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Best Equity Mutual Funds

Equity mutual funds aim at generating returns through investments in stocks of publicly listed companies across market capitalizations. The primary motive of Equity funds is to generate aggressive returns over a long time horizon.

Equity Funds mainly feature two options for investors – dividend and growth. These mutual funds invest at least 65% of the capital in equities and equity securities, while the remaining 35% is invested in money-market instruments or debt instruments. The returns of the investments in equity mutual funds range from 10% to 12%, which can sometimes also beat market growth and inflation.

Currently, there are some of the best equity mutual funds scaling the mutual fund domain, and they are provided below.

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List of Equity Mutual Funds in India

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Quant Infrastructure Fund
EquityVery High18.9%5₹993
Quant Mid Cap Fund
EquityVery High29.2%5₹3,268
Kotak Infrastructure and Economic Reform Fund
EquityVery High28.3%5₹1,139
Motilal Oswal Midcap Fund
EquityVery High30.9%5₹6,060
SBI Contra Fund
EquityVery High27.1%5₹16,667
Quant Tax Plan Fund
EquityVery High16.8%5₹4,957
Axis Small Cap Fund
EquityVery High29.3%5₹16,369
SBI Consumption Opportunities Fund
EquityVery High23.3%5₹1,648
SBI Magnum Mid Cap Fund
EquityVery High26.7%5₹13,202
ICICI Prudential Value Discovery Fund
EquityVery High22.3%5₹32,494
Bandhan Tax Advantage (ELSS) Fund
EquityVery High16.8%5₹5,160
Motilal Oswal Large and Midcap Fund
EquityModerately High31.0%5₹2,390
Bandhan ELSS Tax Saver Fund
EquityVery High20.0%5₹5,040
JM Flexicap Fund
EquityVery High30.0%5₹718
Quant Focused Fund
EquityVery High17.9%5₹417
View All

Who Should Invest in Equity Mutual Funds?

A fund that is made up of a minimum of 65% equity and equity-oriented securities is called an equity mutual fund, and these funds will suit:

a) Investors with Moderate to High-Risk Appetite

Equity mutual funds invest are deemed to hold high to moderate risks. Even the top equity mutual funds can come with price fluctuations and frequent ups and downs in the short term. Therefore, if you are an investor who holds a moderate to high-risk appetite, they are the best-suited funds for you.

b) Investors Who Want to Start Small in Equity Investments

Quite a lot of investors want to invest in the equity market but can't because they do not have enough capital. However, through equity mutual funds, an investor can start small - even with an amount as low as Rs. 100.

c) Investors Who Want to Save Taxes and Enhance Overall Wealth

Equity funds, especially ELSS Funds are useful for investors who want to have the best of tax-saving and long-term wealth creation together. They give investors the option to save with taxes through the tax-saving benefits of Section 80C of the Income Tax Act. An investor can reduce his/her taxable income by Rs. 1.5 lakhs with investments in equity mutual funds. Simultaneously, they also earn good returns from investments. 

d) Long-Term Investors

As mentioned above, equity mutual funds can be volatile in the short term. Although they can provide handsome returns in the long run, they are most likely only suitable for investors who are willing to invest for five years and more. 

e) Investors Who are Inexperienced for Equity Stock Investments

Many beginner investors want to invest in the stock market but cannot do so because they do not have the devoted time to track the market or enough experience to invest confidently.

Equity mutual funds provide these investors an opportunity to start investing in equity-linked funds. The investor need not worry about the market or performance with equity mutual funds as the fund manager will take care of everything and work on providing profits to the investors.

Factors to Consider While Investing in Equity Mutual Funds

While finding the best equity mutual funds to invest in 2023, an investor will have to take a look at the following factors in detail:

  1. Track Record of the Fund

Best performing equity mutual funds usually have an excellent track record of giving out the best returns over the last couple of years. The performance of these funds would have outperformed the benchmark and competitor funds. 

In order to find the best equity fund, you will have to examine the fund's performance over the last few business cycles. 

  1. Objective of the Fund

Investments in any kind of equity need to be made only after assessing the final goals of the fund. Funds that perform well in the long run always have a clear objective because it helps them diversify the investment and offer better returns.

So, once the objective has been completely assessed, you will be able to map out whether or not the fund will give you enough yields. 

  1. Fund's History

The right equity fund is found by its history. The funds with an extended history are considered to be a good choice. This is because you can know if a fund was performing well over a time frame, even in a bad market. This kind of data would not be available for new funds. 

So, before choosing a fund, look into its performance history and analyze the ups and downs in the last few years. It can help you estimate its futuristic performance.

  1. Expense Ratio 

The expense ratio is the fee charged by the fund house to manage your investments. So, the lower these fees, the fewer expenses you will incur over your investments. Therefore, while searching for the best equity mutual funds in 2023, you will have to look out for a fund house that is not only secure but also offers you reasonable fees and charges over your investments.

  1. Fund Manager's Expertise

An equity fund does not just perform well out of market directions, but it also has the fund manager’s expertise at hand. A well-performing fund, at most times, is known to have a fund manager with a great track record. This is because he is known to provide profitable returns over time.

A fund manager is a vital part of any equity fund investment. They can handle the investor's money, and it is his expertise that allows the fund to succeed. 

Checking up on the history, performance, and expertise of the fund manager gives you the assurance of investing under the administration of safe hands.

Risks Involved While Investing in Equity Mutual Funds

As already stated, investments in equity mutual funds involve risks in the short term; the risks can be of the following kinds:

a) Market Risk: A market risk results in losses for any investor because of poor performance of the market. These can be inflation, deflation, political unrest, interest fluctuations, and more.

b) Interest Rate Risk: Interest rate changes depending on the credit available to lenders and the demand from borrowers. An increase in the interest rate during the investment period can result in a reduction in the price of the security, which means it is inversely related to each other. 

c) Liquidity Risk: Liquidity risk is the difficulty of redeeming an investment without facing a loss in the value of the fund. This occurs for several reasons, like interest rates increase, changes in the value of currency, and more. Therefore, selling the funds and arranging money can sometimes be hard.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

FAQ

Q1. How long do I need to remain invested in equity mutual funds?

The tenure you need to stay invested in entirely depends on the objective of your investment. Typically, equity funds are open-ended, which provides you with the opportunity to sell the fund when you want to. However, it is advised to stay invested if you can see steady returns in the future.

Q2. What are the expected returns of equity mutual funds?

Mutual funds are known to provide higher returns than bank FDs (when it is the right fund). Therefore, you can expect returns of more than 13%.

Q3. Are equity mutual funds long-term investments?

You can stay invested in an equity mutual fund for long or short term, based on your financial goals. But, it is advised to stay invested for the long term to see positive returns. 

Q4. Which equity fund is the best to invest in?

There are different kinds of equity mutual funds, but the suitability of an equity mutual fund will be based on your financial and investment goals, risk appetite, and several other factors. 

Q5. Will equity mutual funds give me dividends?

In certain cases, an equity mutual fund can occasionally give you dividends and bonuses from the underlying companies it was invested in. 

Let's have a closer look

Now let us jump and check about these top 15 mutual fund schemes.

Quant Infrastructure Fund Direct Growth

Fund Performance: The Quant Infrastructure Fund has given 41% annualized returns in the past three years and 29.97% in the last 5 years. The Quant Infrastructure Fund belongs to the Equity category of Quant Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Quant Infrastructure Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹993Cr
1Y Returns18.9%

Quant Mid Cap Fund Direct Growth

Fund Performance: The Quant Mid Cap Fund has given 37.96% annualized returns in the past three years and 27.83% in the last 5 years. The Quant Mid Cap Fund belongs to the Equity category of Quant Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Quant Mid Cap Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹3,268Cr
1Y Returns29.2%

Kotak Infrastructure and Economic Reform Fund Direct Growth

Fund Performance: The Kotak Infrastructure and Economic Reform Fund has given 36.88% annualized returns in the past three years and 22.47% in the last 5 years. The Kotak Infrastructure and Economic Reform Fund belongs to the Equity category of Kotak Mahindra Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Kotak Infrastructure and Economic Reform Fund via lump sum is ₹100 and via SIP is ₹100.

Min Investment Amt₹100
AUM₹1,139Cr
1Y Returns28.3%

Motilal Oswal Midcap Fund Direct Growth

Fund Performance: The Motilal Oswal Midcap Fund has given 35.52% annualized returns in the past three years and 25% in the last 5 years. The Motilal Oswal Midcap Fund belongs to the Equity category of Motilal Oswal Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Motilal Oswal Midcap Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹6,060Cr
1Y Returns30.9%

SBI Contra Direct Plan Growth

Fund Performance: The SBI Contra Fund has given 35.46% annualized returns in the past three years and 24.19% in the last 5 years. The SBI Contra Fund belongs to the Equity category of SBI Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in SBI Contra Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹16,667Cr
1Y Returns27.1%

Quant Tax Plan Direct Growth

Fund Performance: The Quant Tax Plan Fund has given 34.83% annualized returns in the past three years and 28.44% in the last 5 years. The Quant Tax Plan Fund belongs to the Equity category of Quant Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Quant Tax Plan Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹4,957Cr
1Y Returns16.8%

Axis Small Cap Fund Direct Growth

Fund Performance: The Axis Small Cap Fund has given 32.19% annualized returns in the past three years and 27.89% in the last 5 years. The Axis Small Cap Fund belongs to the Equity category of Axis Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Axis Small Cap Fund via lump sum is ₹100 and via SIP is ₹100.

Min Investment Amt₹100
AUM₹16,369Cr
1Y Returns29.3%

SBI Consumption Opportunities Fund Direct Growth

Fund Performance: The SBI Consumption Opportunities Fund has given 31.12% annualized returns in the past three years and 19.14% in the last 5 years. The SBI Consumption Opportunities Fund belongs to the Equity category of SBI Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in SBI Consumption Opportunities Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹1,648Cr
1Y Returns23.3%

SBI Magnum Mid Cap Direct Plan Growth

Fund Performance: The SBI Magnum Mid Cap Fund has given 30.27% annualized returns in the past three years and 23% in the last 5 years. The SBI Magnum Mid Cap Fund belongs to the Equity category of SBI Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in SBI Magnum Mid Cap Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹13,202Cr
1Y Returns26.7%

ICICI Prudential Value Discovery Direct Growth

Fund Performance: The ICICI Prudential Value Discovery Fund has given 29.05% annualized returns in the past three years and 20.27% in the last 5 years. The ICICI Prudential Value Discovery Fund belongs to the Equity category of ICICI Prudential Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Value Discovery Fund via lump sum is ₹1,000 and via SIP is ₹100.

Min Investment Amt₹1,000
AUM₹32,494Cr
1Y Returns22.3%

Bandhan Tax Advantage (ELSS) Direct Plan Growth

Fund Performance: The Bandhan Tax Advantage (ELSS) Fund has given 28.88% annualized returns in the past three years and 18.62% in the last 5 years. The Bandhan Tax Advantage (ELSS) Fund belongs to the Equity category of IDFC Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Bandhan Tax Advantage (ELSS) Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹5,160Cr
1Y Returns16.8%

Motilal Oswal Large and Midcap Fund Direct Growth

Fund Performance: The Motilal Oswal Large and Midcap Fund belongs to the Equity category of Motilal Oswal Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Motilal Oswal Large and Midcap Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹2,390Cr
1Y Returns31.0%

Bandhan ELSS Tax Saver Fund Direct Plan Growth

Fund Performance: The Bandhan ELSS Tax Saver Fund has given 27.64% annualized returns in the past three years and 19.56% in the last 5 years. The Bandhan ELSS Tax Saver Fund belongs to the Equity category of IDFC Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Bandhan ELSS Tax Saver Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹5,040Cr
1Y Returns20.0%

JM Flexicap Fund Direct Plan Growth

Fund Performance: The JM Flexicap Fund has given 27.3% annualized returns in the past three years and 20.72% in the last 5 years. The JM Flexicap Fund belongs to the Equity category of JM Financial Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in JM Flexicap Fund via lump sum is ₹1,000 and via SIP is ₹100.

Min Investment Amt₹1,000
AUM₹718Cr
1Y Returns30.0%

Quant Focused Fund Direct Growth

Fund Performance: The Quant Focused Fund has given 26.19% annualized returns in the past three years and 19.27% in the last 5 years. The Quant Focused Fund belongs to the Equity category of Quant Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Quant Focused Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹417Cr
1Y Returns17.9%

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