Top 5 mutual funds in India for 2022

Mutual funds are, without a doubt, an investment opportunity if you want to play safe and want to have a diversified portfolio. While choosing a mutual fund to invest in is easier compared to picking a stock out of thousands of listed companies, it still is a tedious job to select one that fulfils all your financial goals. 

Without dragging the premise of why mutual funds are good for your financial health, let us jump right into the delicacies of investing right. 

Your risk-taking capacity for Mutual Fund

First, it is essential to find out your risk-taking capacity because when out in a jungle, you have to know the hurdles that you might face, or else, how are you going to prepare your weapons for it?  

Let us begin with finding out your risk appetite with Recipe’s help first. Follow the steps simultaneously as you go along reading this article. 

Step 1 - Sign in at Recipe by Finology, and the dashboard will appear.

Step 2 - Click on Financial Appetite.

Step 3 - There are a few easy questions that will take not more than a minute to answer. 

Finally click on 'Know my Appetite'.

And ta-daaaa! You will get your financial appetite along with the chef’s recommendations.

Now that you know exactly how much money should be invested in mutual funds, we take your hand and walk with you in the next part of investing. 

Below is the list of top mutual funds for 2022. 

Top Indian Mutual Funds for SIP in 2022

Our in-house research team, Recipe (yes, the one who helped you with finding out your risk appetite), has dug out some mutual funds that will be a safe bet for the coming years and encompass pretty much all the criteria that make a particular mutual fund a good fit for you to own.

Let’s begin, then. 

1. Mirae Asset NYSE FANG + ETF

This category of mutual funds is first on our list. Mirae Asset NYSE FANG + ETF is a Global Fund, and we will tell you why it is here. The world has turned digital and there is no doubt about it. But with Covid's advent, the pace at which the world was supposed to transition was replaced by a much faster adaptable pace. Now if the whole world is dependent on technology, wouldn’t the technology companies benefit from it?

Amazon, Google, Microsoft, Apple - are all American companies with a definite horoscope of growth. Isn’t it fair that we Indians, get to invest in them too?

The best way to do this is to choose a passive fund so that we invest in the technology index of that country. This is why we choose Mirae Asset NYSE FANG + ETF. This fund invests in the US’s 10 biggest tech and consumer discretionary companies.

2. HDFC Index Fund Sensex Plan

This is a large-cap fund. HDFC Index Fund Sensex Plan has been consistent with its performance. When compared to an active fund, you will get approximately half a percent more returns since the expense ratio of this passive fund is less than an active fund by the said margin. But there might be a little voice in your head asking you to take more risk and beat the returns of an index fund. Then, the next category is for you. 

3. Kotak Equity Opportunities Fund

This is a large and midcap fund. After reclassification, the category of midcap has narrowed further down from 101st companies to 250th companies based on market cap. In these 150 companies, there are only 30 or 40 midcap mutual funds. So instead, why not choose a mix of large and midcap?

To suit this, we found Kotak Equity Opportunities Fund to be the best mix of the safety of a large-cap fund with a little enhanced risk of a mid-cap fund. This fund is reasonable with respect to its valuation with good diversification. 

4. Parag Parikh Flexi Cap Fund

What was called multi-cap till last year, is called Flexi-cap fund and our next pick belongs to this category. The Parag Parikh Flexi Cap Fund mutual fund has been the champion of our fund list for a really long time. This fund also gives you a bit of global exposure as around 30% of its funds are allocated to global stocks. Their expense ratio used to be a bit high. But as their AUM (asset under management) has increased, their expense ratio has also become reasonable.

The execution and returns have been very good in the past year so this becomes our obvious choice. An important point though, other than existing SIPs, Parag Parikh Flexi Cap Fund has closed its subscription from the 1st of Feb, 2022 to avoid breaching the overseas investment limit set by RBI.

5. Axis Small Cap Fund

This mutual fund belongs to the small-cap category. Thus, is riskier than all of the above-mentioned mutual funds and it is for people with a very high-risk appetite. The stock selection of this fund is very good and the expense ratio for an actively managed, the small-cap fund is very less compared to peers.

 The Bottom Line

We would like to reiterate that every person has a different appetite for risk and their lock-in period differs. While we consider these mutual funds a good fit, it is very much advisable that you study systematically and do your own research as well. 

Until then, happy investing! 

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Insider by Finology and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.