Yesterday, I was analyzing a few top-performing mutual funds in India for my portfolio. I knew I had to dig deep to find the best options. Out of hundreds of available choices, I needed to select only two top-performing mutual funds in India. We are all familiar with the basic parameters used to evaluate mutual funds, and I applied those as well. However, I placed extra emphasis on the management team’s vision and strategy. Interestingly, I found that 63% of equity mutual funds fail to outperform their benchmarks over three years, leaving me with only 37% to consider.
Through my research and experience in the financial market, I’ve developed a sense of what to focus on when narrowing down the 213 available equity mutual funds. After completing my analysis, I thought let’s share my findings with the people who enjoy reading my blogs. While I’ve put in my best effort to analyze and pick the top performers, I understand that my selections might not resonate with everyone, and there’s always room for different opinions. That being said, here are the 5 mutual funds that, based on my analysis, are currently among the top performers in India. Let’s dive in! The first one happens to be a favourite of Pranjal Kamra, founder of Finology Ventures, a SEBI-registered investment advisory firm.
Also read: Types of Mutual Funds: Equity, Debt, ETF, Index and more
Equity Mutual Fund Performance in the Last 3 Years: A Breakdown
63% of equity mutual funds have not been able to beat their benchmarks in the last three years. Out of 213 equity mutual funds, 135 funds have underperformed. (Source: The Economic Times)
This leaves only 78 funds that have outperformed their benchmarks during this period.
The mid-cap category was hit the hardest. Around 80% of mid-cap funds (20 out of 25) have failed to outperform their benchmarks. Next were the small cap funds, where 74% (17 out of 23) underperformed against their benchmarks. For the large-cap funds, 64% underperformed in the last three years.
ELSS and multi-cap funds had 56% of their funds underperforming over
Flexi-cap and large & mid-cap funds both saw 69% of funds underperform. Each category had 26 funds, and 18 from each failed to beat their benchmarks. Focused funds didn’t fare well either. 16 funds in this category struggled to beat their benchmarks.
5 Top Performing Mutual Funds in India
| Fund Name | Category | Risk | Expense ratio (%) | AUM (Fund size) | Exit load | 1-Year Return (%) | 3-Year Return (%) |
| Parag Parikh Flexi Cap Fund Direct-Growth | Flexi Cap | Very High | 0.63% | ₹78,490 Cr. | 2.0% | 41.71% | 18.69% |
| Motilal Oswal Large and Midcap Fund Direct - Growt | Large & Mid-Cap | Moderate to High | 0.54% | ₹5,811 Cr. | 1.0% | 67.35% | 29.29% |
| Kotak Emerging Equity Fund Direct-Growth | Mid-Cap | Very High | 0.34% | ₹51,366 Cr. | 1.0% | 51.91% | 26.16% |
| Nippon India Small Cap Fund Direct- Growth | Small-Cap | Very High | 0.65% | ₹61,000 Cr. | 1.0% | 52.31% | 32.53% |
| Kotak ELSS Tax Saver Fund Direct-Growth | ELSS | Moderate to High | 0.52% | ₹6,298 Cr. | 0% | 43.13% | 21.77% |
Let’s know the management and the top holdings of the Top performing Mutual Funds in India
Parag Parikh Flexi Cap Fund Direct-Growth
Parag Parikh Flexi Cap Fund Direct-Growth is quite a favourite of Pranjal Kamra, founder of Finology Ventures, a SEBI-registered investment advisory firm. He always talks about this scheme in his YouTube videos in the Flexi cap category.
Investment Objective: The scheme aims for long-term capital growth through investments primarily in equity and equity-related instruments. The fund managers are Raj Mehta, Rajeev Thakkar, Rukun Tarachandani, and Mansi Kariya.
Top Sectors
-Financial: 30.47%
-Services: 12.3%
-Technology: 9.66%
-Energy: 7.71%
Top Holdings
-HDFC Bank Ltd.: 7.98%
-Power Grid Corporation of India Ltd.: 6.74%
-Bajaj Holdings & Investment Ltd.: 6.64%
-ITC Ltd.: 5.65%
Motilal Oswal Large and Midcap Fund Direct-Growth
Investment Objective: The scheme aims to provide medium to long-term capital growth by investing mainly in large and mid-cap stocks. Top management includes Rakesh Shetty, Niket Shah, and Ajay Khandelwal.
Top Sectors
-Capital Goods: 25.63%
-Services: 17.76%
-Financial: 10.3%
-Consumer Discretionary: 8.79%
Top Holdings
-Trent Ltd.: 7.39%
-Zomato Ltd.: 7.09%
-Kalyan Jewellers India Ltd.: 6.37%
-Suzlon Energy Ltd.: 5.29%
Kotak Emerging Equity Fund Direct-Growth
Investment Objective: The scheme aims for long-term capital growth by investing mainly in mid-sized companies’ equity and related securities.
Top Sectors
-Capital Goods: 13.7%
-Technology: 12.55%
-Financial: 11.88%
-Chemicals: 9.41%
Top Holdings
-Persistent Systems Ltd.: 3.95%
-Mphasis Ltd.: 3.52%
-Oracle Financial Services Software Ltd.: 3.48%
-Supreme Industries Ltd.: 3.22%
Nippon India Small Cap Fund Direct-Growth
Investment Objective: The scheme aims for long-term capital growth by investing mainly in small-cap equity and related instruments. Managed by Samir Rachh.
Top Sectors
-Capital Goods: 20.34%
-Financial: 11.69%
-Services: 9.23%
-Consumer Staples: 8.27%
Top Holdings
-HDFC Bank Ltd.: 1.78%
-Tube Investments of India Ltd.: 1.65%
-Multi Commodity Exchange of India Ltd.: 1.57%
-Voltamp Transformers Ltd.: 1.5%
Kotak ELSS Tax Saver Fund Direct-Growth
Investment Objective: The scheme aims to provide long-term capital growth through a diversified equity portfolio while offering income tax benefits as per current tax laws.
Top Sectors
-Financial: 22.39%
-Energy: 17.25%
-Technology: 8.09%
-Capital Goods: 6.74%
Top Holdings
-HDFC Bank Ltd.: 7.8%
-Reliance Industries Ltd.: 4.31%
-Infosys Ltd.: 3.86%
-State Bank of India: 3.5%
Let’s Wrap it Up- Top Performing Mutual Funds in India
These are the 5 top-performing mutual funds in India based on my analysis. In a landscape where mutual funds are aggressively marketed as a source of passive income, it’s easy to feel overwhelmed by the vast number of options available. Many newcomers, and even seasoned professionals, may lack the necessary information due to not being actively engaged in the market. With approximately 63% of equity mutual funds failing to outperform their benchmarks over the past three years, it’s clear that a significant portion of investments is not generating adequate returns. This is where guidance becomes essential. I encourage you to conduct thorough research or consult with professionals to make informed investment decisions. Remember, the right guidance can help you navigate this complex world of mutual funds.
Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. Contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a period of time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfil their responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
