Top 5 equity funds to invest in 2020: Equity funds are mutual funds with their assets invested in Equity and Equity related instruments. The asset allocation is usually made across all market capitalizations including Large-cap, Mid-cap and Small-cap.
Several funds only invest in any one of the three market capitalizations. Equity funds are regulated to invest more than 65% in equity shares of companies and up to 35% of the assets can be invested in debt securities, money markets and other instruments.
Though the portfolios of the equity funds are diversified, these are one of the riskiest mutual funds with potentially high returns. There are two ways investors can invest in equity mutual funds: SIPs (Systematic Investment Plans) and Lumpsum investments.
There are a lot of mutual funds available in the Indian market offered by banks and other financial institutions. Mutual funds have become the ultimate choice of investment for investors in recent years to reach their financial goals such as children’s education and retirement.
If you are looking to invest in the best equity mutual funds, it can be overwhelming to go through the number of choices and their performance over the years.
Advantages for investing in equity funds include-
- Potentially high returns compared to other investment options, the percentage of annual return is often more than the inflation rate
- Diversified portfolios decrease the risk and improve consistency in performance
- Low lock-in period for most funds, this increased liquidity
- SIPs help save money through a disciplined investment structure
- Many mutual funds issue dividends to investors
- ELSS mutual funds save income tax for investors under section 80c of the Income Tax Act.
- Investors should use an income tax calculator to see how this will impact their tax returns.
Best equity mutual funds to invest in 2020, source: gulaq.com
The best equity mutual funds to invest in 2020
The image below represents the best equity mutual funds that have AUM (Assets Under Management) ranging from 3,000 Crore INR to 25,000 Crore INR. These funds have been consistently performing well with high annual returns. It is recommended that an investor checks these funds before investing. The funds belong to several types of asset allocation available in the Indian market.
Top 5 equity mutual funds, January 2020. Source: paisabazaar.com
Mirae Asset Emerging Bluechip Fund:
Mirae Asset Emerging Bluechip Fund is one of the best equity mutual funds in India. The fund majorly invests in large-cap and mid-cap funds. It is managed by Mr. Neelesh Surana and Mr. Ankt Jain. by Total Assets Under Management are INR 9,516 Crore. The fund’s 5 largest holdings are HDFC Bank Ltd (7%), ICICI Bank Ltd (5%), Reliance Industries (5%), Axis Bank Ltd (5%) and State Bank of India (4%). Compound Annual Growth Rate (CAGR) in the last 3 years is 17.38%. If you had invested 1 lac rupees in January 2017, you would have made a corpus of 1.62 Lac rupees by now.
Axis Long Term Equity Fund:
Axis Long Term Equity fund is an Equity-Linked Savings Scheme. This fund is most suited for investors who are looking to save tax as well as build wealth. The fund is managed by Mr. Jinesh Gopani. AUM of the fund is INR 21,473 Crore. Assets are allocated in both large-cap and mid-cap companies. The fund’s 5 largest holdings are Bajaj Finance Ltd (9%), Avenue Supermarts (8%), Kotak Mahindra Bank (8%), HDFC Bank Ltd (6%) and Tata Consultancy Services (6%). 3 years CAGR is at 18.07%, which means if you had invested 1 Lac rupees in January 2017, you would have made a corpus of 1.64 Lac rupees.
Mirae Asset Large Cap Fund:
The fund majorly invests in large-cap equity securities. It is managed by Gaurav Misra and Harshad Borawake. The total assets of the fund are INR 16,873 Crore. The fund’s 5 largest current holdings are HDFC Bank Ltd (10%), ICICI Bank Ltd (8%), Reliance Industries (8%), Infosys Ltd (5%) and Axis Bank Ltd (5%). Mirae Asset Large Cap Fund has a 3-year CAGR of 15.48%. If you had invested 1 Lac in January 2017, you would have made a lump sum of 1.54 Lac rupees.
SBI Small Cap Fund:
SBI Small Cap Fund has an AUM of INR 3,156 Crore. More than 65% of the assets are invested in equities if small-cap companies. The fund is managed by Mr. R. Srinivasn. % largest holdings of SBI small-cap fund are Hawkins Cookers LTD (5%), Hatsun Agro Products (4%), JK Cement Ltd (4%), Dixon Technologies (4%) and Relaxo Footwear (4%). The fund’s 3-year CAGR is at 16.34% which means if you had invested 1 Lac rupees in January 2017, you would have a corpus of 1.57 Lac rupees.
Axis Focused 25 Fund:
Axis Focused 25 Fund’s assets are allocated in the equities of a concentrated 25 companies. The total Assets are INR 9,110 Crore, managed by ME Jinesh Gopani. The 5 major holdings of this fund are Avenue Supermarts (8%), Bajaj Finance Ltd (8%), Kotak Mahindra Bank (7%), Bajaj Finserv Ltd (7%) and Tata Consultancy Services (6%). CAGR in the last 3 years is 19.5%, the highest of all 5 funds discussed. If you had invested 1 Lac in January 2017 you would have made a total fund of 1.7 Lac rupees.
Investing in mutual funds is subjected to market risks. Even the best equity mutual funds do not guarantee or assure returns, which makes it essential for an investor to select the consistent top-performing funds for his/her investments.