Equity Mutual Fund investments offer good potential for bigger returns over the long term. It is a compelling option for individuals seeking bigger returns giving it period to grow. These funds invest in the shares of the company allowing investors to benefit from the share’s performance in the sharemarket. While there are very volatile in the shorter term, however, with time, Equity MF can spiral to become a big corpus through the power of compounding. Investments must be made in equity after a well-thought plan that includes your financial goals. People can make their equity investment under a broad spectrum of funds which are classified based on their size and sectors
To select the best equity mutual fund, many investors compare the five year returns of equity mutual funds. The comparison is usually based on the CAGR which provides a clear view of the fund’s performance by considering their average return over 5 years. Additionally, evaluating risk-adjusted returns delivers like sharpe ratio ensures that you are choosing a fund that delivers returns efficiently to the risk taken. One also needs to take into account expense ratio, as higher expense ratio may eat up significant returns from your fund’s performance. The idea behind all this research is to analyze how well mutual funds have navigated different market conditions.
To help you navigate the sea of equity mutual funds online available in the market, we’ve curated a list of the best equity mutual funds across different spectrum. These funds are selected based on factors such as their performance track record, investment strategy, and risk profile.
Thematic Funds- Sectoral Exposure
Thematic funds focus on specific industries, or stocks of a particular sector like infra, service industries, or MNCs, offering a concentrated exposure. Here are some top-performing thematic funds:
| Fund Name | NAV (₹) | Fund Size (₹ Cr) | Expense Ratio (%) | 5-Year Return (%) |
| Quant Infrastructure Fund | 41.3623 | 3936.99 | 1.88 | 36.99 |
| Invesco India Infrastructure Fund | 68.52 | 1666.48 | 2.07 | 32.69 |
| ICICI Prudential Pharma Healthcare & Diagnostics Fund | 39.30 | 4987.49 | 1.92 | 32.80 |
| ICICI Prudential Infrastructure Fund | 198.13 | 6423.88 | 1.90 | 32.82 |
| Bandhan Infrastructure Fund | 55.136 | 1905.92 | 2.07 | 32.03 |
Flexi Cap Funds: A Balanced Approach
Flexi cap funds have the flexibility to invest across large, mid, and small-cap stocks with no specific proportion, providing a diversified portfolio. Some of the best flexi cap funds include:
| Fund Name | NAV (₹) | Fund Size (₹ Cr) | Expense Ratio (%) | 5-Year Return (%) |
| Parag Parikh Flexi Cap Fund | 80.9386 | 82441.07 | 1.33 | 25.89 |
| Quant Flexi Cap Fund | 106.5176 | 7912.16 | 1.75 | 35.24 |
| Franklin India Flexi Cap Fund | 1665.4626 | 18251.58 | 1.71 | 24.16 |
| JM Flexicap Fund | 107.5904 | 4531.48 | 1.82 | 26.14 |
| HDFC Flexi Cap Fund | 1916.601 | 66225.06 | 1.43 | 24.87 |
Mid Cap Funds: Tapping the growth potential
Mid Cap funds is a pooled investment with focus on companies with market capitalization in the mid-range of listed stocks. The underlying companies belong to the mid-cap category with higher chance of growth than large cap and lower risk than small cap companies.
| Fund Name | NAV (₹) | Fund Size (₹ Cr) | Expense Ratio (%) | 5-Year Return (%) |
| Motilal Oswal Midcap Fund | 109.1487 | 18604.02 | 1.65 | 34.24 |
| Nippon India Growth Fund | 4246.51 | 35208.97 | 1.57 | 31.90 |
| Edelweiss Mid Cap Fund | 102.331 | 7755.06 | 1.72 | 31.96 |
| PGIM India Midcap Opportunities Fund | 65.96 | 11700.09 | 1.69 | 31.36 |
| Quant Mid Cap Fund | 238.7359 | 9500.7 | 1.73 | 35.94 |
Large Cap Funds: A Stable Investment
Large-cap funds are the type of equity funds that typically invest in well-established companies or in other words top 100 listed companies with substantial market capitalizations. Here are some of the best large-cap funds:
| Fund Name | NAV (₹) | Fund Size (₹ Cr) | Expense Ratio (%) | 5-Year Return (%) |
| ICICI Prudential Bluechip Fund | 109.29 | 66206.57 | 1.44 | 20.93 |
| Invesco India Largecap Fund | 70.41 | 1289.72 | 2.09 | 20.03 |
| Nippon India Large Cap Fund | 89.8298 | 34432.09 | 1.57 | 22.03 |
| Canara Robeco Bluechip Equity Fund | 62.72 | 15311.79 | 1.65 | 19.54 |
| Baroda BNP Paribas Large Cap Fund | 229.144 | 2439.97 | 2.00 | 19.42 |
Small Cap Funds: High-Risk, High-Reward
Small Cap Funds invest in relatively smaller companies that typically has a market capitalization of less than Rs. 5000 crores, which can offer higher growth potential but also carry increased risk. Some of the top-performing small-cap funds include:
| Fund Name | NAV (₹) | Fund Size (₹ Cr) | Expense Ratio (%) | 5-Year Return (%) |
| Bank of India Small Cap Fund | 50.57 | 1516.96 | 2.01 | 38.51 |
| Canara Robeco Small Cap Fund | 42.12 | 12590.85 | 1.67 | 36.02 |
| Nippon India Small Cap Fund | 183.185 | 62259.56 | 1.42 | 38.10 |
| Quant Small Cap Fund | 300.8034 | 26644.74 | 0.64 | 50.62 |
| Tata Small Cap Fund | 44.6599 | 9319.04 | 1.68 | 34.98 |
Choosing the Right Equity Mutual Fund: Key Considerations
When selecting the best equity mutual fund for your investment goals, consider the following factors:
- Investment Horizon: The time horizon will determine the growth of your funds. Equity mutual funds require a longer time duration to perform to their potential and generate returns. It is absolutely necessary to have an investment horizon of Five years atleast
- Risk Tolerance: Investing in mutual funds is always a bumpy ride, so you must be ready to accept market downturns. It is important to have a good risk tolerance
- Investment Objectives: Be clear of your financial objectives whether it is capital appreciation, income generation, or a combination of both.
- Fund Manager Expertise: Research the fund manager’s experience, investment philosophy, and performance track record.
- Expense Ratio: Compare the expense ratios of different funds to ensure you’re not paying excessive fees.
Conclusion
Equity mutual funds offer a great way to generate good returns for India’s youngsters. It is important to start investing early in your careers as staying invested over a longer period would help you get substantial returns. These 25 funds mentioned here are dynamic and that have provided extraordinary return over the last five years with all the parameters. By evaluating all the factors mentioned here, investors can choose mutual funds that are in alignment with their financial goals and risk tolerance.
