Funds become mutual funds when an asset management company pools investment from various individuals and institutions to purchase securities. For this purpose assets management company have a fund manager who manages all this process and tries to provide the best return to its investors. Under this post, we will try to explain to you the Best Mutual Funds to Invest in 2021.
Best Mutual Funds to Invest in 2021
There are a lot of funds in mutual funds industries, which are categorized into 4 different categories based on the market capitalization which are as follow-
- Large Cap Fund
- Multi-Cap Fund
- Mid Cap Fund
- Small Cap Fund
Out of the above, it is difficult for the investors to make a selection of the Best Mutual fund. In 2020, the coronavirus pandemic crash the market, but after that for the last 1 year, Mutual Funds give a return of 74% (approx.).
According to the experts, the best place to invest in the long term is equity and if the investment is being made in mutual funds, then that should be done in equity mutual funds via SIP. so here is the categories wise list of Best Mutual Funds to invest in 2021.
Best Large Cap Fund in India for SIP 2021
After re-classification made by SEBI, almost all the large-cap fund invested their money in some specified companies due to which the return of these funds almost remains the same. The below list is based on the past performance of these funds.
| Equity Fund | Scheme Size (Cr.) | Min SIP (Rs.) | 3 Yr (%) | 5 Yr (%) |
|---|---|---|---|---|
| Quant Focused Fund DP (G) | 28.21 | 1000 | 18.70 | 17.02 |
| Canara Robeco Bluechip Equity Fund DP (G) | 3308.09 | 1000 | 17.60 | 17.21 |
| Axis Bluechip Fund DP (G) | 28233.36 | 500 | 15.36 | 17.35 |
| BNP Paribas Large CAP Fund DP (G) | 1107.08 | 300 | 15.30 | 13.85 |
| Kotak Bluechip Fund DP (G) | 2804.49 | 100 | 15.09 | 14.54 |
Tip- Considering the performance and fee of a large-cap fund it is better to invest in an index fund because the return of the index fund remains changed in the fixed ratio of Sensex and/or nifty and the fee charged for indexed fund remain nominal as compared to other large fund categories.
Also Read- Know the Best Pharma Mutual Funds to Invest in 2021
Best Multi-Cap Fund in India for SIP 2021
These types of mutual funds primarily invest in stocks selected from all the listed stocks in the Indian Market (BSE/NSE). Investors who are looking to invest money for at least 3-4 years can invest in multi-cap funds.
| Equity Fund | Scheme Size (Cr.) | Min SIP (Rs.) | 3 Yr (%) | 5 Yr (%) |
|---|---|---|---|---|
| Quant Active Fund DP (G) | 736.14 | 1000 | 29.54 | 24.16 |
| Invesco India Multicap Fund DP (G) | 1409.33 | 500 | 17.10 | 16.56 |
| Principal Multi CapGrowth Fund DP (G) | 775.27 | 100 | 14.75 | 16.54 |
| BNP Paribas Multi Cap Fund DP (G) | 559.51 | 300 | 16.76 | 15.67 |
| Baroda Multi Cap Fund DP (G) | 1043.72 | 500 | 16.36 | 14.72 |
Best Mid Cap Fund in India for SIP 2021
These types of mutual funds are suitable for long-term investments. They have higher growth potentials than large-cap companies and are less risky than small-cap companies.
| Equity Fund | Scheme Size (Cr.) | Min SIP (Rs.) | 3 Yr (%) | 5 Yr (%) |
|---|---|---|---|---|
| PGIM India Midcap Opportunities Fund DP (G) | 1952.07 | 1000 | 28.41 | 21.23 |
| Axis Midcap Fund DP (G) | 12812.96 | 500 | 22.67 | 20.80 |
| Quant Mid Cap Fund DP (G) | 110.32 | 1000 | 25.54 | 20.29 |
| Edelweiss Mid Cap DP (G) | 1486.03 | 500 | 21.04 | 19.34 |
| Invesco India Mid Cap Fund DP (G) | 1705.79 | 500 | 20.71 | 19.16 |
Also Read- 10 Best Pharma Company Stocks To Invest in India 2021
Best Small Cap Fund in India for SIP 2021
Small-cap mutual funds invest at least 65% of their total assets in small-cap companies. Small-cap companies are emerging businesses that have an aggressive expansion strategy being more volatile and vulnerable to market movements.
| Equity Fund | Scheme Size (Cr.) | Min SIP (Rs.) | 3 Yr (%) | 5 Yr (%) |
|---|---|---|---|---|
| Nippon India Small Cap Fund DP (G) | 15353.12 | 100 | 23.38 | 23.53 |
| SBI Small Cap Fund DP (G) | 9091.47 | 500 | 23.00 | 23.33 |
| Quant Small Cap Fund DP (G) | 700.52 | 1000 | 36.30 | 22.74 |
| Axis Small Cap Fund DP (G) | 6008.74 | 500 | 28.92 | 22.31 |
| Kotak Small Cap Fund DP (G) | 4765.50 | 1000 | 27.74 | 21.51 |
Also Read- 10 Best 5G Stocks to Buy In India which may become Multibaggers in this decade
Top 10 Mutual Funds for SIP in India 2021
Considering the various benefits of the Systematic Investment Plan (SIP), investing in equity mutual funds via SIP is better. On the basis of the last 3-year returns of equity mutual funds, here are the top 10 mutual funds for SIP to invest in 2021-
| Best Mutual Funds to Invest in 2021 | Scheme Size (Cr.) | Min SIP (Rs.) | 3 Yr (%) | 5 Yr (%) |
|---|---|---|---|---|
| Quant Small Cap Fund DP (G) | 700.52 | 1000 | 36.30 | 22.74 |
| Quant Active Fund DP (G) | 736.14 | 1000 | 29.54 | 24.16 |
| Axis Small Cap Fund DP (G) | 6008.74 | 500 | 28.92 | 22.31 |
| PGIM India Midcap Opp Fund DP (G) | 1952.07 | 1000 | 28.41 | 21.23 |
| Kotak Small Cap Fund DP (G) | 4765.50 | 1000 | 27.74 | 21.51 |
| Quant Mid Cap Fund DP (G) | 110.32 | 1000 | 25.54 | 20.29 |
| ICICI Pru Small Cap Fund DP (G) | 2664.18 | 100 | 24.61 | 18.72 |
| Nippon India Small Cap Fund DP (G) | 15353.12 | 100 | 23.38 | 23.53 |
| Mirae Assets Emerging Bluechip Fund DP (G) | 18675.71 | 1000 | 23.24 | 21.79 |
| SBI Small Cap Fund DP (G) | 9091.47 | 500 | 23.00 | 23.33 |
How to Invest in Mutual Funds?
After getting knowledge about “Best Mutual Funds to Invest in 2021”, it is necessary to know how to invest in mutual funds.
To invest in mutual funds, you can choose the offline or online mode as well. Making an offline investment in mutual funds makes a lot of paperwork. To avoid paperwork, it is better to invest online for which you can choose Upstox.
Upstox is a platform, where you can invest online through its web or app. There is no paperwork and all the procedure is online with e-KYC facilities.
Here is the link to Upstox, through which you can invest online in more than 2000 mutual funds. You can choose the best mutual fund of your choice and study all the detailed analyses.
Why to Invest in Mutual Funds- Advantage of Mutual Funds
Benefits of Mutual Funds- Here is why investing in mutual funds is a good idea-
- Liquidity
- Diversification
- Expert Management
- Fits All Financial Goals
- Cost efficiency
- Tax-efficient returns
Liquidity- Except for the cases when you decided to go for close-ended mutual funds, it is easy and hassle-free to buy and exit mutual fund scheme, because close-ended scheme issue a fixed number of units, which means that new investors can not enter, nor can the existing investor’s exit until the term of the scheme ended.
Diversification- Mutual funds do come with their set of risks since they are impacted by the performance of the market. They invest in assets classes- be it equity, debt and others and within assets classes in different sectors and company sizes.
Expert Management- This is another main reason to invest in mutual funds, where investors do not require to do any research, here is the fund manager who takes care of it and makes decisions on what needs to be done with your investments.
Fits all financial goals- In today, mutual funds industries have many schemes that fit the investors’ financial goals, such as for children’s marriage education, retirement or buying a house, etc.
Cost efficiency- An investor also can go for a mutual fund with low expense ratios. You can check the expenses ratio of a range of mutual funds and then decide on the one that fulfills your financial goals.
Tax-efficient returns- Mutual funds returns are more tax-efficient compared to traditional investment avenues like FDs. In equity mutual funds you pay 15% tax on return if you invest for less than one year. For long-term gain, you need to pay tax only if your return exceeds Rs. 1 Lakh in a financial year. Even then the tax rate is 10% and you pay it on the amount over Rs. 1 Lakh.
Frequently Asked Questions- FAQs
-
Which are the best mutual funds to invest in 2021?
List of Best Mutual Funds to invest in 2021-
Quant Small Cap Fund DP (G)
Quant Active Fund DP (G)
Axis Small Cap Fund DP (G)
PGIM India Midcap Opp Fund DP (G)
Kotak Small Cap Fund DP (G)
Quant Mid Cap Fund DP (G)
ICICI Pru Small Cap Fund DP (G)
Nippon India Small Cap Fund DP (G)
Mirae Assets Emerging Bluechip Fund DP (G)
SBI Small Cap Fund DP (G) -
What are the top 5 mutual funds?
List of Best Mutual Funds to invest in 2021-
Quant Small Cap Fund DP (G)
Quant Active Fund DP (G)
Axis Small Cap Fund DP (G)
PGIM India Midcap Opp Fund DP (G)
Kotak Small Cap Fund DP (G) -
Where should I invest my Money in 2021?
Mutual Funds
Unit Linked Insurance Plan (ULIP)
Stock Market
Public Provident Fund (PPF)
Fixed Deposits
National Pension Scheme (NPS)
Senior Citizen Saving Scheme
Real Estate Investment etc. -
Which mutual funds are best to invest now?
List of Best Mutual Funds to invest in 2021-
Quant Small Cap Fund DP (G)
Quant Active Fund DP (G)
Axis Small Cap Fund DP (G)
PGIM India Midcap Opp Fund DP (G)
Kotak Small Cap Fund DP (G)
Quant Mid Cap Fund DP (G)
ICICI Pru Small Cap Fund DP (G)
Nippon India Small Cap Fund DP (G)
Mirae Assets Emerging Bluechip Fund DP (G)
SBI Small Cap Fund DP (G) -
What is the tax rate for mutual funds income?
As per the Budget 2020 amendments, the dividends offered by all mutual fund schemes are taxed classically. They are added to the overall income of investors and taxed at their respective income tax slab rates. Previously, dividends were made tax-free in the hands of investors as the fund houses paid dividend distributions tax (DDT).
You realize short-term capital gains on selling your fund units within a holding period of one year. These gains are taxed at a flat rate of 15%, irrespective of your income tax slab. Long-term capital gains are realized by redeeming your units after a holding period of one year. These gains of up to Rs 1 lakh a year are tax-free. Anything above this limit attracts tax at the rate of 10%, and there is no benefit of indexation provided.
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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken based on the above article.
Mutual Funds Investments are subject to market risk, read all scheme-related documents carefully.
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