12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax http://www.planmoneytax.com/best-mutual-fund-to-invest-in-india-for-2016/ 1/29 PlanMoneyTax Best Mutual Fund To Invest in India For 2016 December 21, 2015 by Chandrakant Mishra — Add Comment We want to secure our future. We want to accumulate the wealth to fulfill our wishes. To achieve this goal, equity mutual funds are the best investment. But the path of equity mutual fund is slippery and bumpy. However, your path to equity mutual fund investment can be more reliable and rewarding if the selected mutual fund is one of the best equity mutual fund scheme. Office Home & Student 2016 for Mac 5,999 Get it Office 365 University 4,199 Get it Home About Calculators Save Tax Invest Smart Insure & Relax Easy EPF
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12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
Best Mutual Fund ToInvest in India For 2016December 21, 2015 by Chandrakant Mishra — Add Comment
We want tosecure ourfuture. Wewant to
accumulate the wealth to fulfill our wishes. To achievethis goal, equity mutual funds are the best investment.But the path of equity mutual fund is slippery andbumpy.
However, your path to equity mutual fund investmentcan be more reliable and rewarding if the selectedmutual fund is one of the best equity mutual fundscheme.
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Office 365 University
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There are hundreds of equity mutual funds. All of themgoes through a different trajectory. Choosing theperfect scheme among them is not an easy task. Butthrough the defined criteria, we can get the names ofthe mutual fund scheme which are most trustworthy. Inthis post, I have picked the best mutual fundschemes for you.
Why the List of Best Mutual Fund
There is a lot of noise around mutual funds. Scores ofcompanies, many categories, hundreds of scheme,changing performances and differing views. There is alot of confusion. The vested interest of mutual funddistributors also complicates the mutual fund selection.Therefore, It is necessary to have a list of the bestmutual fund. This list of best mutual funds will help youin the following way.
It will introduce you only to the best mutual fundschemes. No more, wondering into the maze.
You would have a clear picture of the selectedmutual fund. You would know qualities of yourchosen scheme. It gives peace of mind andgreater trust.
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You can counter and ask questions to pryingdistributors.
You would have a mutual fund scheme whichmatches with your attitude and goal.
To meet above objective, I have to select the mutualfund schemes which should meet your expectationsand address your concerns.
The mutual fund should give a better return thanthe fixed deposit, gold or property.
It should give a greater return than average equitymutual fund.
It should not take the excessive risk on my money.
It should not test my heart. The swings should notbe wild. The downturn should be smaller than themarket.
If I need, It should also give the benefit of taxsaving.
A best mutual fund for a person can’t be the bestmutual fund for me or you. Each of us is special andneed the best and most suitable mutual fund scheme.Different people have different risk profile.
I may not prefer the high risk scheme whether I get ahigh return or moderate return. But, you can take highrisk for high return. One of my clients is satisfied withmoderately higher return than fixed deposit as he doesnot want to take the risk.
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
Also Read: Best Mutual Fund To Invest in India For2016
Thus, we need the best mutual fund for every class ofinvestor. There are plenty of mutual fund schemestherefore, we should not have the problem. Let uscategorize the people on the basis of risk profile.
Aggressive investor
This class of investors do not mind excessive risk orswinging rides for high return. These investors haveenough money to fulfill their needs. They want to playshare market to get high returns.
The investment in midcap, small cap and thematicmutual funds suits to their style. These funds areriskier, but have the potential to give higher returns. Ifyou are one of the aggressive investor, you canchoose best mutual fund scheme among midcap fundsand thematic funds.
This class of investor can take a high risk but not theexcessive risk. They do understand the roller coasterride of the share market.
The investment in large cap and Flexi cap/multicap mutual funds suits to them. These funds take thecalculated risk of share market and try to give aboveaverage return than Nifty or Sensex.
Moderate Investor
This class of investor want to cautiously tread into theshare market. They do not want to put all of theirmoney into the risky share market. They need somekind of safety ring as well.
The balanced mutual fund suits to their attitude. Thebalanced mutual fund invests in equity as well as fixedreturn investments. Therefore, It takes less risk thanpure equity mutual funds.
Conservative Investor
This class of investor prefer safety than returns.Greater return is welcome to them but not at the costof capital. This class of investor can’t see the erosionof their investment.
The debt mutual funds are best suited to this class ofinvestor. I will not cover the debt funds here as thispost is only about the best equity mutual fund for 2016.
Tax Saving Investor
This class of investor want to save tax through the
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
investment. The tax benefit from section 80C is theirmain objective. While a coservative tax saving investorcan take benefit of PPF, employee provident fund, andPostal schemes the aggressive investor can invest intax saving mutual fund, the ELSS.
In a modern highway, there are many lanes for thedifferent class of vehicles. You choose a laneaccording to the speed of your vehicles. Similarly, youchoose a mutual fund category on the basis of riskinvolved.
Note that profit from the equity mutual fund investmentis not subject to tax. Even a balanced mutual fundwhich has minimum 65% investment into the sharemarket is also free from long term capital gains.
How the Best Mutual Fund wasSelected
To select the best mutual fund to invest in 2016, I haveused different criteria. These criteria is applied one byone in the given order.
We choose a mutual fund scheme instead of directinvest into the share market because it gives servicesof a fund manager at a low cost. The fund manager isbacked by the systems and research foundation of amutual fund company. It is the fund managementcompany which chooses good fund manager anddevelops certain systems to choose the best stocks forinvestment. Therefore, Professional management ofmutual funs scheme is most important.
It is the fund management company which keeps theperformance of a mutual fund scheme consistentirrespective of fund manager’s departure. The fundmanager, investment philosophy and research areorganised by the fund management company. Hence,we should give greater weightage to the fundmanagement company. Globally there are somefamous fund management company which are knownfor its investment mechanism. E. g. Fidelity,Templeton, Vanguard.
In India as well, Franklin Templeton, HDFC AMC, ICICIPru, Axis MF, Birla Sun Life, DSP Blackrock, SBI MF,Kotak and UTI are known for their professionalmanagement. There are other big and small mutualfund companies, Which has some good performers aswell. But, Historically, thier schemes were not veryconsistent. We are not going to loose anything if skipthem.
Performance
The performance of a Mutual Fund scheme is realclincher. We need a good fund management company
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
to get the better return. But, no one can predict thefuture performance of a mutual fund scheme. Thus Wehave to look back the historical performance of mutualfund scheme. It gives an idea about the potential of ascheme.
To get a reliable signal we judge a mutual fundscheme on different time frame. I have taken one year,3 year and 5 year performance to choose the bestmutual fund to invest in 2016. My selected mutual fundshould earn above average return during these timeframes.
Risk
We can take risk for high return But it does not meanthat we can take risk blindly. The risk should beproportionate to the gain. Taking an excessive highrisk on a mutual fund scheme can give an extraordinary return but this behaviour can result in wipingoff the capital as well. Hence, the risk should be incontrolled manner. It would be better if our best mutualfund schemedo not take above average risk.
Thus, my list of the best mutual fund would includeonly those fund which take average or below averagerisk in its category.
Fund Manager
Fund Manager is the captain of the ship. Onlyhe/she can steer ahead the ship in turbulent times.The captain gives direction to the ship. The capablefund manager makes a mutual fund scheme the bestin its class. Sometimes, the change of fund manager
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
has adversely affected the performance of scheme.So, for a good mutual fund, the fund manager shouldcontinue. You can expect consistent performance if thefund manager is also consistent.
Portfolio
The fund manager invests your money in stocks andbond. You can also track this investment. Looking atthe portfolio, you can have an idea of the fundmanager’s philosophy. For the advanced mutual fundinvestor, the portfolio of the mutual fund scheme givesa clearer picture of future performance.
There are another parameters to choose the bestmutual fund. Such as expense ratio and star rating.The expense ratio is not significant as there are smalldifferences among top mutual funds. Choosing best onthe basis of this factor would not be a properjustification.
The star rating is given by the mutual fund houses.The fund houses also use the above given criteria torate a fund, therefore, it would be a duplication.
Using Above criteria, I have prepared a list of bestequity mutual funds for 2016. There are top 3 mutualfund schemes in every ccategory of equity mutualfund.
Top 3 Best Equity Large cap MutualFund
The large cap Equity Mutual fund has very large groupof mutual fund schemes. Every fund house has morethan one fund in this category. Despite many filters,competition is fierce.
Becasue of my preference for good fund house manylarge cap mutual fund schemes were weeded out inthe first filter. Among available large cap mutual fundschemes, I searched for those schemes which hasgiven above average return during 5 year, 3 year and1 year period.
I also selected only those fund which took belowaverage risk. These filter made my list very small but,still it was more than 3. Since I have to give only 3 toplarge cap mutual fund scheme I used another filter ofconsistent fund manager and portfolio. The list nowbecome smaller, but still, I have 4 funds in the fray.
SBI Bluechip fund and ICICI Pru Focussed bluchipseemed equally good for position 3. Again, I went
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
through the risk and return data. I compared theirreturn yearwise. After close monitoring SBI Bluechipscored over the ICICI Pru Focussed Bluechip. Below isthe final list.
Franklin India Prima Plus
This large cap Equity mutual fund is the black horse ofthe mutual fund industry. You can say it is dreamequity mutual fund. Despite taking below average riskIt has given high return on investment. The fund wasvery steady in its performance. It is one of the oldestmutual fund of India. It was launched in 1994.
You might have not found this fund in top performanceranking of previous year. Because it never took highrisk for quick gains. The result is before us, this fund is
Monthly SIP InvestmentsInvest as low as Rs 1000pm in Top SIPs in just 2mins.
The fund manager Anand Radhakrishnan is managingthis fund since 2007. The radhakrishnan has nurturedan investment team which is known for very goodresult. The fund always scout for value investment.
Indeed, I am fond of franklin templeton mutual fundAMC. It is well known fund house globally. It hasunique style of investing which gives greater return inlonger term. If you want to invest for long term, doinvest into Franklin India Prima Plus.
Read research reports of Valueresearch andMorningstar about this fund.
UTI Equity Fund
Life Franklin Prima Plus, the UTI equity Fund is alsoan old fund. It was launched in 1992. It has alwaysbeen the flagship mutual fund scheme of the UTI AMC.
The Fund manager Anoop Bhaskar has developed itsunique style of investing. He has chosen the growthoriented large cap stocks for long term. The fund hasvery low churn ratio. It is 14%.
The strategy of Anop Bhaskar has well paid. Since hecame into the helm of the fund, the UTI Equity Fundgave above average return every year. The Bhaskartook over the fund in 2007.
during last 5 years. The past performance of fundinvokes trust in this fund.
You can read more about the fund in the report ofMorningstar.
SBI Bluechip Fund
SBI Bluechip Fund has sprinted very fast in the last 4years. During this period, it took ‘below average risk’but delivered high return. In the last 4 year, it hasbeaten category average and benchmark consistently.
The 2008 and 2011 has been not very good for thefund. It took greater loss than category average.However, the new fund manager Sohini Andaniadopted different approach and It gave good results. Ihope, the smart performance will continue during thebad phase as well.
Top 3 Best Flexicap Mutual Fund
The Flexicap or multicap fund is also an equitydiversified fund. But it is not limited to the largecapshares. It can pick shares from the midcap space aswell. However, it is also tilted towards the large capshares. Because of the venturing into the midcapsector, this category of fund is little more risky, but ithas greater potential of high return. Let us see the bestflexicap equity mutual fund of India in 2016.
The UTI MNC fund is the star performer mutual fundscheme of the UTI basket. The fund mainly invest inquality multi national companies. It has selected multinational companies from large cap as well as midcapspace.
The fund hase been very cosistent. It took belowaverage risk but delivered high return. In the badphases, it does not slide as fast as the market but inthe boom period it rose more than the market.
It invests mainly into consumer non durable, auto, auto ancillary and pharma. The churn ratio of the UTIMNC fund is only 14%.
The fund is managed by the very able fund managerSwati Kulkarni. She is managing this fund since 2006.Swati believes in team work and it has paid well to herfunds. The fund gave average 17% return since Swatihas taken over this fund.
Read more about the UTI MNC Fund
Birla Sun Life India GenNext
It is a well know diversified fund. It also invest in
midcap shares. The Birla Sun Life Gen Next invests inthose shares which are going to benefit from thechanging trends and rising consumption.
It has given 18.5% annula return during last 3years. The 10 year average returns has been 16%.
The noteworthy thing of this fund is the risk avoidance.Despite low risk the fund has given above averagereturn.
The fund managers are the weak link of this fund. TheAnil Shah has joined this fund in 2013 while ChanchalKhandelwal has come some months back. Both ofthese fund manager have to prove there capability yet.
HDFC Capital Builder Fund Growth
This is one of the oldest fund of HDFC mutual fund. Itwas launched in 1994. Since the inception, this fundhas give 14.6% annual return. Last 3 years has beenvery good for the fund. It has given about 20% annualreturn during last 3 years.
The HDFC Capital Builder Fund has taken ‘belowaverage risk’ but it could give the ‘above average’return.
The fund manager Chirag Setalvad is managing thisfund since 2007. Miten Lathia and Rakesh vyas hasalso joined as the fund manager of this fund in 2012.
Top 3 Best Small and Midcap MutualFund
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
Birla Sun Life MNC Fund is 16 year old mutual fund.Crisil has put this fund in the rank 1 since last 6quarters. The fund invests in Midcap and Small capcompanies, still It has mitigated the associated risk ofsmall companies. The credit of this consistency goesto the stock selection.
The Birla Sun Life MNC Fund invests in multinationals. Because of the sound business model veryand low debt, multinational companies suffers less atthe time of recession. Therefore, the stock prices donot drop too much in the downturn. The Brla Sun LifeMNC fund gets benefit of this strategy.
The fund has always been a top ranker. In every timeperiod it has beaten the category average. During last10 years this fund has given average 20% return.Despite taking very low risk the fund has manged togive above average return.
The fund manager of this Mr Ajay Garg is managing itsince 2009. In his leadership the fund has alwaysperformed very good.
Franklin India Smaller CompaniesFund Growth
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
This is a relatively new fund from the FranklinTempleton fund house. It invests 75% of its fund intomid and small cap companies. The churn ratio of thefund is also very less.
It has consistently given above average return. In thelast 3 years. It has given 33% annual return. The Franklin India Smaller Companies Fund gave betterreturn than 95% of peers.
R Janakiraman has been the fund manager sinceFebruary 2008. He has worked with FranklinTempleton AMC as manager and as investmentmanager for Indian Syntans, The focussed approachof the Janakiraman has given better results.
SBI Small & Midcap Fund
This fund has given outstanding return during lastthree years. The return from fund was 37%. It is 12%greater than category average.
The Fund manager R Srinivasan is managing this fundsince 2013. In his guidance, the fund has gave returnof 110%. This return was 24% more than the categoryaverage.
Top 3 Best Equity Linked savingschemes
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
Axis Long Term Equity Growth is one of the best ELSSto invest in 2016. It was launched in 2009. After initialchange in fund manager, the Jinesh Gopani ismanaging this fund since 2011.
During last 3 years, the fund has given an outstandingperformance. Since the launch, it has also givenannual 20% return.
The value research online has given it the 5starrating. While Morningstar has given it the 5star rating.The ELSS took below average risk and gave a highreturn.
The existing investor can invest in this scheme online.While new investor has to submit the applicationoffline. After the first investment, the subsequentinvestment can be done online.
Birla Sun Life Tax Plan Growth
The Birla Sun Life Tax Plan is top tax saving fundamong best ELSS to invest in 2016. It is one of theoldest tax saving mutual fund launched in 1999. Sinceinception, it has given annual 20% return.
The existing investor of Birla Sunlife Mutual Fund caninvest in this fund through the online mode. To investonline in BSL Tax Plan, you need a folio number.
DSP BlackRock Tax Saver Fund
The fund came into the existence in 2007. Since theinception, it has given 14% return. It has assets of Rs1110 crore. The DSP Blackrock Tax Saver Fund hasinvested heavily on bank shares. About 10% of itsholding is of HDFC bank shares.
The fund is managed by the Rohit Singhania. He is anew mutual fund manager and managing DSPBlackrock Tax Saver fund since July 2015. The fundmanager is the weakest link of this fund. He has toprove yet.
The Value Research and Morningstar have given thisfund a 4star rating.
Top 3 Best Balanced Mutual Fund
The balanced Funds invest in shares as well as as inthe bonds. The investment in bonds gives it safetywhile equity gives an opportunity to get better return.Becuase of the equity investment, this category of fundis also volatile, but, less than the pure equity fund.Here, I am talking only about those fund which areequity oriented balanced fund. This type of fundinvests 2/3 of the fund into the shares. Let us see thelist of Best balanced fund.
It is a 15 year old fund. Among the balanced fund, Ithas always been the preferred fund. Since theinception it has given about 17% return. For abalanced fund, this return is quite good. During 3, 5,and 10 year period, it has given above average return.
The fund took average risk but gave high return. It hascertain preference for midcap and small cap shares.But it never compromises on quality. Hence, fund gavehigh return despite average risk.
Chirag Setalvad is managing this fund since 2007.
Franklin India Balanced Fund
This fund is a rival to the HDFC balanced fund. It hasstarted in the same year the 1999. Since the inception,this fund has given 14.7% return. During 3, 5, and 10year period, it has given above average return.
The fund took below average risk but gave aboveaverage return.
Anand Radhakrishnan and Sachin Padwal Desai ismanaging this fund since 2006.
ICICI Prudential Balanced Advantage
12/26/2015 Best Mutual Fund To Invest in India For 2016 - PlanMoneyTax
The fund is about 10 year old. It has not givenspectacular return during this period but it hasminimized its risk through hedging.
During last 5 years it has given 133% return. It is about4% above than the category average. Manish Banthiais managing this fund since 2009, whereas ManishGunwani is at helm since 2012.
The fund took below average risk but it gave aboveaverage return.
I have given 15 best equity mutual fund to invest. Icould have given you only five or 3 best equity mutualfund. But, it would have not very apt for many investor.Every person has different risk profile and needs.Hence, giving best mutual fund from every categorywas necessary.
Do you also hve something to say. Please feel free towrite into the comment box.
Last Updated: 21st December, 2015
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Chandrakant MishraI am the person behind this Blog.I started this blog just to shareuseful information. After gettingoverwhelming response this
pastime became my passion. Job with CNBCAwaaz also helped me to explore the world ofInvestment, Saving, Insurance, and Tax. Now I ama fulltime personal finance blogger. I am Also anExpert At AdviceAdda.com
