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Best Mutual Funds for 2023

Created on 02 Jan 2023

Wraps up in 7 Min

Read by 2.5k people

Updated on 03 Jan 2023

The mutual fund industry was valued at ₹40.38 lakh crore as of November 2022. This number is a result of the sector growing at a rate of 5 times over the last 10 years.

Indian mutual funds’ AUM saw a near 2x growth over the last 5 years, going from ₹22.79 lakh crore on November 2017 to ₹40.38 lakh crore on November 2022. While this is a commendable increase, keeping the Indian investment environment in mind, Deepak Parekh disagrees. The HDFC AMC Chairman, stated in a report with Business Standard that the MF market is “significantly underpenetrated”.

He substantiates his statement by further adding that 16% is also the ratio between Indian MF’s AUM and the Indian GDP. Compared to the global ratio of 74%, it indeed is an alarmingly low number.

This means that there is room for mutual funds to grow and thrive and, as they do, for regulations and competition to improve. Investors are only set in a position to gain from such developments.

Which reminds me, you are invested in mutual funds, too, right? If not, this article might just be the guide you need to find the top mutual funds.

Top Mutual Funds for 2023

Enough about the mutual fund industry and how it is performing. Let us get to the meat of the matter and get on with the list of the best mutual funds to invest in India, shall we?

HDFC Index S&P BSE Fund

The first fund is an index fund to make sure you follow the market. Yes, I know, everyone and their dog will tell you that your investments are meant to beat the market, not follow it. But the point of an index fund is to act as a cushion to your investments.

Also, your investments are meant to beat inflation on the regular. Market-beating investments are supposed to be the cherry on your “portfolio cake”.

So, if the rest of your investments are not… playing well, you can have some assurance that the part of your corpus with an index fund is at least getting you some money.

The fund is more suitable for people with a high risk appetite, as 100% of the fund is allocated in equity.

Here are some of the details of the fund:

AUM

₹4,214.10 Crore

1-year return

5.5%

3-year return

14.7%

5-year return

13.2%

Minimum SIP Value

₹100

Expense Ratio

0.20%

Mirae Asset NYSE FANG+ ETF

One of the most usual reason for investing is “fund a foreign trip”. So, we thought, why not take your portfolio there too?

NYSE FANG+ is an ETF, which means you do not invest in the fund in the same way as the rest of the funds in this list. You buy units of the fund like you would a share from the stock market. The investment from you and other investors are collected by the fund house (Mirae Asset in this case), and invested in a group of shares or an index.

For the unawares, FANG+ is the name given to a basket of tech companies, all of which are listed on the New York Stock Exchange. The FANG stands for Facebook (now Meta), Amazon, Neflix and Google. These four and other US-based tech companies are Mirae Asset’s target for investments.

While investing in US stocks is possible, there are still some speedbumps in the method to do so. Not to mention having to research companies and their performance is going to just add to the list of excuses that you would give to delay your investments. Which is why investing in the units of an AMC that can invest and manage the funds for you is a much better call.

Here are some of the details of the fund:

AUM

₹1,115 Crore

1-year return

-33.7%

3-year return

NA

5-year return

NA

Minimum SIP Value

NA

Expense Ratio

0.71%

Kotak Equity Opportunities Fund

The Equity Opportunities is a large and mid cap mutual fund by Kotak. The aim of the fund is to bring together the benefit of security from large cap companies and the ability to generate higher returns with mid cap companies.

SBI, Reliance Industries, Larsen and Toubro are some of the prominent companies that are included in the fund’s portfolio. So if you know these companies, like them, and would like to invest in them, but would like a little extra in terms of hand holding, this just might be the fund for you.

Here are some of the details of the fund:

AUM

₹11,662.47 Crore

1-year return

8.3%

3-year return

19.0%

5-year return

13.0%

Minimum SIP Value

₹1,000

Expense Ratio

0.59%

Parag Parikh Flexi Cap Fund

When it comes to flexi cap funds, Finology has an all time favourite, and it is the Parag Parikh Flexi Cap Fund. While the fund recently had a bit of a rough patch on account of the foreign investment limit placed on it, it has had a strong performance history.

Another feather in the fund’s cap is the geographical diversification that the fund has as a result of US stocks like Facebook, Amazon, Microsoft and others.

In case you were wondering what exactly the “foreign investment limit” is, securities regulator SEBI recently placed an upper limit of $7 billion for the entire mutual funds industry. As for individual fund houses, an upper limit of $1 billion was placed on foreign investments that the fund house could engage in. This $1 billion limit includes investment in ETFs.

Owing to the recent rules, the fund had to reduce its exposure to US stocks that resulted in its underperformance in the last year.

Here are some of the details of the fund:

AUM

₹28,546 Crore

1-year return

-6.3%

3-year return

22.5%

5-year return

16.3%

Minimum SIP Value

₹1,000

Expense Ratio

0.76%

Axis Small Cap Fund

Here comes the creme de la creme of a risky investor’s fund of choice. The biggest positive for this fund is the risk that it exposes it to by investing in companies like Uno Minda, Sansera Engineering and more. Yeah, I had not heard of these companies before either.

If “small cap” scares you, well listen here, you afforded yourself security with the funds mentioned above. Now it is time to get into the risky bits and try and take a taste of the spicy side of investing.

And to apply some salve to your fear, the fund does invest in companies like, Tata Elxsi, Fortis Healthcare, JK Cements and the likes.

Mil gayi santushti bade naam sunke?

Here are some of the details of the fund:

AUM

₹11,358.11 Crore

1-year return

4.1%

3-year return

27.7%

5-year return

18.3%

Minimum SIP Value

₹100

Expense Ratio

0.51%

Mirae Asset Tax Saver

Now here comes the interesting bit. The next three funds fall under the “tax saver” category. Sure, the ₹1.5 lakh tax deduction helps, however, there’s a secret reason why we believe that these funds have a special place on the list…

Discipline.

That’s right, an added benefit of investing in these funds is the fact that they come with a lock in period of three years. What this means is that unlike your other new year resolutions, you cannot fall off this habit before three years.

Also, each of your SIP is considered a unique investment and has a unique three year long lock-in period. Just in case you’re wondering, no there just is no way you can withdraw prematurely, so there is no premature withdrawal penalty either.

Another reason why this fund is an in-house preference is because the this ELSS is among the more adventurous ones. While most ELSS are pseudo large cap funds for the sake of security, Mirae Asset Tax Saver invests in mid and small cap companies too. As a result, there is an obvious reward that follows the increased risk.

Here are some of the details of the fund:

AUM

₹14,255.39

1-year return

1.3%

3-year return

19.7%

5-year return

14.5%

Minimum SIP Value

₹500

Expense Ratio

0.53%

Axis Long Term Equity Fund (Tax Saver)

If you noticed the pattern, the three tax savers mentioned in the list all belong to fund houses mentioned above. That is because these are fund houses that stick to their guts, and consistency is Finology’s middle name (it is not really, Finology’s middle name is “Ventures”).

The fund has a select few stocks that it consistently invests in, and the number of these is limited. So you don’t run the risk of your fund getting overdiversified.

Here are some of the details of the fund:

AUM

₹31,583.02 Crore

1-year return

-11.2%

3-year return

10.7%

5-year return

10.2%

Minimum SIP Value

₹500

Expense Ratio

0.77%

Parag Parikh Tax Saver

Meet the Parag Parikh family of fund’s cousin that stayed in the country. Think of Parag Parikh Tax Saver as Parag Parikh Flexi Cap, minus the US stocks.

The benefits are the same as all of the tax saver funds mentioned above, plus it can act as a balancing element for the Axis Long Term Equity Fund as Parag Parikh focuses more on the valuation of the assets it invests in, instead of just buying them because of their core business.

It also sets off the limitation of Parag Parikh Flexi Cap Fund, if paired with the Mirae Asset FANG+ ETF in case the foreign investment limit continues to harass the performance of the flexi cap fund.
Here are some of the details of the fund:

AUM

₹900.86

1-year return

6.6%

3-year return

24.0%

5-year return

23.6%

Minimum SIP Value

₹1,000

Expense Ratio

0.88%

The Bottom Line

So, while their is still a whole lot of MF playground left to explore, the Indian masses are not shying away from the game. After all, the monthly SIP collection has gone up to ₹13,306 crore for November 2022 from ₹11,005 crore for the same month last year. The total collection for the year till this month has also gone up from ₹77,978 crore to ₹1,00,581 crore.

So, while India is still ways away from being “Mutual Fund Central”, people are at least starting to believe Sachin Tendulkar and MS Dhoni when they say “Mutual Funds sahi hai”. If only they were paid on a commission basis, they would have a different sort of fund for themselves!

(SRT Sports Management and Aarka Sports, if you are reading this article and the line above gave you a “renegotiation point”, maybe set me up with a little something to kickstart my MF journey?)

Disclaimer: The funds mentioned in this article are not a recommendation by Finology and should not be construed as such. The funds are mentioned based purely on numerical factors and the process of selection should follow thorough research and professional advise.

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