Selecting your best pick amongst top performing mutual funds is like choosing your life partner. As the health of your money subsequently revolves around your financial goals and the time frame of remaining invested, so you should consider a lot many factors before finalizing your best pick. Some of the factors such as Asset Under Management(AUM), your investment objective, an expense ratio of the fund, ranking by premier agencies such as CRISIL, outlook of the economy and continuity in performance determines the pace of your selection for the right mutual fund.
Is it wise to check the consistency in performance of mutual funds? Absolutely, yes! As the mutual fund rankings say a lot more about the better performer amongst other mutual funds. If you are not only dependent upon 1 -year returns but check for 3-years and 5-years returns, it will help you to ascertain whether the mutual fund is a fad or a consistent performer.There are many schemes with 4-star rating which deliver the highest return on 1-year criterion but delivered poor returns in 4-year and 5-years. So, these underperformers should be excluded from your list.
Here, the classification given is for 5 -star rated funds as the top performer in mutual funds segment:
Equity Funds
1 Year Return(%) 3 Year Return(%) 5 Year Return(%)
Mirae Asset India
Opportunities Fund-Regular Plan
(Large Cap) 35.59% 23.90% 18.06%
Birla Sunlife Equity Fun 43.40% 28.39% 19.89%
(Multi-Cap)
Mirae Asset Emerging Bluechip
Fund-Regular Plan 45.89% 37.85% 28.03%
(Mid-Cap)
DSP BlackRock Tax Saver Fund 38.47% 25.90% 19.26%
(Tax-Saver)
Franklin Build India Fund 39.50% 35.64% 24.32%
(Infrastructure)
Hybrid Funds
1 Year Return(%) 3 Year Return(%) 5 Year Return(%)
SBI Magnum
Balanced Fund
(Equity-Oriented) 18.44% 20.06% 17.17%
Birla Sun Life Monthly
Income Plan II-Wealth 22.98% 16.67% 13.11%
25 Plan(Debt-Oriented
Aggressive)
SBI Magnum Monthly 12.17% 12.44% 11.01%
Income Plan- Floater
Debt Funds
1 Year Return(%) 3 Year Return(%) 5 Year Return(%)
Birla Sun Life Treasury
Optimizer Fund -Regular Plan 11.69% 10.61% 10.22%
(Income Plan)
UTI Banking & PSU Debt Fund-
Regular Plan(Short-Term) 11.27% 9.68% Nil
Franklin India Ultra Short-Term
Bond Fund-Super Institutional
Plan (Ultra-Short Term Plan) 9.86% 9.80% 9.92%
Escorts Liquid Plan 7.87% 8.69% 9.20%
(Liquid plan)
Baroda Pioneer Credit Opportunities
Fund-Plan A (Credit Opportunities Plan) 11.75% Nil Nil
Quantum Dynamic Bond Fund
(Dynamic Bond Plan) 14.42% Nil Nil
Details about Assets Under Management and Expense Ratio
AUM(as on 31st January, 2017) Expense Ratio
Equity Funds
Mirae Asset India ₹ 2884.22 crore 2.35%
Opportunities Fund-Regular Plan
(Large Cap)
Birla Sunlife Equity Fund ₹ 3770.47 crore 2.28%
(Multi-Cap)
Mirae Asset Emerging Bluechip ₹ 3042.75 crore 2.37%
Fund-Regular Plan
(Mid-Cap)
DSP BlackRock Tax Saver Fund ₹ 1724.65 crore 2.56%
(Tax-Saver)
Franklin Build India Fund ₹ 754.12 crore 2.80%
(Infrastructure)
Hybrid Funds
SBI Magnum ₹ 8320.53 crore 1.99%
Balanced Fund
(Equity-Oriented)
Birla Sun Life Monthly
Income Plan II-Wealth ₹ 1539.61 crore 2.20%
25 Plan(Debt-Oriented
Aggressive)
SBI Magnum Monthly
Income Plan- Floater ₹ 186.62 crore 2.34%
Debt Funds
Birla Sun Life Treasury ₹ 8762.69 crore 0.65%
Optimizer Fund -Regular Plan
(Income Plan)
UTI Banking & PSU Debt Fund-
Regular Plan(Short-Term) ₹ 1914.93 crore 0.30%
Franklin India Ultra Short-Term
Bond Fund-Super Institutional
Plan (Ultra-Short Term Plan)
Escorts Liquid Plan
(Liquid plan) ₹ 187.28 crore 0.80%
Baroda Pioneer Credit Opportunitie ₹ 465.26 crore 1.93%
Fund-Plan A (Credit Opportunities Plan)
Quantum Dynamic Bond Fund ₹ 56.98 crore 0.65%
(Dynamic Bond Plan)
Assets under management and expense ratio are also necessary which determines the best pick for yourself. It is to be noted that assets under management give a clarity about the confidence level of the investors in the mutual fund scheme. This confidence is generated over a period of time. Moreover, the mutual fund houses position their best mutual fund managers for their flagship mutual fund schemes with higher AUM. Therefore, you shouldn't pick such mutual fund schemes on this parameter and so with the underperforming AUM in specified mutual fund sub-class. It will help you to drop the schemes in the market for some time and to witness completing their investment cycle for some period of time.
However, when it comes to the expense ratio of the scheme which helps you in ascertaining the returns from the scheme. The expense ratio generally eats into returns from the scheme. Ideally, expense ratio of upto 1.5% is considered satisfactory by the industry experts. Higher expense ratio may not have an impact on the better performing mutual fund schemes too much but will heavily hit when the fund starts performing badly. So you should consider your best pick wisely!
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