Best Mutual Funds to Invest in 2019

Are you looking for Best Mutual Funds to Invest in India or top 10 Mutual Funds to invest in 2019 or Best ELSS Funds to invest in 2019 or Best Performing Mutual Funds for SIP..?

Then you are at the right place.. Read till the end, and all your questions will be answered

There are many blogs/ articles which will give you the list of Mutual Funds to invest in 2019 and you will observe that all such lists will be different. Also, the list published by the same website in the last year i.e. 2018 will also be much different than the list for 2019.

Whenever, you invest based on “top-rated funds”, look at the basis of such ratings. For example, an extract from Value Research website :

What is Value Research Fund Rating?

Value Research Fund Rating (Risk-adjusted Rating) is a convenient composite measure of both returns and risk. It is purely quantitative and there is no subjective component to the Fund Rating. The assessment does not reflect Value Research’s opinion of the future potential of any fund. It only gives a quick summary of how a fund has performed historically relative to its peers.

Have you noticed that when you invested based on such ratings either you did not get the desired results or you feel that your friend’s mutual fund portfolio is performing better than yours?

This is bound to happen as one didn’t have conviction or did not undergo proper research while investing and investment was done without any clear goal/ objective in mind. For example, investing for tax saving. If you have invested with the goal of tax saving, why are you worried about fund performance now? You already saved tax, isn’t it?

Do you want to come out of this vicious circle?

Ask yourself the following questions..

Why do you want to invest in Mutual Funds..?

What Return you are expecting..?

What is your Risk Appetite & Risk Profile..?

What other investments you are holding..?

How long you want to stay invested..?

Have you done proper Asset allocation (Debt, Equity)..?

Most of the Answers for above questions will be different for different individuals.

Your financial plan is like your fingerprints.

It is unique to you. Neither can you use someone else’s investment strategy nor can they use yours. What may be elixir for one could be poison for another. Hence, investing based on friends / colleagues advice will not give the desired results.

If you have read this blog so far, you have more interest in your finances than most people searching “Top 10 Mutual Funds” and you have taken one step closer to financial freedom.

There are around 2000 (Two Thousand) Mutual Fund Schemes in India (AMFI Report, Feb 2019)

Each mutual fund scheme is suitable to meet different needs. Each scheme has different :

– objective

– risk return metrics

– liquidity

– taxation and exit load structure

 

For example, let’s look at ELSS category, there are about 71 schemes in ELSS category. We have analysed all these funds and a few of them are given below:

Axis Long term Equity Large Cap Bias
Aditya Birla Sun life Tax releif’96 Multi Cap approach
Franklin India tax Large Cap Bias
Reliance tax saver Mid & Small Cap Bias
IDFC tax saver Mid & Small Cap Bias
SBI Magnum Tax gain* Large Cap Bias
Mirae tax saver** Large Cap bias

(Above schemes are for illustrative purposes only and not a recommendation)

*SBI Magnum Tax gain was Holding 9% cash as on Feb’2019 against the category average of 5%.

**Mirae tax saver was not rated by research websites before a few months as 3 years were not complete. Currently, it’s 5 star rated scheme.

Choosing Suitable scheme for investment and proper combination of schemes is very important as diversification in Mutual Funds is very different than diversification in stocks. Each mutual fund scheme invests in 30 to 50 stocks. So having more number of schemes may lead to overlapping or over diversification which affects returns negatively.

 

To conclude

  1. Don’t rely on random advice or google as they only know top 10 funds for investment and not what is suitable for you.

Focus not on the Best, focus on identifying what is most suitable for you.

Take help of reliable Financial Planner/Advisor or perform proper research (if you are DIY investor)

  1. Never judge an article by its heading 😉

We stopped publishing Mutual funds recommendation list long back as we believe that general recommendations will not help you to create serious wealth. Don’t play with your hard earned money.

We provide following services for a very nominal fees :

  • Customised Mutual Fund recommendations
  • Comprehensive Customised Financial Plan
  • One to one coaching for Do it Yourself – DIY investor

Click here or Contact us on nitesh@nimitwealthmanagement.com or +91 9702604090

 

CA Nitesh Buddhadev

Nimit Wealth Management

 

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Mutual Fund Recommendation for FY 2018-19

“Change is the only constant thing in this world”

From “Mutual Funds are subject to market risk” to “Mutual Fund Sahi hai” there have been many changes in last few months.

Before we see the list of short listed mutual funds one can invest in this FY 2018-19, one should be aware of the changes which have taken place in last few months.

(Read till the end, you will not be disappointed :))

Changes due to ‘Categorisation and Rationalisation of Mutual Fund Schemes initiative’ of SEBI)

SEBI has specified 36 categories of mutual fund schemes in total. As per the new rules, the AMCs will not be allowed to offer two schemes under different names with identical investment mandates. One category of mutual fund will be permitted to sell only one mutual fund scheme. As a result of this mandate, the fund houses have now realigned their schemes and portfolios to classify them under the newly formed categories.

Changes in brief

Scheme name

Earlier, the mutual fund scheme names consisted of words like “opportunities”, “advantage” and “prudence” to make it look seemingly lucrative. However, the investor was unable to gauge the inherent risk while making an investment. After passing of the regulation, many scheme names have been changed in order to enhance existing disclosure.

Classification of Schemes

After the recategorization, SEBI has specified the entire universe of mutual funds to be classified under these 5 categories i.e. Equity, Debt, Hybrid, Solution oriented and others

Modification of scheme attributes

This includes the investment mandate, the benchmark and the investment strategy of each mutual fund scheme.

Changes in the Definitions

After implementation of the regulation, large-cap stocks would be the top 100 companies of the underlying benchmark in terms of full market capitalization. Mid-caps would be companies ranking from 101st to 250th and small-caps would be companies ranking from 251st onwards in terms of full market capitalization.

We note above, that almost everything has changed and the first thought is :

The past performance of many schemes are now irrelevant and so are the Mutual Fund Star ratings offered by various websites

Yes! You read it right, Star rating and Ranking for many schemes are now irrelevant as :

  1. To fall in line with SEBI mandate many schemes have been merged
  2. Fundamental Attributes have changed like some Midcap schemes are now Multicap and  some of the Multicaps are now in Focused categories.

Generally, Mutual Fund Star rating and ranking should not be the criteria to Select the fund.

Schemes Sub categories & its characteristics

Equity Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Multi cap Min 65% in across Large, Mid & Small cap companies
Large cap Min 80% in Large cap companies
Large & Mid cap Min 35% in Large cap companies & Min 35% in Midcap companies
Mid cap Min 65% in Mid cap companies
Small cap Min 65% in Small cap companies
Dividend Yield Min 65% in Equities investing predominantly in Dividend yield stocks
Value Min 65% in Equities which should follow value strategy
Contra Min 65% in Equities which should follow contrarian strategy
Focused Min 65% in Equities (Maximum 30 stocks). Focus can be on large cap Multi cap, Midcap or Small cap
Sectoral Min 80% in stocks of a particular sector
Thematic Min 80% in stocks of a particular theme
ELSS (Tax Saving) Min 80% in Equity and Equity related instrument

 

Debt Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Overnight Investment in overnight securities having maturity of 1 day
Liquid Maturity of up to 91 days only
Ultra Short Term Macaulay duration of the portfolio is between 3 months ‐ 6 months
Low Duration Macaulay duration of the portfolio is between 6 months‐ 12 months
Money Market Maturity of up to 1 year
Short Duration Macaulay duration of the portfolio is between 1 year – 3 years
Medium Duration Macaulay duration of the portfolio is between 3 years – 4 years
Medium to Long Duration Macaulay duration of the portfolio is between 4 years – 7 years
Long Duration Fund Macaulay duration of the portfolio is greater than 7 years
Dynamic Bond Investment across duration
Corporate Bond Min 80% in invested in Corporate Bonds
Credit Risk Min 65% in invested in Corporate Bonds below highest rated instruments
Banking & PSU Min 80% in invested in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
GILT Min 80% in invested in Gsecs across maturity
Gilt Fund with 10 year constant duration Min 80% in invested in Gsecs such that the Macaulay duration of the portfolio is equal to 10 years
Floater Fund Min 65% in invested in Floating rate instruments

 

Hybrid Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Conservative Hybrid 10 ‐ 25% in Equity related instruments & 75 to 90% in Debt instruments
Balance Hybrid 40 ‐ 60% in Equity related instruments & 40 to 60% in Debt instruments
Aggressive Hybrid 65 ‐ 80% in Equity related instruments & 20 to 35% in Debt instruments
Dynamic Asset Allocation/ Balanced Advantage Investment in equity/ debt that is managed dynamically
Multi Asset Allocation Min 10% investment in atleast 3 asset classes
Arbitrage Fund Min 65% in Equity related instruments which should follow Arbitrage strategy
Equity Savings Min 65% in Equity related instruments & Min 10% in Debt instruments

 

Solution Oriented Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Retirement Fund Scheme having a lock‐in for at least 5 years or till retirement age whichever is earlier
Children’s Fund Scheme having a lock‐in for at least 5 years or till the child attains age of majority whichever is earlier

 

Other Mutual Fund Schemes

Sub Categories

 

Scheme Characteristics
Index Funds/ ETFs Min 95% in stocks of a particular Index
FoFs (Overseas/ Domestic) Min 95% in the underlying Fund

 

Do you still believe Selecting Mutual Fund schemes is simple? 😉

It’s not rocket science however, its not that easy to zero down on the specific scheme suitable to your requirements out of the thousands of Mutual Fund schemes available in the Market.

Have you come across any one who got super rich by Investing in some random 5 star or top ranking Mutual Funds or trading / investing in tip based Equity shares..??

Do you know what is Risk..?

“Risk comes from not knowing what you are doing”

You are investing your hard earned Money, please take informed investing decisions.

Coming to the subject of the Article…

Here is the list of…

Top performing Mutual Fund in India (It may stop performing anytime! Past performance does not Guarantee Future Performance)

Best Mutual Fund to invest in 2018 (There is nothing called Best in Personal Finance)

5 Star rated Mutual Mutual Fund  (Star Changes more frequent than you think, Don’t follow it blindly)

 

Shortlisted Mutual Funds to invest in FY 2018-19 by NIMIT Wealth Management 🙂 (July – Aug 2018)

(Well Researched. However, it may contain some Top rated, Best Mutual Funds or 5 star rated funds)

 

Equity – Large Cap

1) ABSL Focused Equity Fund  (Erstwhile ABSL Top 100 Fund)
2) Motilal Focused 25 fund       (Erstwhile Motilal most focused 25 fund)
3) SBI Bluechip Fund

 

Equity – Large & Mid Cap

1) DSPBR Equity Opportunities Fund        (Erstwhile DSPBR Opportunities)
2) Mirae asset Emerging Blue Chip Fund  (Earlier it was midcap scheme )

 

Equity – Multi Cap

1) ABSL Equity Fund
2) Franklin India Focused Equity   (Erstwhile Franklin India high growth co’s)
3) Kotak Standard Multicap Fund  (Erstwhile Kotak Select Focus Fund)
4) Motilal oswal Multicap 35 Fund (Erstwhile Motilal most focused multicap 35)
5) SBI Magnum Multicap Fund

 

Equity – Mid Cap

1) Franklin India Prima Fund
2) HDFC Midcap Opportunities Fund
3) L&T Midcap Fund

 

Equity – Small Cap

1) ABSL Small Cap Fund (Erstwhile ABSL Small & midcap Fund)
2) Franklin India smaller companies fund
3) Reliance small cap fund
4) SBI Small cap Fund

 

Equity – Value Oriented

1) ABSL pure value fund
2) HDFC Capital Builder value fund
3) L&T India Value Fund
4) Tata Equity PE Fund

 

Equity – ELSS (Tax Saving)

1) ABSL Tax relief’96 Fund
2) Axis Long term Equity Fund
3) DSPBR Tax Saver Fund
4) Franklin India Tax Shield
5) L&T Tax Advantage Fund
6) Reliance Tax Saver Fund

 

Hybrid – Aggressive (Equity Oriented)

1) ABSL Equity Hybrid ’95 Fund (Erstwhile ABSL Balanced ’95 Fund)
2) DSPBR Equity & Bond Fund (Erstwhile DSPBR Balanced)
3) HDFC Hybrid Equity Fund (Erstwhile HDFC premier multicap & HDFC Balanced)
3) L&T Hybrid Equity Fund (Erstwhile L & T India prudence fund)
4) Reliance Equity Hybrid Fund (Erstwhile Reliance Regular Savings Balanced)

 

Hybrid – Equity Savings

1) ABSL Equity Savings
2) HDFC Equity Savings Fund
3) L&T Equity Savings Fund

 

Hybrid – Dynamic Asset Allocation/ Balanced Advantage

1) ABSL Balanced Advantage Fund
2) ICICI Balanced Advantage Fund

 

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PLEASE READ THIS :
  • Asset Allocation is a MUST.
  • Above is just a list of Shortlisted Funds based on our internal research.
  • Selecting scheme of Mutual Fund is only half job done. How much amount to Invest in which Scheme is very crucial.
  • Investment decisions depend upon your Goals, Investment horizon, Risk profile, Existing Investments and various other factors.
  • Investing is a Serious Business, Don’t do it randomly.
  • Review periodically & Rebalance as and when required.
  • Have a reasonable expectation of Returns on your portfolio. Over Expectations hurt!
  • When you invest in Equity, give it time to perform atleast that much as you give your Gold and Real Estate. 🙂
  • If required, Take help of Financial Advisor to achive your Financial Goals (Even Virat Kohli and Lionel Messi have coaches to guide them)

 

CA Nitesh Buddhadev

CA Mitsu Buddhadev

Nimit Wealth Management

You may reach out to us at info@nimitwealthmanagement.com for any queries, suggestions or feedback.

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