. These companies are mostly included in Nifty 500 and Nifty Midcap 100.

Small Cap Fund

These schemes pick very small companies with a market cap. of less than Rs 2000 Crores. Although these schemes are of high risk. Although the returns are also high.

Multi Cap Fund

The last category in equity oriented schemes is Multi-cap which invest in all kind of equities with a significant allocation to large cap stocks.

Best Balanced Funds

Balanced Funds are a kind of mutual fund scheme where funds are invested in equities as well as debt. Generally, the ideal ratio is 65% in equities and 35% in debt for an equity oriented scheme.

Best Equity Linked Saving Scheme (ELSS)

ELSS falls under a particular area of Income Tax called as 80C, wherein you are permitted to contribute up to 1.5 Lakhs for every annum in ELSS or some other particular venture alternatives like Life Insurance Premium, PPF, EPF and so forth.

These schemes offer Additional benefit in which the amount invested in any scheme or any other investment option specific under section 80C (up to 1.5 lakhs) is deducted from your annual income.

Best Debt Funds

Debt funds are schemes which invest in debt instruments. They are of different kinds depending on the kind of debt instruments they invest in and on the basis of time duration.

These schemes invest in short-term (1 year) bonds, T-bills, other similar instruments with a maturity of less than one year. The risk associated with them is very low.

These schemes invest predominantly in debt securities with a maturity of up to 3 years. The composition includes corporate and PSU bonds.

These schemes include Gilt Funds and Income Funds which invest in long-term securities issued by government or corporates. These funds can see greater volatility in returns based on the value of the securities.

These schemes invest in Debt as well as equities. More than 65% is allocated to debt securities, rest all in equities. These schemes have low to moderate risk.

Methodology

  1. There are around 12000 schemes. Firstly, the segregation was on the basis of popular sub-categories.
  2. On the basis of past returns of one, three and five years.
  3. On the basis of highest Alpha generated among peers
  4. After sorting on above parameters, filtering is done by the lowest expenses ratios among the top performing schemes.

Disclaimer: The views expressed here are of that author and may not be same as that of Groww.