Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic diversification they offer, as well as the advantages of professional management, liquidity and customizability.

The best thing about mutual funds is that they enable you to invest with very small amounts. Many people ask what is the minimum amount to invest in mutual funds? There is no other way you can invest with reasonable diversification with an amount as low as ₹ 100 and even ₹ 50. SIP ( Systematic Investment Plans) of a lot of mutual funds allow min investment with just ₹ 100 and ₹ 500.

Stock market is broadly divided on basis of market capitalization as among large cap, mid cap, and small cap. Market capitalization is calculated by multiplication of the number of outstanding shares company offered with the current market price of one share.

Lets see the most popular mutual funds investing in different market capitalization and sector they are betting in.

Large Cap Fund Category

Large-cap are big, well-established companies of the stock market. These companies are strong, reputable and trustworthy. Large-cap companies generally are top 100 companies in a market. There is no consensus on the capitalization as such.

Funds investing in equities of large-cap are Large Cap Mutual Funds. These are the most popular mutual funds in Large Cap category :

SBI Bluechip Fund

This is a Large Cap Equity Oriented Mutual Fund launched in February 14, 2006. It is a fund with moderately high risk and have given a return of 11.69 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  17.20 %
3 years  9.89 %
5 years 18.57 %

 

Here’s the key features of SBI Bluechip Fund :

  • This fund has been rated as a 4-star fund by Groww and ranked 2 in large cap fund category by Crisil.
  • AUM of close to ₹ 16480 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark BSE S&P 100 since its launch.
  • The top portfolio holdings of the fund include SBI, HDFC Bank Ltd., ITC, Mahindra & Mahindra Ltd., HPCL, Hero MotoCorp Ltd., IndusInd Bank Ltd.,Larsen & Toubro Ltd., CBLO ( CCIL ) etc.
  • The holdings are balanced across various sectors with maximum weightage given to financial services ( 35 % ) followed by Automobile ( 11.6 % ) and Consumer Goods ( 9.9 % ).
  • Minimum SIP = ₹ 500
  • Equity share = 91.3 % , Debt share = 0.7 % and Cash = 7.9 %
  • Large Cap share= 86 % , Mid Cap share = 14 % and Small Cap share = 0 %

This fund is one of the most popular large cap fund available in market. But, returns from this large cap fund is lesser as compared to other popular fund in this category.

So, if you are thinking of investing a lump sum amount or for longer duration, this large cap fund is just the perfect choice for you. Large cap funds may give you good returns on your lump sum investment over the long term. The companies in the large cap funds portfolio are steady compounders and pay dividend on regular basis.

Mirae Asset India Opportunities Fund

This is a Large Cap Equity Oriented Mutual Fund launched in April 04, 2008. It is a fund with moderately high risk and have given a return of 16.88 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  22.13 %
3 years  12.32 %
5 years  21.54 %

Here’s the key features of Mirae Asset India Opportunities Fund  :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 6123 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE 200 Fund since its launch.
  • The top portfolio holdings of the fund include ICICI Bank Ltd., HDFC Bank Ltd., Larsen & Toubro Ltd., Reliance Industries Ltd., SBI, Infosys Ltd., Maruti Suzuki India Ltd., Kotak Mahindra Bank Ltd., Grasim Industries Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to the Financial Services ( 35.4 % ) followed by Automobile ( 10.3 % ) and Consumer Goods ( 9.6 % ).
  • Minimum SIP = ₹ 1000
  • Equity share = 97 % , Debt share = 0.2 % and Cash = 2.8 %
  • Large Cap share= 84.9 % , Mid Cap share = 15.1 % and Small Cap share = 0 %

This fund is one of the best large cap fund available in market. Associate with this fund, if you are thinking of investing a lump sum amount or for longer duration. Large cap funds may give you good returns on your lump sum investment over the long term. The companies in the large cap funds portfolio are steady compounders and pay dividend on regular basis.

Reliance Top 200 Fund

This is a Large Cap Equity Oriented Mutual Fund launched in August 08, 2007. It is a fund with moderately high risk and have given a return of 11.89 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  22.94 %
3 years  10.41 %
5 years 18.77 %

Here’s the key features of Reliance Top 200 Fund :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 4149 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE 200 Fund since its launch.
  • The top portfolio holdings of the fund include Divis Laboratories Ltd., HDFC Bank Ltd., Larsen & Toubro Ltd., IOCL, SBI, Infosys Ltd., ITC Ltd., Tata Steel Ltd., Axis Bank Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to the Financial Services ( 32.3 % ) followed by Energy ( 10.3 %)
  • Minimum SIP = ₹ 100
  • Equity share = 95.3 % , Debt share = 0.2 % and Cash = 4.5 %
  • Large Cap share= 84.6 % , Mid Cap share = 15.4 % and Small Cap share = 0 %

This fund is one of the best large cap fund available in market. So, if you are thinking of investing a lump sum amount or for longer duration, this large cap fund is just the perfect choice for you. Large cap funds may give you good returns on your lump sum investment over the long term. The companies in the large cap funds portfolio are steady compounders and pay dividend on regular basis.

 
Mid Cap Fund Category
Mid cap are compact companies of the equity market, falling somewhere between small and large cap companies and are 100-250 companies in a market after large cap companies. Stocks of mid cap companies are riskier then large cap but not as risky investment instrument as small cap

Funds investing in equities of mid cap are Mid Cap Mutual Funds. These are the most popular mutual funds in Mid Cap category :

Aditya Birla Sun Life Small & Midcap Fund

This is a Mid Cap Equity Oriented Mutual Fund launched in May 31, 2007. It is a fund with high risk and have given a return of 14.24 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  28.93 %
3 years  19.77 %
5 years  28.30 %

 

Here’s the key features of Aditya Birla Sun Life Small & Midcap Fund :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 1866 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Cyient Ltd., CBLO ( CCIL ), Chennai Petroleum Corporation Ltd.etc., DCB Bank Ltd., Gujarat State Petronet Ltd., KEC International Ltd., PNC Infratech Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 20.1 % ) followed by Construction ( 13 % ) and Consumer Goods ( 12.1 % )
  • Minimum SIP = ₹ 1000
  • Equity share = 84.9 % , Debt share = 0 % and Cash = 15.1%
  • Large Cap share= 0 % , Mid Cap share = 70.8 % and Small Cap share = 29.2 %

This is one the best performing mid cap fund available in market for 2018. Mid cap fund are in high demand, because the share price of large caps has increased substantially. That results in the prices of the mid-caps, climbing upwards steadily and made them an attractive investment category with high growth potential.

Associated with this fund if you want to invest in funds with high return possibilities, without the volatility of small caps and index-related returns like those of large cap funds.

L&T Midcap Fund

This is a Mid Cap Equity Oriented Mutual Fund launched in August 09, 2004. It is a fund with high risk and have given a return of 21.75 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  29.3 %
3 years  18.76 %
5 years  29.36 %

 

Here’s the key features of L&T Midcap Fund :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 1323 Cr.
  • Age is nearly 13 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Mphasis Ltd., CBLO ( CCIL ), The Ramco Cements Ltd., Emami Ltd., Mindtree Ltd., Engineers India Ltd., Jindal Steel and Power Ltd., Sundaram Finance Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 18.5 % ) followed by Construction ( 13.5 % ) and Industrial Manufacturing ( 12.5 % )
  • Minimum SIP = ₹ 500
  • Equity share = 86.6 % , Debt share = 0 % and Cash = 13.4 %
  • Large Cap share= 14.8 % , Mid Cap share = 79.2 % and Small Cap share = 6 %

This is one the best performing mid cap fund available in market for 2018. Mid cap fund are in high demand, because the share price of large caps has increased substantially. That results in the prices of the mid-caps, climbing upwards steadily and made them an attractive investment category with high growth potential.

Associated with this fund if you want to invest in funds with high return possibilities, without the volatility of small caps and index-related returns like those of large cap funds.

Mirae Asset Emerging Bluechip Fund

This is a   Mid Cap Equity Oriented Mutual Fund launched in July 9, 2010. It is a fund with moderately high risk and have given a return of 23.40 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  23.72 %
3 years  19.47 %
5 years  30.77 %

 

Here’s the key features of Mirae Asset Emerging Bluechip Fund :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 5364 Cr.
  • Age is nearly 7 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Tata Global Beverages Ltd., ICICI Bank Ltd., Kotak Mahindra Bank Ltd., Raymond Ltd., HDFC Bank Ltd., Federal Bank Ltd., Info Edge Ltd., IndusInd Bank Ltd., Ceat Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 25.9 % ) followed by Consumer Goods ( 12.8 % )
  • Minimum SIP = ₹ 1000
  • Equity share = 98.8 % , Debt share = 0.1 % and Cash = 1.1 %
  • Large Cap share= 36.8 % , Mid Cap share = 57.6 % and Small Cap share = 5.6%.

This is one of the best performing Mid cap fund available in market right now. This is a diversified fund with holding in companies of different market capitalization. Multi-cap funds are risky as compared to large cap funds and depend a lot on the ability of fund manager. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.
Small Cap Fund Category
Small cap are small companies of stock market and are all the companies apart from large and mid cap companies in a market .Stocks of small cap companies highly risky and volatile investment instrument.

Funds investing in equities of mid cap are Small Cap Mutual Funds. These are the most popular mutual funds in Small Cap category :

HDFC Small Cap Fund

This is a Small Cap Equity Oriented Mutual Fund launched in April 03, 2008. It is a fund with high risk and have given a return of 16.60 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  44.19 %
3 years  21.21 %
5 years  25.14 %

Here’s the key features of HDFC Small Cap Fund:

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 2152 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Small cap 100 since its launch.
  • The top portfolio holdings of the fund include Sonata Software Ltd., CBLO ( CCIL ), Redington India Ltd., Aarti Industries Ltd., KEC International Ltd., Dilip Buildcon Ltd., Balkrishna Industries Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Industrial Manufacturing ( 15.1 % ) followed by Automobile ( 14.7 % ) and IT ( 11.5 % )
  • Minimum SIP = ₹ 500
  • Equity share = 85.9 % , Debt share = 0 % and Cash = 14.1%
  • Large Cap share = 1 % , Mid Cap share = 58.5 % and Small Cap share = 40.9%

This funds have exponential growth potential and give high returns on investment and is best suited for investors with high risk appetite or for seasoned investors. Also, this best for investors who have very good ideas of mutual funds and the risks associates with them. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.

L&T Emerging Businesses Fund

This is a Small Cap Equity Oriented Mutual Fund launched in May 12, 2014. It is a fund with high risk and have given a return of 30.98 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  39.73 %
3 years  24.25 %
5 years  NA

Here’s the key features of L&T Emerging Businesses Fund :

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 3587 Cr.
  • Age is nearly 3 years. So its performance can be difficult to judge on longer run. Though its a relatively new fund, it has made its mark with high return on investment.
  • Has consistently outperformed its benchmark S&P BSE Small Cap since its launch.
  • The top portfolio holdings of the fund include Sobha Ltd., CBLO ( CCIL ), Rane Holdings Ltd., Aarti Industries Ltd., Future Supply Chain Solutions Ltd., Dilip Buildcon Ltd., IPCA Laboratories Ltd., Nocil Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Industrial Manufacturing ( 20.1 % ) followed by Financial Services ( 16 % ) and Consumer Goods ( 8.9 % )
  • Minimum SIP = ₹ 500
  • Equity share = 85.9 % , Debt share = 0 % and Cash = 14.1%
  • Large Cap share = 1 % , Mid Cap share = 58.5 % and Small Cap share = 40.9%

This funds have exponential growth potential and give high returns on investment and is best suited for investors with high risk appetite or for seasoned investors. This is a new fund and have performed really well, giving more than expected return in last 3 years.

Also, this best for investors who have very good ideas of mutual funds and the risks associates with them. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.
Multi Cap Fund Category
Multicap funds are good to start investing in equities for beginners. Because of the flexibility of investing all type of companies irrespective of size, the fund manager can generate better risk-adjusted returns.These are the most popular mutual funds in Small Cap category :

Motilal Oswal MOSt Focused Multicap 35 Fund

This is a  Multi Cap Equity Oriented Mutual Fund launched in April 28, 2014. It is a fund with moderately high risk and have given a return of 28.83 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  23.72 %
3 years  19.47 %
5 years  NA

 

Here’s the key features of Motilal Oswal MOSt Focused Multicap 35 Fund : :

  • This fund has been rated as a 5 star fund by Groww and ranked 1 in Diversified equity category by Crisil.
  • AUM of close to ₹ 11411 Cr.
  • Launched just 3 years back, so performance cannot be easy to judge. Though its a relatively new fund, it has made its mark with high return on investment.
  • Has consistently outperformed its benchmark Nifty 500 since its launch.
  • The top portfolio holdings of the fund include United Spirits Ltd.,BPCL, HDFC Bank Ltd., Maruti Suzuki India Ltd., HPCL, Jubilant Life Sciences Ltd., Interglobe Aviation Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services (45.5%) followed by Energy ( 13.6 % ) and Consumer Goods ( 12.7 % )
  • Minimum SIP = ₹ 1000.
  • Equity share = 98.8 % , Debt share = 0 % and Cash = 1.2 %
  • Large Cap share= 76.4 % , Mid Cap share = 23.6 % and Small Cap share = 5.6%.

This is one of the best performing Multi cap fund available in market right now, even though it launched just 3 years back. This is a diversified fund with holding in companies of different market capitalization. Multi-cap funds are risky as compared to large cap funds and depend a lot on the ability of fund manager. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.

DSP BlackRock Opportunities Fund

This is a  Multi Cap Equity Oriented Mutual Fund launched in May 16, 2000. It is a fund with moderately high risk and have given a return of 18.91 % since its launch. Returns per annum over the years from this fund are :

Duration Returns
1 year  18.94 %
3 years  13.38 %
5 years  20.79 %

Here’s the key features of DSP BlackRock Opportunities Fund :

  • DSP BlackRock Opportunities Fund has been rated as a 5 star fund by Groww and ranked 2 in Diversified fund category by Crisil ( for quarter ending December 2017).
  • AUM of close to ₹ 4805 Cr..
  • Past 3 years return is 15.19 % per annum.
  • Has consistently outperformed its benchmark Nifty 500 since its launch.
  • The top portfolio holdings of the fund include SBI, HDFC Bank Ltd., ICICI Bank, CBLO ( CCIL ), Gail (India) Ltd., HPCL, BPCL, Larsen & Turbo Ltd., Tata Steel Ltd., Divis Laboratories Ltd., Vedanta Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 34.3 %) followed by Energy ( 11.1 %) and Construction ( 10 % ).
  • Minimum SIP = ₹ 1000.
  • Equity share = 98.8 % , Debt share = 0 % and Cash = 1.2 %
  • Large Cap share= 76.4 % , Mid Cap share = 23.6 % and Small Cap share = 5.6%.

DSP BlackRock Opportunities Fund is one of the best-performing multi-cap funds in the market today. With returns that are competitive with other multi-cap funds and an experienced fund manager.

This is a diversified fund with holding in companies of different market capitalization. Multi-cap funds are risky as compared to large cap funds and depend a lot on the ability of fund manager. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.
Conclusion
So the sector wise betting done by fund manager for investing in Mutual Funds of various categories are :

Large Cap Mutual Funds : So as seen, the most popular mutual funds in Large Cap Fund category are betting in Financial Services Sector followed by Automobile and Consumer Goods Sectors.

Mid Cap Mutual Funds : So as seen, the most popular mutual funds in Mid Cap Fund category are betting in Financial Services Sector followed by Construction Sector.

Small Cap Mutual Funds : So as seen from above, the most popular mutual funds in Large Cap Fund category are betting in Industrial Manufacturing Sector.

Multi Cap Mutual Funds : So as seen from above, the most popular mutual funds in Large Cap Fund category are betting in Financial Services Sector followed by Energy Sector.

Financial services are doing quit well in last couple of years and is the most preferred sector for investment by mutual fund houses. Most of the fund manager includes stocks of companies from this sector in their portfolio, not depending on the type of fund category.

Latest GDP growth figures, released on Wednesday, come as a bit of a relief for Indian Economy which was under going sluggish due to duel reform of Demonetization and GST. The economy grew at 7.2 per cent in the last three months of 2017, slightly faster than expected.

This data shows Indian economy is on recovery track, which will in term bring in more investments from from both Foreign institute and domestic investors in various sectors.So, there is a great future prospects for Mutual Funds in India.
Things to Remember
Returns have always been the basic benchmarks for investor while going for any investments. These indicate how much the fund has lost or gained during particular investment duration.But don’t just run for returns from investment for investing in Mutual Funds.

There lot of things you should look into before selecting a fund which will match your investment goals. Following the 3 things you should always remember before investing in Mutual Funds :

  • Higher rates : don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.
  • Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.
  • Review your investment from time to time but not too often. Once a few weeks is good enough.

If you a beginner to investment in mutual funds, especially in equity mutual fund, thinking of the small/mid cap mutual funds may not be the best idea for you. These are best for investors who have very good ideas of mutual funds and the risks associates with them.

To ensure that the fund is in good hands, choose a fund house having fund manager with good amount of experience managing small/mid cap funds and associated with these funds for some good numbers of years.

To look at some of the best performing funds from every category of mutual funds, check out Groww 30 best mutual funds to invest in 2018.

Happy Investing!

Disclaimer: the views expressed here are of the author and do not reflect those of Groww.