Best Mutual Funds to Consider Investing in 2020 | North Loop Official Blog
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22 Oct 2020

Best Mutual Funds to Consider Investing in 2020

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Introduction -

Mutual funds are popular investment instruments that can deliver strong returns. These market-based instruments also give exposure to expert-managed portfolios and provide the advantage of scale as well as returns at a low cost. However, the most common question when it comes to mutual funds is ‘what are the best mutual funds to invest?’ That is the reason in this article we have created the lists of the best mutual funds in India based on different categories and other factors. But before we begin, let us look at some of the parameters which can help you judge the potential of a mutual fund -

Identify the financial objective - There are 1500+ mutual funds in the market and to choose the best mutual fund in India among those first requires identification of your own financial goals. That is because different mutual funds serve varying objectives, and it is best to choose one that aligns with your financial objectives and investment horizon.

Risk tolerance - It is critical to assess your risk tolerance before choosing to invest in a mutual fund. If you are comfortable in taking investment risks, investing in funds which give high returns such as Small Cap Equity Funds and Mid Cap Equity Funds can be a good option. However, if you are risk-averse, you can invest in Large Cap Equity Funds or Debt Funds. One thing you must remember is that no fund is entirely risk-free. Therefore, it is best to identify your risk profile and invest in funds accordingly. Diversification is also a great option to mitigate overall investment risks.

Fund performance - By observing the consistency of a fund over some time and analysing its past performance, you can judge its potential. Even though that may not be indicative of its future returns, it can help in determining the ability of a fund to accomplish its goals.

Assets under Management (AUM) & costs - AUM helps in indicating the capability and potential of a fund as it throws light upon the size of the fund, the total number of assets it holds etc. Even though a high AUM can get considered as a positive indicator of quality and management experience, it can also expose a fund to market risks. Costs like the Expense Ratio should also get considered when choosing the best mutual funds to invest. As per SEBI, a maximum of 1.5% expense ratio gets considered as satisfactory.

Managerial expertise - It is important to choose funds that get handled by experienced fund managers because the ability to understand the market movements is crucial for placing optimum bets and obtaining sufficient returns. Fund managers also use critical research procedures of evaluation and other economic trends to form a good portfolio. Therefore, managerial expertise becomes a crucial factor in choosing a well-handled fund portfolio.

The best mutual funds to invest in 2020 as per expert’s suggestions are as follows -

Best Mutual Funds Equity -
   
Fund Name   
   
Fund Type   
   
5 YR Returns   
   
Axis Bluechip Fund   
   
Large Cap   
   
8.75%   
   
Axis Small Cap Fund   
   
Small Cap   
   
7.54%   
   
Motilal Oswal Midcap 30 Fund   
   
Mid Cap   
   
1.94%   
   
DSP Tax Saver Fund    
   
ELSS   
   
6.50%   
   
SBI Magnum Global Fund   
   
Thematic   
   
5.08%   


Best Mutual Funds Debt -
   
Fund Name   
   
Fund Type   
   
5 YR Returns   
   
ICICI Prudential Long Term Bond Fund   
   
Long Duration   
   
10.34%   
   
SBI Magnum Medium Duration Fund   
   
Medium Duration   
   
10.09%   
   
ICICI Prudential Short Term Fund   
   
Short Duration    
   
9.01%   
   
Aditya Birla Sun Life Liquid Fund   
   
Liquid   
   
7.22%   
   
L&T Money Market Fund   
   
Money Market   
   
8.58%   


Best Mutual Funds Hybrid -
   
Fund Name   
   
Fund Type   
   
5 YR Returns   
   
DSP Equity & Bond Fund    
   
Aggressive   
   
7.18%   
   
Franklin Pension Fund   
   
Balanced    
   
6.27%   
   
Kotak Debt Hybrid Fund   
   
Conservative   
   
8.15%   
   
IDFC Dynamic Equity Fund   
   
Dynamic Asset Allocation   
   
5.34%   


Best Mutual Funds ELSS -
   
Fund Name   
   
5 YR Returns   
   
Axis Long Term Equity   
   
7.11%   
   
Aditya Birla SL Tax Relief 96   
   
5.85%   
   
DSP Tax Saver   
   
6.50%   
   
Motilal Oswal Long Term Equity   
   
8.00%   


Best Mutual Fund SIP -
   
Scheme Name   
   
SIP amount   
   
Axis Bluechip Fund   
   
Rs.2000-5000   
   
ICICI Prudential Bluechip Fund    
   
Rs.2000-5000   
   
Motilal Oswal Multicap 35 Fund   
   
Rs.5000-10000   
   
Mirae   Asset Emerging Bluechip Fund   
   
Rs.5000-10000   
   
ICICI Prudential Regular Savings Fund   
   
Above Rs.10000   
   
SBI Magnum Multicap   
   
Above Rs.10000   


You can invest in mutual funds online by signing up with North Loop. We offer a digital investing platform, 24*7 customer services, personalised fund recommendations based on your goals and risk profile as well as the help of professional mutual fund advisors to make your investing journey a seamless one.

Click here to sign up.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.