Mutual funds are helpful for investors who do not want to invest in individual shares. Many who want to invest in shares but are not able to follow the stock markets judiciously because they don’t have sufficient time to keep track of the markets, opt for mutual funds.
There are mutual funds according to asset classes like equity, debt or gold. Then there are various subcategories for each of these asset classes.
The most significant advantage of investing through a mutual fund is that it gives investors access to professionally-managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult to create with a small amount of capital.
Disclaimer: Here we will list the top five funds which have delivered the best returns in the past five years. This is not a recommendation, and returns should not be the only parameter you consider before you invest. The list is solely for information purposes. The information was last updated in January 14, 2021.
Mutual Funds with Best Returns in Last 5 years
In this article
- Equity Funds
- Debt Funds
- Hybrid Funds
- Gold Funds
- Final Words
Large-cap funds are those equity funds which invest in stocks of large-cap companies. Large-cap companies, also commonly referred to as blue-chip companies are the top 100 listed companies according to their market value. Large-cap companies mostly have a market cap of more than Rs 20,000 crores.
- Axis Bluechip Fund
- Canara Robeco Bluechip Equity Fund
- Mirae Asset Large Cap Fund
- Edelweiss Large Cap Fund
- BNP Paribas Large Cap Fund
Mid-cap funds invest in shares of mid-cap companies. Listed companies ranked between 101 to 250 in terms of market cap fall in this category.
- Axis Midcap Fund
- PGIM India Midcap Opportunities Fund
- Invesco India Midcap Fund
- DSP Midcap Fund
- Kotak Emerging Equity Fund
Small-cap funds invest in stocks of small-cap companies. Listed companies ranked 251 onwards come under the small-cap category.
- Axis Smallcap Fund
- Kotak Smallcap Fund
- SBI Smallcap Fund
- Nippon India Smallcap Fund
- Edelweiss Small Cap Fund
ELSS or equity-linked savings schemes are equity funds that have section 80 C tax benefits.
- Quant Tax Fund
- Canara Robeco Equity Tax Saver Fund
- Mirae Asset Tax Saver Fund
- BOI Axa Tax Advantage Fund
- Axis Long Term Equity Fund
Multi-cap funds invest 75% of their funds in equity. Of that 75%, 25% is invested in small-cap stocks, 25% in mid-cap stocks and 25% in large-cap stocks.
- Axis Multi-Cap Fund
- Quant Active Fund
- Parag Parikh Long Term Equity Fund
- UTI Equity Fund
- PGIM India Diversified Equity Fund
Debt funds are mutual funds that invest in money market instruments or bonds of various companies. Depending on the type of instrument or the company, the fund derives its category and name from it.
A company issuing a bond essentially means it is borrowing money from the investor: it could be an institutional investor like a mutual fund or an individual investor. Investors become lenders in case of debt funds. They invest in bonds of different companies and get some interest during their tenure. At the end of the maturity period, the investor gets their money (principal amount) back.
Debt funds have more than 10 sub-categories.
Here are the top five funds from a few of the categories. You can have a look at the top funds from other sub-categories here.
Liquid funds are those mutual funds that invest in money market instruments having a maturity of up to 91 days. Liquid funds are one of the short term debt fund categories.
- Quant Liquid Direct Plan
- Franklin India Liquid Fund
- IDBI Liquid Fund
- Aditya Birla Sun Life Liquid Fund
- Mahindra Manulife Liquid Fund
Banking and PSU Debt Funds
As the name suggests, such mutual funds lend only to banks and public sector undertakings.
- LIC MF Banking and PSU Debt Fund
- IDFC Banking and PSU Debt Fund
- Kotak Banking and PSU Debt Fund
- Nippon India Banking and PSU Debt Fund
- SBI Banking and PSU Debt Fund
Corporate Bond Fund
Corporate bonds funds are debt funds that lend to different companies with high credit ratings.
- Aditya Birla Sun Life Corporate Bond Fund
- Kotak Corporate Bond Fund
- HDFC Corporate Bond Fund
- ICICI Prudential Corporate Bond Fund
- Axis Corporate Debt Fund
Ultra Short Term Fund
These funds invest in debt and money market instruments of maturity between 3 to 6 months.
- ICICI Prudential Ultra Short Term Fund
- Mahindra Manulife Low Duration Fund
- Aditya Birla Sun Life Savings Fund
- Kotak Savings Fund
- SBI Magnum Ultra Short Duration
Money Market Fund
Money market funds are those funds that invest in money market instruments having maturity upto one year.
- HDFC Money Market Fund
- Aditya Birla Sun Life Money Manager Fund
- Franklin India Savings Fund
- SBI Savings Fund
- L&T Money Market Fund
Arbitrage Hybrid Fund
This scheme follows the arbitrage strategy. The minimum investment in equity and equity-related instruments is 65% of the total assets.
- Nippon India Arbitrage Fund
- Edelweiss Arbitrage Fund
- L&T Arbitrage Opportunities Fund
- Kotak Equity Arbitrage Fund
- UTI Arbitrage Fund
Balanced Advantage Fund
Balanced advantage funds invest in in equity/ debt that is managed dynamically.
- L&T Balanced Advantage Fund
- Edelweiss Balanced Advantage Fund
- ICICI Prudential Balanced Advantage Fund
- Aditya Birla Sun Life Balanced Advantage Fund
- IDFC Dynamic Equity Fund
Aggressive Hybrid Fund
Aggressive hybrid funds invest up to 75% in equities and at least 25% in debt instruments.
- BNP Paribas Substantial Equity Hybrid Fund
- Canara Robeco Equity Hybrid Fund
- Mirae Asset Hybrid Equity Fund
- Sundaram Equity Hybrid Fund
- DSP Equity & Bond Fund
Conservative Hybrid Fund
Conservative Hybrid Funds allocate 10-25% to equities and around 75-90% in debt securities.
- Baroda Conservative Hybrid Fund
- ICICI Prudential Regular Savings Fund
- Canara Robeco Conservative Hybrid Fund
- Kotak Debt Hybrid Fund
- BNP Paribas Conservative Hybrid Fund
Gold funds invest in various forms of gold. It could be physical gold, stocks of gold mining companies.
- ICICI Prudential Regular Gold Savings
- Kotak Gold Fund
- SBI Gold Fund
- Axis Gold Fund
- Nippon India Gold Savings Fund
Mutual funds are a great starting point for investors who want some exposure to the securities or even the commodity market. However, returns should not be the only parameter you consider before you pick a category or a sub-category. Equity, debt and gold, all asset classes individually serve different purposes. Chasing returns may or may not land you into an investment that does not suit your needs.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.