7 Hand-Picked Best Mutual Fund SIPs to invest in 2020

With more than 5500 Mutual funds currently available in the market today, investors have both freedom and confusion to choose from the same. Before delving further, let us start with the basics of a mutual fund. 

Best Mutual Fund SIPs

What is a mutual fund and why as an investor should you go for it?

A mutual fund is a trust containing a common pool of money, taken from different investors to invest in stocks, bonds, securities, money market instruments, etc. Each mutual fund has a dedicated theme and goal of investment, managed by a Fund Manager. Whenever an investor puts money into buying a mutual fund, he gets certain units of the fund, which represent a portion of the fund holdings. Buying a mutual fund does not require you to have a Demat account. The gains or losses generated by such funds are distributed proportionately amongst individual investors, after deducting certain expenses and charges. 

The price of a mutual fund is referred to as the Net Asset Value(NAV), which does not fluctuate during market hours and is settled at the end of each day of trading. How many units you get is the amount you paid divided by the applicable NAV of the fund.

Grow your wealth in small steps through SIPs! Image Source: pixabay.com

A great option that mutual funds offer us is the ability to purchase these funds through a Systematic Investment Plan(SIP). This offers great advantages and allows to diversify this portfolio without investing too much. 

Rupee-Cost Averaging or Minimisation of market risks is its biggest benefit. If the markets are bearish, the NAV would below and you’ll get more units for the same amount. If the reverse happens, you will be allotted a lesser number of units. The risks are balanced out hence. Over a long period (3 to 5yrs), mutual fund performances far outshine the returns achieved from either a fixed deposit or a recurring one.

For every individual, the selection of the best mutual funds for SIP would differ according to their financial goals and investment tenure. Mutual funds are classified into many categories depending on the securities it has targeted, and the returns they seek. Mainly they are Equity, Debt or Hybrid Funds. Other categories include Money Market Funds(risk-free short term debt such as government T-bills), Sectoral or Thematic Funds(which invests in a particular theme or sector, like Energy, transport, construction, real estate, etc.), Index Funds, Exchange Traded Funds or ETF in short(it is a slightly different fund, which can be traded in the stock market), etc. 

The risk profile of an investor is highly relevant in choosing the best mutual funds for SIP.

For investors who want higher returns with a relatively large risk of losses, Equity-based funds can be recommended. It requires the fund manager to allocate at least 60% of the fund’s assets in equities and the rest in debt and money market instruments. These can be further classified into Large Cap, Mid Cap or Small Cap funds. As the name suggests, these funds invest in stocks and shares of companies having the respective market capitalization. 

Investors having a conservative mindset or less tolerance towards loss can go for Debt Mutual Funds. It invests its assets in fixed income securities like government bonds, treasury bills, corporate securities with high credit ratings, etc. They are also called Bond Funds or Fixed Income Funds. Lastly, for moderate investors, hybrid funds(invests in stocks and govt securities) can be recommended. 

Diversification of your investment portfolio is highly recommended to average out the market fluctuations and economic turbulences. You should try having a mix of different mutual funds in your kitty for the same reason. To help you out, here is a list of 7 hand-picked best mutual funds for SIP that you should look into:

Equity-Based :

  • Axis Bluechip Growth Fund

This fund is managed by Mr. Shreyas Devalkar, AMC is Axis AMC.
3-Yr returns are close to 7.46%

Risk Moderately High
Min SIP Amount ₹500
Expense Ratio 1.71%
NAV ₹28.51 (08 Apr 2020)
Fund Started 01 Jan 2013
Fund Size ₹11,824 Cr
  • Canara Robeco Bluechip Equity Fund Growth

This fund is managed by Mr. Sanjay Bembalkar and Mr. Shridatta Bhandwaldar. 

3-Yr returns are also good. 

Risk Moderately High
Min SIP Amount ₹1000
Expense Ratio 2.56%
NAV ₹23.65 (08 Apr 2020)
Fund Started 02 Jan 2013
Fund Size ₹353 Cr

Debt-Based:

  • Nippon India Gilt Securities Fund Growth

It has a 3-Yr return of around 8.81% 

Risk Moderate
Min SIP Amount ₹100
Expense Ratio 1.59%
NAV ₹27.97 (08 Apr 2020)
Fund Started 01 Jan 2013
Fund Size ₹1,135 Cr
  • Kotak Money Market Growth

The fund is managed by Mr. Deepak Agrarwal. 3-Yr Returns are around 7.41%

Risk Moderate
Min SIP Amount ₹100
Expense Ratio 0.26%
NAV ₹3305.15 (08 Apr 2020)
Fund Started 31 Dec 2012
Fund Size ₹10,442 Cr

Hybrid Funds:

  1. Indiabulls Saving Income Fund Growth

It has given a return of 7.87% in 3 years. 

Risk Moderate
Min SIP Amount ₹100
Expense Ratio 0.25%
NAV ₹14.23 (08 Apr 2020)
Fund Started 02 Dec 2015
Fund Size ₹26 Cr
  1. Edelweiss Arbitrage Fund Direct-Growth

Has had a return of 7.38% in 3 years’ time. 

Risk Moderately Low
Min SIP Amount ₹500
Expense Ratio 0.25%
NAV ₹15.13 (08 Apr 2020)
Fund Started 27 Jun 2014
Fund Size ₹3,955 Cr

Tax Saving Fund:

  1. Mirae Asset Tax Saver Fund Growth

This had a regular to good returns before the corona-hit economy began its downfall. 

Risk Moderately High
Min SIP Amount ₹500
Expense Ratio 0.63%
NAV ₹14.91 (08 Apr 2020)
Fund Started 28 Jun 2015
Fund Size ₹3,282 Cr

Technically speaking, the list of best mutual funds for SIP recommended above takes into consideration a variety of factors including the age of the fund, fund managers, popularity, returns over the years, assets under management, portfolio diversity, etc. There is no particular ranking in the list stated above.

For the best returns in a long term investment, the most important step is to create a timeline for your financial goal and invest your money wisely amongst the best mutual funds for SIP. Additionally diverse your wealth across different securities and fixed deposits for maximum returns.

This is Carmel, a full-time professional blogger. He also loves to write on trending ideas on various topics that prove useful to one’s personal and Business life.

Share This Post