Best Equity Mutual Funds

Equity mutual funds buy shares of different companies and invest the investor's money into those shares based on certain criteria.

Equity mutual fund Invest most of the money gather from investors into stock market. The risk level in equity mutual funds are quite high and investors are advice to invest in these funds as per their risk appetite.

An equity mutual fund is one which invests solely in stocks of various companies. Sometimes these funds may invest privately when the investment is made in private companies which are not traded publicly. It is referred to as private equity.

Equity mutual funds provide you the option to redeem your investment at any time, except for ELSS which has a lock in period of three years. The capital gains from equity mutual funds are exempt from tax if the period of investment is longer than one year. However, these funds are highly volatile in nature.

A lot of people follow stock markets and wish to invest in the shares offered by various companies, but they fear that they don’t have enough knowledge or don’t have sufficient time to keep track on and follow the latest buzz about the dynamic market. Equity mutual fund is the perfect solution for them as investing directly in equity market is a risk, not everyone willing to take.

By equity, we mean ownership. So when an individual or an institution buys stocks or shares of a company which is basically a borrower, then the individual acquires ownership in the company based on the number of units of stock or shares bought by him/her. Equity mutual funds give returns based on the market conditions. Like debt funds, they do not provide a fixed return over a period of time, but the return is dependent on the performance of the company on a daily basis. Hence the market value of equity mutual funds changes on a daily basis.

Several advantages of equity mutual funds include:

1.Capital appreciation: Equity provide higher returns and hence it adds to one’s capital appreciation

2.Diversification: Money gets invested into various companies of different sectors which lowers down the losses incurred by investment in a particular sector or a company

3.Professional expertise: Fund managers are highly qualified professionals who monitor the market continuously and take decisions on your behalf to maximize the amount of returns for your portfolio

4.Tax benefits: If equity funds are held for more than a year, then the returns become non-taxable

Hence, we deduce that equity mutual funds are funds which help us to invest our money using stocks and shares and derive higher benefits through diversification as compared to the debt mutual funds.

There are various types of equity mutual funds:

Sector funds: These funds are focused towards a particular sector and their major portion of investments is in that sector. These funds usually have higher risk as their performance is dependent on the performance of that particular sector. For example, Bank funds, Auto sector funds etc.

Equity Linked Savings Scheme: Investments in these funds are subject to a lock-in period of three years but investment in these funds are covered under section 80C of the income tax.

Equity Index schemes: These funds replicate the performance of a benchmark or an index like NIFTY 50, SENSEX etc. These funds have lower expense ratio as they are passively managed that is they are matched to their benchmark and no further changes are made.

Small Cap Funds: a category of mutual fund which looks for opportunities in small cap stocks trading on BSE and NSE. Small cap funds are characterised as high risk high return funds. These funds give the highest level of return within the equity fund category. A tenure of approximately 5 years is considered as a safe investment in these funds.

Mid Cap funds: funds which invest a major component of investor’s money in mid cap stocks. These funds have an objective of seeking capital appreciation through investment in growth stocks. Investments in these funds are usually diversified across various stocks in the mid cap category to reduce the risk and maximise returns.

Large Cap Funds: These funds invest in large cap or blue chip companies of Indian stock markets. These funds are safest in in equity schemes category because their portfolio consist of large corporates in the country.

Top 10 Equity Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
DSP BlackRock Natural Resources & New Energy FundEquityHigh-8.9%5star393
Mirae Asset India Equity FundEquityModerately High2.9%5star9,033
HDFC Small Cap FundEquityModerately High1.5%5star5,320
UTI Transportation and Logistics FundEquityHigh-12.6%5star1,398
SBI Focused Equity FundEquityModerately High2.0%5star3,068
Aditya Birla Sun Life Pure Value FundEquityModerately High-17.1%5star1,456
Reliance Large Cap FundEquityModerately High3.6%5star11,070
Franklin Build India FundEquityHigh-7.0%5star1,091
Invesco India Growth Opportunities FundEquityModerately High2.7%5star892
Tata Equity P/E FundEquityModerately High-3.6%5star4,746
Axis Midcap FundEquityModerately High4.9%5star1,600
SBI Banking & Financial Services FundEquityHigh8.4%5star493
Aditya Birla Sun Life Tax Relief 96EquityModerately High-0.2%5star6,480
ICICI Prudential Bluechip Equity FundEquityModerately High3.0%5star16,539
Aditya Birla Sun Life India GenNext FundEquityHigh2.4%5star759
View All Top 10 Equity Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

DSP BlackRock Natural Resources & New Energy Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Sectoral/Thematic segment and provided 25.6% annualized returns in the last 3 years. In the last 1 year, it gave -8.9% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -8.9% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Rohit Singhania, Jay Kothari

Launch Date2 Jan 2013
Min Investment Amt1,000
Groww Rating5star
AUM393Cr
1Y Returns-8.9%

Mirae Asset India Equity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Multi Cap segment and provided 15.56% annualized returns in the last 3 years. In the last 1 year, it gave 2.87% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.87% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Neelesh Surana, Harshad Borawake

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM9,033Cr
1Y Returns2.9%

HDFC Small Cap Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Small Cap segment and provided 18.67% annualized returns in the last 3 years. In the last 1 year, it gave 1.48% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 1.48% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Chirag Setalvad

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM5,320Cr
1Y Returns1.5%

UTI Transportation and Logistics Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Sectoral/Thematic segment and provided 6.72% annualized returns in the last 3 years. In the last 1 year, it gave -12.63% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -12.63% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Sachin Trivedi

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM1,398Cr
1Y Returns-12.6%

SBI Focused Equity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Focused segment and provided 13.08% annualized returns in the last 3 years. In the last 1 year, it gave 1.97% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 1.97% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Rama Iyer Srinivasan

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM3,068Cr
1Y Returns2.0%

Aditya Birla Sun Life Pure Value Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Value segment and provided 11.94% annualized returns in the last 3 years. In the last 1 year, it gave -17.14% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -17.14% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Mahesh Patil, Milind Bafna

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating5star
AUM1,456Cr
1Y Returns-17.1%

Reliance Large Cap Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Large Cap segment and provided 13.57% annualized returns in the last 3 years. In the last 1 year, it gave 3.64% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 3.64% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Ashwani Kumar, Sailesh Raj Bhan

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM11,070Cr
1Y Returns3.6%

Franklin Build India Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Sectoral/Thematic segment and provided 12.4% annualized returns in the last 3 years. In the last 1 year, it gave -7.02% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -7.02% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Anand Radhakrishnan, Roshi Jain, Srikesh Nair

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM1,091Cr
1Y Returns-7.0%

Invesco India Growth Opportunities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Large & Mid Cap segment and provided 14.53% annualized returns in the last 3 years. In the last 1 year, it gave 2.71% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.71% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Amit Ganatra, Taher Badshah

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM892Cr
1Y Returns2.7%

Tata Equity P/E Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Value segment and provided 16% annualized returns in the last 3 years. In the last 1 year, it gave -3.56% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -3.56% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Sonam Udasi

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM4,746Cr
1Y Returns-3.6%

Axis Midcap Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Mid Cap segment and provided 12.68% annualized returns in the last 3 years. In the last 1 year, it gave 4.92% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.92% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Shreyash Devalkar

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM1,600Cr
1Y Returns4.9%

SBI Banking & Financial Services Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Sectoral/Thematic segment and provided 21.18% annualized returns in the last 3 years. In the last 1 year, it gave 8.42% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 8.42% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Sohini Andani

Launch Date25 Feb 2015
Min Investment Amt5,000
Groww Rating5star
AUM493Cr
1Y Returns8.4%

Aditya Birla Sun Life Tax Relief 96 - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 14.17% annualized returns in the last 3 years. In the last 1 year, it gave -0.16% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -0.16% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Ajay Garg

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating5star
AUM6,480Cr
1Y Returns-0.2%

ICICI Prudential Bluechip Equity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Large Cap segment and provided 13.58% annualized returns in the last 3 years. In the last 1 year, it gave 2.97% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.97% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: S Naren, Rajat Chandak

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating5star
AUM16,539Cr
1Y Returns3.0%

Aditya Birla Sun Life India GenNext Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Sectoral/Thematic segment and provided 15.58% annualized returns in the last 3 years. In the last 1 year, it gave 2.43% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.43% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Anil Shah, Chanchal Khandelwal

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating5star
AUM759Cr
1Y Returns2.4%

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Key features of Equity Mutual Funds

Equity fund give relatively high return on investment compared to other mutual funds. Equity funds are best option for an investor with high risk appetite. Choosing equity fund with appropriate market capitalization is very crucial i.e. among large cap, mid cap, small cap, sectoral cap or multi-cap fund category. No deduction of taxes or TDS on the earning from debt funds. Taxes to be paid only when an investor sell or withdraw fund units and depending on period of the investment. Success of these funds depends on the amount of time invested by fund house in researching and finding the right dark horse stocks. So, selecting right fund house with shrewd fund manager is the key. Timing of buy and sale of equity funds is very critical as stock market is highly dynamic. Tax benefit under Income Tax Act 80c.

Should I invest in Equity Mutual Funds?

Depending on the risk appetite level and expected returns, investor should select the appropriate type of equity funds. Equity funds are one of the financial instruments which can give you high inflation beating returns. When the stocks ‘price rises, it reflects in the value of your investment. Investors are unable to invest in equities due to lack of stock market knowledge, these funds are the best option. They are managed by the professional fund managers. The overall risk of investing in these funds can be minimized by diversifying the portfolio. By investing in these funds, one can accumulate good amount of wealth over a period of time

Who issues Equity Mutual Funds?

Asset management companies (or AMCs or fund houses) create mutual funds. All AMCs will have to be approved by the government body, Securities and Exchange Board of India (SEBI). All mutual funds have to be whetted by SEBI before it is open for the public to invest.

How to invest in Equity Mutual Funds on Groww?

One of the best ways to hedge against the small-cap volatility is to adopt a phased approach, also known as Systematic Investment Plan (SIP) approach. We are sure that you must be aware of SIP and its benefits. Buying in small quantity but buying regularly provides you with faster growth. On Groww.in, all transactions to and from AMC is done via BSE. When you decide to invest in a large cap mutual fund of your choice, you choose that mutual fund on the website and click ‘invest’. Following that, you are redirected to the BSE page where you make the payment. BSE then directs your money to the AMC managing your mutual fund. To be assured at your end, you can visit the individual AMC website after the payment. You would be able to see all your purchased units against your folio number.

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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