Investing in 2021 is a necessity and mutual funds are the way for most people.
Additionally, with the advent of the “Mutual Funds Sahi Hai!” campaign, people all over India have understood the importance of investing in mutual funds. In this day and age where you have 100s of funds to choose from, the problem is choosing the right one. The tough part about “choosing the right one” is ensuring that the ‘best’ is future-based and not just on past performance.
This article helps you answer exactly that. It gives you a top 10 list of mutual funds in 2021 that, in all likelihood, will help you compound your wealth.
Parag Parikh Flexi Cap Fund
If there is one mutual fund that stands at the pinnacle of trust and competence – it is PPFAS Flexi Cap Fund.
Special Feature: The fund invests in companies outside of India as well.
Over the last 5 years, the AMC has delivered 23.58% returns while the NIFTY has returned 18%.
₹10,000 invested in this fund would be worth approximately ₹32,000 in 5 years!
Axis Bluechip Fund – Growth
This fund mainly invests in large-cap companies that are stable and secure but still provides market-beating returns.
Over the last 5 years, the fund has delivered about 20-22% annualized.
₹10,000 invested in this fund would be worth about 29,000 in 5 years!
Quant Absolute Fund – Growth
This is an Aggressive Hybrid Fund i.e. it invests in both debt and equity.
Even though the fund uses debt as well, it has returned 21% CAGR in the last 5 years.
₹10,000 invested in this fund would be worth approximately 28,000 in 5 years.
This would be ideal for people who want returns but dislike volatility.
Canara Robeco Bluechip Equity Fund
This fund mainly invests in large-cap companies but has a small percentage of investments in mid-cap companies.
Over the last 5 years, the fund has delivered a 19% CAGR – a ₹10,000 investment would be worth around ₹25500.
Cons – has 49 stocks in a portfolio. Shows lack of conviction.
Canara Robeco Flexi Cap Fund
As the name suggests, the fund invests across all three compartments. This fund has delivered 21% CAGR for 5 years.
This again, is very impressive as ₹10,000 invested would be worth ₹27,700.
Cons – just like with this ‘bluechip’ counterpart, the manager shows lack of conviction. They have 60 stocks in their portfolio as of now.
UTI Flexi Cap Fund
This fund would be ideal for a young adult because they have majority of their investments in Mid and Small Cap stocks.
Over the last 5 years, the fund has delivered 23% annualized returns which translates to ₹10,000 being worth about ₹30,000.
Cons– Unfortunately, the fund managers here too have over 60 stocks in their portfolio.
Note: At the end of the day, returns matter most but it is our belief that a manager who has a lot of stocks in their portfolio lacks conviction.
Axis Small Cap Fund – IDCW
This fund is ideal for young individuals as it invests in small caps and these companies(typically) give better returns as they have a smaller base to compound on.
Over the last 5 years, the fund has delivered 23% returns and an investment of ₹10,000 would be worth ₹29,500.
Cons – again, the issue is the lack of conviction. The fund has over 60 stocks but they can be exempted as it is a ‘small-cap’ portfolio. You cannot rely on the data supplied by the small companies and you have a liquidation problem with them as well.
Mirae Asset Emerging Bluechip Fund – Growth
This fund made us question our belief about a high number of stocks in a portfolio. The fund invests in MidCap and LargeCap companies and therefore enjoys both capital appreciation and low volatility.
Over the last 5 years, the fund has annualized 22.84% while in the last 10 years it has delivered 25%!
If you had invested ₹10,000 in this fund 10 years ago, it would be worth approximately ₹98,000 today!
Cons – The fund has over 66 stocks in the portfolio.
Axis Midcap Fund
This fund has delivered returns in the past and in our opinion, its future is promising. The fund has delivered 24% CAGR over the last 5 years and 22% CAGR over the last 10 years.
An investment of ₹10,000 in this fund 5 years ago would mean ₹29,000 today.
Cons- The manager has over 60 stocks in the portfolio.
PGIM India Midcap Opportunities Fund – Growth
If we extrapolate the past performance and take a margin of safety, this fund is likely to return over 19% CAGR in the future. Over the last 5 years, it has delivered a CAGR of 23%.
A CAGR of 23% means that a ₹10,000 investment would be worth about ₹29,000!
This list of mutual funds in 2021 is not just a filtered list of best-performing funds. It has been formulated after careful consideration of the management’s competence, integrity, and fund type.
Disclaimer: the views expressed by the writer are their own and not of the website or the management. The writers may or may not have a stake in the mentioned companies. Readers are requested to consult a SEBI registered investment advisor and make a decision accordingly.