Here are the best rated mutual funds for May 2020

mutual funds

Mutual fund investments have become very popular among investors given the potential for returns and the ease of investment. Mutual funds are managed by experts thereby allowing individuals to invest in a diversified portfolio and minimize their risks. Moreover, investments in Equity Linked Saving Schemes (ELSS) also allow tax benefits thereby helping individuals to maximize their wealth and minimize their tax liability.

Mutual funds come in different types of schemes and each scheme has a distinct investment objective and risk profile. Individuals can, therefore, choose a scheme based on their investment preference and risk profile. When choosing a mutual fund scheme, investors often want to invest in the top performing schemes which give a consistent return so that they can maximize their return earning potential. As such, your clients might ask you to suggest some of the best funds for their investments. Do you know which funds are currently leading the mutual fund market?

As a financial advisor, you should have knowledge of the leading mutual fund schemes so that you can advise your clients to pick up the best schemes based on their investment preference. So, here are some of the common variants of mutual fund schemes and the top funds in each –

Equity mutual funds

Equity mutual funds are those funds which have at least 65% of their portfolio’s exposure in equity or equity linked securities. These funds are characterized by high risk-high return concept since equity investments are prone to market volatilities but can yield attractive returns. 

Equity mutual funds are suitable for those investors who –

  • Have a healthy risk appetite and are willing to expose their investments to market volatility
  • Have a long term investment horizon over which the risks would minimize and the returns would maximize
  • Want to earn attractive returns from equity exposure

Top 3 equity mutual fund schemes-

Name of the fund

Assets under Management (AUM)* 

1 year return*

3 year return* 

5 year return*

SBI Bluechip Fund – Growth

INR 19,785.45 crores

-15.15%

-1.04%

4.64%

Nippon India Large Cap Fund – Growth 

INR 8675.90 crores

-24.02%

-2.91%

3.13%

Mirae Asset Large Cap Fund – Regular – Growth

INR 15,174.51 crores

-14.45%

1.49%

7.32%

*As on 18th June 2020

Mention source

(Source: Turtlemint money)

Equity Linked Saving Schemes (ELSS)

ELSS mutual funds are a type of equity mutual funds which give an added advantage of tax saving. The money that investors invest is allowed as a deduction from their taxable income under Section 80C. They can claim a total deduction of INR 1.5 lakhs which allows them to save up to INR 45,000 in taxes (if they are in the 30% tax bracket). Moreover, on redemption, the returns are considered to be a long term capital gain and are exempted till INR 1 lakh. If the returns exceed INR 1 lakh, the excess is taxed at 10%. Thus, ELSS funds are quite popular among investors given their tax benefits.

ELSS funds are, therefore, suitable for the following types of investors –

  • Who want to invest in equity and get tax benefits
  • Who have a minimum investment horizon of 3 years since the scheme has a lock-in period of 3 years
  • Who have a healthy risk appetite to face market volatility 

Top 3 ELSS schemes-

Name of the fund

Assets under Management (AUM)* 

1 year return*

3 year return* 

5 year return*

Axis Long Term Equity Fund – Growth

INR 19,126.58 crores

-6.45%

4.38%

7.28%

DSP Tax Saver Fund – Growth 

INR 5358.60 crores

-10.46%

0.27%

6.81%

Aditya Birla Tax Relief 96 – Growth

INR 9176.96 crores

-7.26%

1.54%

6.46%

*As on 18th June 2020

(Source: Turtlemint money)

Debt Mutual funds

Debt mutual funds are those where a majority of the portfolio is invested in debt or debt oriented securities. These funds invest in fixed-income instruments thereby eliminating the risk of market volatility. The risk profile of debt mutual funds is, therefore, low and the returns are also low but stable.

Debt mutual funds are suitable for investors who –

  • Are averse to market risks
  • Want low but steady returns from their investments
  • Are looking for inflation-adjusted returns from debt investments

Top 3 debt mutual fund schemes-

Name of the fund

Assets under Management (AUM)* 

1 year return*

3 year return* 

5 year return*

ICICI Prudential Regular Savings Fund – Growth

INR 1544.25 crores

4.31%

5.66%

8.40%

Nippon India Hybrid Bond Fund – Growth 

INR 962.57 crores

-14.32%

-2.37%

2.31%

UTI Regular Savings Fund – Growth

INR 1657.88 crores

-2.52%

1.85%

5.11%

*As on 18th June 2020

(Source: Turtlemint money)

Fund of funds

Fund of funds is a mutual fund scheme where the portfolio of the scheme is invested in other mutual fund schemes instead of equity or debt securities. Thus, these schemes invest in other mutual funds based on the investment objective of the scheme. There are different types of fund of fund schemes depending on the mutual funds into which the scheme has invested like international fund of funds, gold funds, etc.

Fund of funds is suitable for all types of investors since there are different schemes and each scheme has a different investment objective and risk profile. So, if investors want to diversify their investments, they can choose to invest in these types of mutual fund schemes.

Top 3 fund of funds schemes-

Name of the fund

3 year return*

5 year return* 

Return since launch*

PGIM India Global Equity Opportunities Fund – Growth

21.21%

8.54%

9.50%

Franklin India Feeder – Franklin US Opportunities Fund – Growth 

21.17%

14.08%

18.22%

Edelweiss Greater China Equity Offshore Fund – Growth

18.32%

10.59%

12.85%

*As on 18th June 2020

(Source: Turtlemint money)

Hybrid Mutual funds

Hybrid mutual funds, also called balanced mutual funds, are funds whose portfolio is invested in both equity and debt. The proportion of equity and debt investment depends on the investment objective of the fund and the expectation of returns.

Hybrid mutual funds are suitable for investors who –

  • Are looking to invest in a fund with a moderate risk profile and which offers moderate returns
  • Want to have a balanced mix of equity and debt investments in their portfolio

Top 3 hybrid mutual fund schemes-

Name of the fund

Assets under Management (AUM)* 

1 year return*

3 year return* 

5 year return*

ICICI Prudential Equity & Debt Fund – Growth

INR 17,423.14 crores

-10.67%

0.69%

6.09%

HDFC Hybrid Equity Fund – Growth 

INR 15,747.42 crores

-13.15%

-2.94%

2.43%

ICICI Prudential Balanced Advantage Fund – Regular – Growth

INR 24,582.47 crores

-3.96%

3.41%

6.34%

*As on 18th June 2020

(Source: Turtlemint money)

Specialty mutual funds

Specialty mutual funds are those which invest according to a particular investment objective. This investment objective can be planning for retirement, saving for the future of a child, etc. These funds invest so as to create maximum wealth for investors so that they can achieve their goals.

Specialty mutual funds are suitable for –

  • Investors who want to invest as per a particular investment goal
  • Investors who have a long term investment horizon

Top 3 specialty mutual fund schemes-

Name of the fund

1 year return*

3 year return* 

5 year return*

Nippon India Retirement Fund – Income Generation Scheme – Regular – Growth

4.54%

4.67%

7.05%

Tata Retirement Savings Fund – Regular – Conservative Plan 

4.51%

4.65%

7.16%

SBI Magnum Children’s Benefit Fund 

-0.79%

4.64%

9.11%

*As on 18th June 2020

(Source: Turtlemint money)

So, these are some of the best performing mutual funds in the popular categories which your clients might like. You can recommend these funds to your clients if they are looking to invest in mutual fund schemes. Moreover, if your clients have a particular financial need in mind for which they want to invest in mutual funds, you can also recommend Mintpacks. Mintpacks are readymade investment packages which contain the top performing mutual fund schemes based on the investment need of your clients. For instance, Tax Saver Mintpack contains the top ELSS funds which can help your clients reduce their tax liabilities while investing in mutual funds. Similarly, a Dream Home Mintpack allows your clients to invest towards financing their own home. Mintpacks contain hand-picked mutual fund schemes which provide the best investment options for your clients to invest in.

As a financial advisor you need an all-round knowledge about the financial markets and given the popularity of mutual funds, knowledge of these investment avenues is a must. So, understand the different types of mutual fund schemes and the top funds of each category so that you can advise your clients on the best funds to choose from for maximum returns.

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