Mutual funds are among the most popular financial instruments for building an investment portfolio. This tool pools money from many investors and uses it to invest in a diverse portfolio of stocks, bonds, and other securities. This diversification can reduce risk while offering potential returns. We will discuss the best mutual funds to invest in in 2024, along with essential tips on investing in them.
Here are some top mutual funds to invest in in 2024 based on their past performance, fund management, and growth potential. This is based on annualized returns for a monthly SIP of ₹10,000 for five years, meaning a total investment of 6 lakhs.
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Top Mutual Funds
Bandhan Infrastructure Fund
| Fund Size ₹ 1,592 Cr | NAV (₹)As of 1 Aug 24 66.06 | Min. investment (₹)500 | Expense Ratio 0.92% | 1 Yr Return 86.05% | Age 11 yrs 7 months |
This fund has delivered the highest returns among Sectoral-Infrastructure funds over the last 10 years, showcasing its return outperformance. For every unit of risk it takes, the fund produces 20% more returns, highlighting its favorable return-to-risk ratio. The fund’s exit load is 0.5% if redeemed within 30 days.
The top holdings in the portfolio include Kirloskar Brothers Ltd. at 5.69%, Larsen & Toubro Ltd. at 4.35%, Adani Ports and Special Economic Zone Ltd. at 4.04%, and Ahluwalia Contracts (India) Ltd. at 3.38%. The portfolio is heavily invested in the Capital Goods sector, which accounts for 22.51% of the total investment. This is followed closely by the Construction sector at 21.77%. The Services sector represents 9.85% of the portfolio, while the Energy sector comprises 9.84%.
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Invesco India PSU Equity Fund
| Fund Size₹ 1,363 Cr | NAV (₹)As of 1 Aug 24 82.35 | Min. investment (₹)500 | Expense Ratio 0.94% | 1 Yr Return 95.1% | Age 11 yrs 7 months |
This fund has achieved the highest returns among Thematic-PSU funds over the past 10 years, demonstrating its strong return outperformance. For every unit of risk it undertakes, the fund delivers 20% more returns, emphasizing its favorable return-to-risk ratio. Notably, it is also the oldest Thematic-PSU fund, underscoring its established presence in the market.
The portfolio’s top holdings feature Power Grid Corporation of India Ltd. at 8.64%, Hindustan Aeronautics Ltd. at 8.57%, Bharat Electronics Ltd. at 8.34%, and NTPC Ltd. at 7.61%. The investment is significantly concentrated in the Energy sector, which makes up 30.95% of the total holdings. The Capital Goods sector follows closely at 29.27%. The Financial sector accounts for 20.89% of the portfolio, while the Services sector represents 7.33%.
Nippon India Power & Infra Fund
| Fund Size ₹ 6,694 Cr | NAV (₹)As of 1 Aug 24 407.42 | Min. investment (₹)500 | Expense Ratio 1.12% | 1 Yr Return 75.83% | Age 11 yrs 7 months |
This fund has achieved the highest returns among Sectoral-Infrastructure funds over the past 5 years. It also offers a return-to-risk ratio, producing 20% more returns for each unit of risk it assumes.
The portfolio’s top holdings include Reliance Industries Ltd. at 7.48%, Larsen & Toubro Ltd. at 7.16%, NTPC Ltd. at 6.19%, and Kaynes Technology India Ltd. at 4.9%. The Capital Goods sector leads the investments, comprising 24.75% of the total holdings. The Energy sector follows at 22.1%, while the Construction sector makes up 14.71%. The Materials sector also holds a significant portion, accounting for 12.01% of the portfolio.
Nippon India Small Cap Fund
| Fund Size ₹ 56,469 Cr | NAV (₹)As of 1 Aug 24 199.07 | Min. investment (₹)500 | Expense Ratio 0.64% | 1 Yr Return 57.31% | Age 11 yrs 7 months |
This fund is highly regarded for its consistency, delivering reliable returns within its category. Over the past 10 years, it has achieved the highest returns among Small Cap funds. Additionally, it has provided a 16.86% annual return in 70% of instances for investors who held the fund for at least 5 years. The fund also offers an attractive return-to-risk ratio, generating 20% more returns for each unit of risk it assumes.
The portfolio’s top holdings include HDFC Bank Ltd. at 1.98%, Tube Investments Of India Ltd. at 1.89%, Kirloskar Brothers Ltd. at 1.65%, and Voltamp Transformers Ltd. at 1.55%. The Capital Goods sector dominates the portfolio, representing 20.94% of the total holdings. The Financial sector follows with 11.98%, while the Services sector accounts for 9.61%. Additionally, the Consumer Staples sector holds a significant portion, comprising 7.16% of the portfolio.
ICICI Prudential Infrastructure Fund
| Fund Size ₹ 5,703 Cr | NAV (₹)As of 1 Aug 24 213.38 | Min. investment (₹)500 | Expense Ratio 1.19% | 1 Yr Return 65.51% | Age 11 yrs 7 months |
Over the past 5 years, this fund has delivered the highest returns among Sectoral-Infrastructure funds. Additionally, it has achieved an 11.71% annual return 70% of the time for investors who held the fund for at least 5 years. The fund also offers a strong return-to-risk ratio, generating 20% more returns for each unit of risk it undertakes.
The portfolio’s top holdings feature NTPC Ltd. at 6.48%, Larsen & Toubro Ltd. at 5.66%, HDFC Bank Ltd. at 4.75%, and ICICI Bank Ltd. at 4.63%. In terms of sector allocation, energy leads at 22.28%, followed by the financial sector at 16.23%. The Construction sector represents 12.09% of the portfolio, while Materials account for 10.89%.
Invesco india PSU Equity Fund
| Fund Size ₹ 1,363 Cr | NAV (₹)As of 1 Aug 24 82.35 | Min. investment (₹)500 | Expense Ratio 0.94% | 1 Yr Return 95.1% | Age 11 yrs 7 months |
This fund has achieved remarkable return outperformance, generating the highest returns among Thematic-PSU funds over the past 10 years. In terms of return/risk, the fund excels by producing 20% more returns for every unit of risk it takes. Additionally, it stands out as the oldest Thematic-PSU fund in the market, highlighting its long-standing presence and experience.
The top holdings of the fund include Power Grid Corporation of India Ltd. at 8.64%, Hindustan Aeronautics Ltd. at 8.57%, Bharat Electronics Ltd. at 8.34%, and NTPC Ltd. at 7.61%. The fund’s sector allocation is predominantly in Energy, which constitutes 30.95% of the portfolio. This is followed by Capital Goods at 29.27%, Financial at 20.89%, and Services at 7.33%.
SBI PSU Fund
| Fund Size ₹ 3,695 Cr | NAV (₹)As of 1 Aug 24 38.3 | Min. investment (₹)500 | Expense Ratio 0.78% | 1 Yr CAGR Return 94.27% | Age 11 yrs 7 months |
This fund is the second oldest Thematic-PSU fund, reflecting its established history in the market. It also boasts the third lowest expense ratio among actively and passively managed Thematic-PSU funds, highlighting its cost-efficiency in managing investments.
The fund’s top holdings include the State Bank of India, with a significant allocation of 14.19%, followed by GAIL (India) Ltd. at 9.21%, Power Grid Corporation of India Ltd. at 8.99%, and NTPC Ltd. at 4.45%. In terms of sector allocation, the fund is heavily weighted towards Energy, which comprises 35.08% of its holdings. The Financial sector accounts for 21.75%, Insurance represents 9.62%, and Capital Goods makes up 9.20%.
DSP T.I.G.E.R. Fund
| Fund Size ₹ 5500.38 Cr | NAV (₹)As of 9 Oct 24 368.4 | Min. investment (₹)500 | Expense Ratio as of 31 Aug 0.89% | 1 Yr Return 63.58% | Age 11 years, 9 months |
The third oldest Sectoral-Infrastructure fund has provided 10.6% per annum returns, if held for at least five years, 70% of the time. The fund’s return-to-risk ratio has generated 20% more returns for every unit of risk taken. However, the fund has an exit load of 1% if units are redeemed within 12 months.
Invesco India Infrastructure Fund
| Fund Size ₹ 1,470 Cr | NAV (₹)As of 1 Aug 24 81.7 | Min. investment (₹)500 | Expense Ratio 0.79% | 1 Yr Return 79.96% | Age 11 yrs 7 months |
This Sectoral-Infrastructure fund has achieved a 13.96% annual return in 70% of cases for investors who have held it for at least five years. Additionally, the fund has experienced the highest growth in assets under management (AUM) within the Sectoral-Infrastructure category over the last 12 months. For every unit of risk undertaken, it delivers 20% more returns compared to its peers. Furthermore, the fund maintains the third-lowest expense ratio among both actively and passively managed Sectoral-Infrastructure funds.
The top holdings of this fund include Power Grid Corporation Of India Ltd. at 6.9%, Larsen & Toubro Ltd. at 4.85%, Jyoti CNC Automation Ltd. at 3.76%, and NTPC Ltd. at 3.34%. The fund’s sector allocation is heavily weighted towards Capital Goods, making up 37.9% of the portfolio. Energy accounts for 19.37%, followed by Construction at 9.06% and Healthcare at 6.54%.
Franklin Build India Fund
| Fund Size ₹ 2,738 Cr | NAV (₹)As of 1 Aug 24 167.56 | Min. investment (₹)500 | Expense Ratio 0.98% | 1 Yr Return 73.42% | Age 11 yrs 7 months |
This fund has delivered the highest return among Sectoral-Infrastructure funds over the past decade. It stands out not only for its impressive return but also for its efficient risk management. For every unit of risk taken, the fund produces 20% more returns, highlighting its strong performance relative to the level of risk involved.
The fund’s top holdings include Larsen & Toubro Ltd. at 8.75%, NTPC Ltd. at 5.43%, Reliance Industries Ltd. at 5.03%, and Kirloskar Oil Engines Ltd. at 4.8%. The fund’s sector allocation is dominated by Capital Goods, comprising 23.91% of the portfolio, followed by Energy at 19.87%, Construction at 15.69%, and Services at 10.15%.
How to Invest in Mutual Funds
Investing in good mutual funds is simple. Here are the steps to get started:
1. Determine Your Investment Goals: Identify your financial goals, risk tolerance, and investment horizon. This will help you choose the right type of mutual fund.
2. Choose the Right Mutual Fund: Based on your goals, select the best mutual funds to invest that align with your investment strategy. You can use reputable financial consulting services to get professional advice.
3. Complete KYC Process: To invest in MFs, you need to complete the Know Your Customer (KYC). This means submitting your identity and address proof.
4. Open an Investment Account: You can open an account with a mutual fund distributor, a bank, or directly with the fund house.
5. Start Investing: Decide if you want to invest a lump sum or by a Systematic Investment Plan (SIP). SIPs let you invest a certain fixed amount regularly, reducing the impact of market volatility.
6. Monitor Your Investments: Regularly review your mutual fund investment to make sure it aligns with your financial goals. Make adjustments as needed.
Additional Investment Options Apart from mutual funds, investors can explore other investment avenues like hedge funds and New Fund Offers (NFOs).
What are Hedge Funds?
These are alternative investments that use various strategies to earn active returns for their investors. They are typically available to accredited investors and involve higher risk compared to mutual funds. These instruments often use sophisticated investment techniques, including short selling, leverage, and derivatives.
Besides knowing what are hedge funds, it’s also crucial for an investors to know that they can invest in a wide range of assets, including stocks, bonds, commodities, currencies, and derivatives. They can also use leverage to amplify their returns, but this also increases risk. Some common hedge fund strategies include:
- Long/Short Equity: Investing in both rising (long) and falling (short) stocks.
- Market Neutral: Constructing a portfolio that is theoretically unaffected by overall market movements.
- Global Macro: Making bets on large-scale economic trends.
- Event-Driven: Investing in companies undergoing significant events (e.g., mergers, acquisitions).
- NFOs
New mutual fund schemes offered by fund houses exploring NFOs can be a good idea for investors investing in new and innovative strategies. However, it’s essential to research and understand the fund’s objectives and risks before investing.
Financial Consultants
For those new to investing or looking to optimize their investment strategy, seeking financial consulting services can be beneficial. Financial consultants can provide personalized advice based on your financial situation, goals, and risk tolerance. They can also assist in stock portfolio management, ensuring your investments are well-diversified and aligned with your objectives.
Conclusion
Investing in MFs can be a smart way to build wealth over time. By choosing the best mutual funds to invest in 2024, you can enhance your financial portfolio and work towards your financial goals. Remember to assess your risk tolerance, investment horizon, and financial target before making any investment decisions. Utilize the expertise of financial consultants, and regularly review and adjust your investments to stay on track.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
FAQ
How to invest in mutual funds?
To invest in mutual funds, determine your investment goals, choose the right fund, complete the KYC process, open an investment account, and start investing through a lump sum or SIP.
Which mutual fund is best to invest in?
The best mutual fund to invest in depends on your financial aim, risk tolerance, and investment horizon. Some top funds for 2024 include Axis Bluechip Fund, Mirae Asset Emerging Bluechip Fund, and SBI Small Cap Fund.
How to invest in direct mutual funds?
Direct mutual funds can be purchased directly from the fund house without involving intermediaries. This can be done through the fund house’s website/mobile app, or visiting their office.
I’m Archana R. Chettiar, an experienced content creator with
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