10 Best Mutual Funds to Invest in India 2022

Best mutual funds to invest in India

‘Mutual funds sahi hai!’ this campaign by the Association of Mutual Funds in India (AMFI) can be touted as one of the most successful campaigns in the Indian financial industry. With one of the most underpenetrated retail participation in the world, mutual funds helped the Indian investor to participate in the stock markets safely and conveniently.

However, this success has created another problem. There are now 44 asset management companies in India with 2500 mutual fund schemes! So basically, there are almost as many schemes as there are liquid stocks. On top of that there are various types of mutual funds. We’ve first-hand seen the confusion and problems faced by investors in deciding on the right scheme to invest which is why we’ve come up with below list of carefully curated schemes which are top performers in each category.

10 Best Mutual Funds to Invest in India 2022

Scheme NameTypeTotal Market Value (Cr)YTD1Y2Y3Y5Y
Canara Robeco Bluechip Equity FundLargecap2,885.7 14.0%57.9%23.8%19.0%18.6%
PGIM India Midcap Opportunities FundMidcap1,615.435.7%112.9%44.9%24.6%21.6%
Nippon India Small Cap FundSmallcap14,317.841.5%117.2%34.3%18.7%22.9%
Quant Tax PlanELSS203.641.6%124.2%46.3%30.7%24.8%
Principal Dividend Yield FundDividend211.418.8%61.1%20.7%14.0%18.0%
ICICI Prudential Technology FundSectoral2,792.427.6%137.2%47.5%32.0%25.7%
Invesco India Contra FundContra7,033.117.6%62.4%21.6%15.0%19.0%
IIFL Focused Equity FundFocused1,823.316.7%70.2%27.2%22.2%20.6%
IDFC Sterling Value FundValue3,601.438.5%113.2%23.4%12.4%17.9%
PGIM India Flexi Cap FundFlexicap1,127.624.0%86.3%33.5%22.9%20.7%

1. Canara Robeco Bluechip Equity Fund

LargeCap is the flagship category of any mutual fund house as it involves investing in the largest and the best stocks of the nation. Managed by Mr. Shridatta Bhandwaldar & Mr. Vishal Mishra, the Canara Robeco Bluechip Equity Fund has been the best performer in the category over a 5-year period yielding 18.6% annualized returns. So had you invested Rs.1 lakh in this scheme 5 years ago, it would have become Rs.2.35 lakhs, more than double!

2. PGIM India Midcap Opportunities Fund

MidCaps are the growing yet established companies of the nation and could be the next set of bluechips. Managed by Mr. Aniruddha Naha, the PGIM India Midcap Opportunities fund has compounded investor wealth at 21.6% annually which means your Rs.1 lakh 5 year ago, would today be Rs.2.66 lakhs! More than 2.5 times the initial investment. This fund too has topped its category when it comes to 5-year returns.

3. Nippon India Small Cap Fund

SmallCaps are the trickiest set of stocks to invest in as these are small and extremely fast-growing companies, equivalent to startups. This means either they will become large brands or might even go bankrupt! So, it’s a high-risk high reward investment. Nippon small cap fund has managed to compound wealth in this category at 22.9% per year turning Rs.1 lakh into Rs.2.8 lakhs!

4. Quant Tax Plan

While the name of this fund wasn’t known to a lot of people couple of years back, it has risen to the limelight recently due to its strong performance. ELSS category is used for tax saving purpose and the has a 3-year lock-in period. The Quant Tax Plan was previously known as Escorts fund and was under Anil Ambani’s reliance securities. Now with a new management under Mr. Sandeep Tandon the fund has yielded 24.8% annually, tripling investor wealth in 5 years!

5. Principal Dividend Yield Fund

These funds follow the strategy of investing in stocks that provide high dividend yield such as ITC and PSU stocks. These funds are safe as they provide returns via dividend even if the stocks don’t perform well. Principal Dividend Yield Fund has topped its category providing 18% return annually, turning Rs1 lakh into Rs.2.29 lakhs without taking many risks.

6. ICICI Prudential Technology Fund

Sector focused funds predominantly invest in a particular sector such as Banks or Pharma or Information Technology. So, their returns can vary a lot across different periods depending on which sector is performing well. ICICI Prudential Technology Fund has managed to top the charts by investing in India’s IT companies. The fund provided 25.7% returns annually, highest by any scheme over the past 5 years! It turned Rs.1 lakh of investor wealth into Rs.3.14 lakhs.

7. Invesco India Contra Fund

Contra funds as the name suggests, invest in contrarian stocks and ideas. When the whole market is rushing in one direction, they will choose the path less taken. Which means they provide a hedge if the market suddenly reverses. Invesco Contra Fund has made 19% per year investing in such contra ideas turning Rs.1 lakh into Rs.2.38 lakhs in 5 year while offering protection against sharp reversals.

8. IIFL Focused Equity Fund

As we know diversification reduces risk but it also has the consequence of reducing returns. Mutual funds tend to invest in 30-50 stocks in order to diversify. Hence there is a separate focused category that invests in only a limited number of stocks say 10-25 so that each of these stocks is well researched and backed by strong conviction. IIFL Focused fund has provided highest returns over 5 year period in its category at 20.6%, turning Rs.1 lakh into Rs.2.55 lakhs.

9. IDFC Sterling Value Fund

Value funds follow the age-old philosophy of investing in good quality reasonable priced stocks which has been backed by legendary investors such as Warren Buffet and Peter Lynch. IDFC Sterling fund has been the best performer in the value category, having yielded 17.9% annual return over the past 5 years. So your Rs.1 lakh would have become Rs2.27 lakhs.

10. PGIM India Flexi Cap Fund

Flexicap funds allow the fund manager to invest in large, mid and small cap stocks depending on his or her preference and conviction. So, the fund manager may choose to invest in large caps during risky times and small caps during high growth periods. PGIM Flexi cap fund has provided the highest return in this category over past 5 years at 20.7% annually. So, your Rs.1 lakh would have become Rs.2.56 lakhs.

As seen above all of these funds offer excellent returns and the choice of the fund will depend on your investment philosophy and needs. Once again, we would like to remind you that past performance is no guarantee of future returns so research well and choose your investments wisely but above all, don’t stop investing!

Additional Resources: Covid Economy: The winners, the losers and the likely growers

Attributions: Featured Image created by freepik – www.freepik.com

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