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How Much More Can You Make With Top Rated Mutual Funds?

27 July 2022

Mutual funds are one of the most popular ways to invest in India. They allow you to buy a portion of a fund's assets, which enables you to invest in stocks or bonds, but they also enable you to diversify your portfolio by spreading your money across many different types of assets.

Mutual funds are typically low-cost investments that can help you achieve greater returns than other types of investments while also enabling you to diversify your portfolio and potentially reduce risk.

Investing in top-rated mutual funds in India can be a wise financial decision. A profitable and low-risk investment, it helps you generate returns on your investment that can easily last a lifetime or even more while ensuring complete safety. These funds are very popular in India and provide investors with diversification and exposure to the Indian market.

The top-rated funds have low expense ratios and a minimum initial investment amount that most people can afford.

Large-cap (sometimes "big cap") refers to a company with a market capitalization value of more than $10 billion. Large-cap is a shortened version of the term "large market capitalization."

Market capitalization is calculated by multiplying the number of a company's shares outstanding by its stock price per share. A company’s stock is generally classified as large-cap, mid-cap, or small-cap.

Mid-cap mutual funds in India offer a combination of high investment return and low risk, making them an ideal choice for investors with moderate financial needs. Mid-cap mutual funds are typically considered to be those that invest in companies with a market capitalization between $2 billion and $10 billion.

This is a flexible definition that can be applied to any type of mutual fund, but it is most commonly used when discussing mid-cap mutual funds in India because they tend to have more diversified portfolios than larger funds.

Small cap is a term used to classify companies with a relatively small market capitalization. A company's market capitalization is the market value of its outstanding shares.

The definition of a small cap can vary among brokerages, but it is generally a company with a market capitalization of between $300 million and $2 billion. 

Large Cap

Top 100 companies in terms of market capitalization

Minimum investment in equity & equity related instruments of large-cap companies – 80% of total assets

Mid Cap

101st- 250th companies in terms of market capitalization

Minimum investment in equity & equity related instruments of mid-cap companies – 65% of total assets

Small Cap

251st company onwards in terms of market capitalization

Minimum investment in equity & equity related instruments of small-cap companies – 65% of total assets

What Is a Mutual Fund Rating?

A mutual fund rating is usually a measure of a fund's historical risk-adjusted performance, over different time frames.  It is thus a composite measure of both return and risk, which gives an idea about its ability to deliver returns for a given level of risk.

The ratings are based on different time periods—trailing 3 years, 5 years, or 10 years—combined to give a single measure of risk-adjusted performance. After the ratings are calculated, stars are assigned based on the percentile in which the mutual fund is positioned. For instance, the top 10% of funds are assigned a 5-star rating, while the bottom 10% of funds are slapped with a 1-star rating.

What Do You Mean By Top-Rated Mutual Funds?

Mutual funds are one of the most popular investment products in India. They are also known as collective investment schemes (CIS) and are used to invest in stocks, bonds, money market instruments, and other securities.

Mutual funds have been around since the late 1940s when they first began to gain popularity in the United States. Today, there are over 3,000 mutual funds registered with the Securities & Exchange Board of India (SEBI).

However, not all mutual funds are created equal. There is a huge difference between high-quality and low-quality mutual funds; therefore, it’s important to do your research before investing your hard-earned money in one of these financial products.

Top-rated mutual funds have received a rating of 3 stars or higher from at least two independent rating agencies such as ICRA or CRISIL; this means that these funds have shown strong performance over a long period of time which makes them reliable investments for investors who want to put their money on safe bets with potential returns that can be used for retirement planning purposes.

Top Rated Mutual Funds in India: Performance Overview

Large Cap Mutual Funds

Mutual Fund

Return (Last 3 years CAGR)

Quant Large and Mid Cap Fund Direct-Growth

+25.62%

Mirae Asset Emerging Bluechip Fund Direct-Growth

+22.56%

Canara Robeco Emerging Equities Fund Direct-Growth

+21.96%

Quant Focused Fund Direct-Growth

+21.51%

Mid-Cap Mutual Funds

Mutual Fund

Return (Last 3 years CAGR)

PGIM India Midcap Opportunities Fund Direct-Growth

+39.24%

Quant Mid Cap Fund Direct-Growth

+35.85%

SBI Magnum Mid Cap Direct Plan-Growth

+28.93%

SBI Magnum Mid Cap Direct Plan-Growth

+28.93%

Small-Cap Mutual Funds

Mutual Fund

Return (Last 3 years CAGR)

Canara Robeco Small Cap Fund Direct-Growth

+38.78%

Bank of India Small Cap Fund Direct-Growth

+38.78%

Kotak Small Cap Fund Direct-Growth

+35.34%

Edelweiss Small Cap Fund Direct-Growth

+34.62%

Conclusion

Top-rated mutual funds have many financial professionals managing them which means they will be able to provide a detailed analysis of how well each investment will do before making any decisions about whether or not it should be added to their portfolio list.

If you are planning to invest in mutual funds in India, then you must know that the top-rated funds are extremely lucrative. The best part is that you don't have to be a financial expert or an expert in the stock market to make a profit.

Mutual funds are not only good for your wealth, but also for your health as well. They help in managing your money and provide you with consistent returns over time.

The best part about investing in mutual funds is that it helps you save more money. You can invest it and get back 10% more than what you invested for every year of your life.

Disclaimer: The views expressed in this post are that of the author and not those of Groww.

To read the RA disclaimer, please click here
Research Analyst - Bavadharini KS

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