Last Updated on Jul 30, 2024 by Anjali Chourasiya
Mutual funds are popular among individual investors for two reasons – diversification by investing in multiple stocks and professional management of funds. However, selecting the best mutual funds among a plethora of options can be tricky. To simplify this daunting task, we have listed the best mutual funds for the long term in 2023 based on various parameters. Read on to know more.
Table of Contents
What are the top 10 mutual funds with the highest returns?
| Name | Sub-Category | AUM (Rs. in cr.) | 3Y CAGR (%) | 5Y CAGR (%) | Expense Ratio (%) | Volatility (%) | Minimum Lumpsum (Rs.) | Absolute Returns – 1Y (%) | 3Y Avg Annual Rolling Return (%) |
| ICICI Pru Overnight Fund | Overnight Fund | 10,633.83 | 125.16 | 0.00 | 0.10 | 0.12 | 100.00 | 6.49 | 329.30 |
| Quant Small Cap Fund | Small Cap Fund | 8,075.14 | 47.73 | 30.94 | 0.77 | 14.69 | 5,000.00 | 42.07 | 65.36 |
| ICICI Pru Infrastructure Fund | Sectoral Fund – Infrastructure | 2,917.13 | 46.65 | 22.28 | 1.49 | 9.85 | 5,000.00 | 41.90 | 38.92 |
| Sundaram LT Micro Cap Tax Adv Fund-Sr VI | Equity Linked Savings Scheme (ELSS) | 38.41 | 45.69 | 20.85 | 1.16 | 10.85 | 0.00 | 31.37 | 44.45 |
| ICICI Pru Bharat 22 FOF | FoFs (Domestic) – Equity Oriented | 198.75 | 45.49 | 16.32 | 0.08 | 11.76 | 5,000.00 | 48.04 | 31.67 |
| Sundaram LT Tax Adv Fund-Sr III | Equity Linked Savings Scheme (ELSS) | 34.11 | 44.83 | 21.88 | 1.18 | 10.46 | 0.00 | 32.08 | 41.81 |
| Sundaram LT Tax Adv Fund-Sr IV | Equity Linked Savings Scheme (ELSS) | 21.66 | 44.66 | 21.68 | 1.18 | 10.38 | 0.00 | 32.33 | 40.69 |
| Quant Infrastructure Fund | Sectoral Fund – Infrastructure | 930.50 | 44.59 | 28.01 | 0.77 | 15.53 | 5,000.00 | 19.51 | 52.27 |
| HDFC Infrastructure Fund | Sectoral Fund – Infrastructure | 856.45 | 44.52 | 16.80 | 1.68 | 13.35 | 100.00 | 46.67 | 32.17 |
| SBI Magnum Children’s Benefit Fund-Investment Plan | Solution Oriented – Children’s Fund | 1,118.71 | 44.48 | 0.00 | 0.94 | 8.16 | 5,000.00 | 25.31 | 0.00 |
Note: The information is dated 1st October 2023. The parameters used to filter the top 10 mutual funds in India for 2023 across assets for the long term on the Tickertape Mutual Fund Screener are mentioned below.
- Plan: Growth
- 3-yr CAGR: Set from highest to lowest
Top 10 equity mutual funds in India for 2023
Also known as growth funds, equity funds invest majorly in stocks of companies. These funds can further be classified based on market capitalisation – large-cap, mid-cap, small- or micro-cap funds. Equity mutual funds are also classified based on the sectors that they invest in, which can be infrastructure, IT, and so on. Following is the list of the top 10 equity funds for long-term investment based on the 5-yr CAGR.
| Name | Sub-Category | AUM (Rs. in cr.) | 3Y CAGR (%) | 5Y CAGR (%) | Expense Ratio (%) | Volatility (%) | Minimum Lumpsum (Rs.) | Absolute Returns – 1Y (%) | 3Y Avg Annual Rolling Return (%) |
| Quant Small Cap Fund | Small Cap Fund | 8,075.14 | 47.73 | 30.94 | 0.77 | 14.69 | 5,000.00 | 42.07 | 65.36 |
| ICICI Pru Infrastructure Fund | Sectoral Fund – Infrastructure | 2,917.13 | 46.65 | 22.28 | 1.49 | 9.85 | 5,000.00 | 41.90 | 38.92 |
| Sundaram LT Micro Cap Tax Adv Fund-Sr VI | Equity Linked Savings Scheme (ELSS) | 38.41 | 45.69 | 20.85 | 1.16 | 10.85 | Not allowed | 31.37 | 44.45 |
| Sundaram LT Tax Adv Fund-Sr III | Equity Linked Savings Scheme (ELSS) | 34.11 | 44.83 | 21.88 | 1.18 | 10.46 | Not allowed | 32.08 | 41.81 |
| Sundaram LT Tax Adv Fund-Sr IV | Equity Linked Savings Scheme (ELSS) | 21.66 | 44.66 | 21.68 | 1.18 | 10.38 | Not allowed | 32.33 | 40.69 |
| Quant Infrastructure Fund | Sectoral Fund – Infrastructure | 930.50 | 44.59 | 28.01 | 0.77 | 15.53 | 5,000.00 | 19.51 | 52.27 |
| HDFC Infrastructure Fund | Sectoral Fund – Infrastructure | 856.45 | 44.52 | 16.80 | 1.68 | 13.35 | 100.00 | 46.67 | 32.17 |
| Sundaram LT Micro Cap Tax Adv Fund-Sr IV | Equity Linked Savings Scheme (ELSS) | 38.41 | 44.48 | 20.67 | 1.32 | 11.08 | Not allowed | 31.49 | 42.56 |
| Nippon India Small Cap Fund | Small Cap Fund | 36,539.55 | 44.17 | 26.64 | 0.72 | 11.16 | Not allowed | 38.98 | 45.87 |
| Sundaram LT Micro Cap Tax Adv Fund-Sr V | Equity Linked Savings Scheme (ELSS) | 30.87 | 43.94 | 20.23 | 1.19 | 10.81 | Not allowed | 29.72 | 43.04 |
Note: The information is dated 1st October 2023. The parameters used to filter the top 10 equity mutual funds in India for 2023 for the long term on the Tickertape Mutual Fund Screener are mentioned below.
- Category > Equity
- Plan: Growth
- 3-yr CAGR: Set from highest to lowest
Top 10 debt mutual funds in India for 2023
Debt funds invest in fixed-income instruments like corporate bonds, government bonds, corporate debt securities, and others. These are known for their low cost, relatively stable returns, and higher liquidity. Following is the list of the top 10 debt funds for the long term based on the 5-yr CAGR.
| Name | Sub-Category | AUM (Rs. in cr.) | 3Y CAGR (%) | 5Y CAGR (%) | Expense Ratio (%) | Volatility (%) | Minimum Lumpsum (Rs.) | Absolute Returns – 1Y (%) | 3Y Avg Annual Rolling Return (%) |
| ICICI Pru Overnight Fund | Overnight Fund | 10,633.83 | 125.16 | 0.00 | 0.10 | 0.12 | 100.00 | 6.49 | 329.30 |
| Bank of India Credit Risk Fund | Credit Risk Fund | 153.36 | 41.52 | -3.81 | 1.22 | 0.37 | 5,000.00 | 5.90 | 44.12 |
| Aditya Birla SL Medium Term Plan | Medium Duration Fund | 1,890.60 | 13.56 | 9.02 | 0.87 | 1.02 | 1,000.00 | 7.92 | 14.38 |
| Bank of India Short Term Income Fund | Short Duration Fund | 75.99 | 11.91 | 4.09 | 0.60 | 7.25 | 5,000.00 | 13.86 | 10.72 |
| UTI Credit Risk Fund | Credit Risk Fund | 413.70 | 11.50 | -0.62 | 0.86 | 0.71 | 500.00 | 7.76 | 6.16 |
| Baroda BNP Paribas Credit Risk Fund | Credit Risk Fund | 165.06 | 11.45 | 7.92 | 0.79 | 0.65 | 5,000.00 | 8.00 | 10.80 |
| Franklin India ST Income Plan | Short Duration Fund | 408.95 | 10.44 | 5.59 | 0.04 | 0.84 | Not allowed | 9.35 | 6.98 |
| UTI Dynamic Bond Fund | Dynamic Bond Fund | 467.72 | 9.90 | 6.57 | 0.70 | 0.92 | 500.00 | 6.94 | 9.97 |
| Nippon India Strategic Debt Fund | Medium Duration Fund | 126.42 | 9.81 | -0.33 | 1.38 | 1.52 | 5,000.00 | 7.77 | 4.73 |
| Nippon India Credit Risk Fund | Credit Risk Fund | 1,016.76 | 9.53 | 4.88 | 0.91 | 0.76 | 500.00 | 8.64 | 7.41 |
Note: The information is dated 1st October 2023. The parameters used to filter the top 10 debt mutual funds in India for 2023 for the long term on the Tickertape Mutual Fund Screener are mentioned below.
- Category > Debt
- Plan: Growth
- 3-yr CAGR: Set from highest to lowest
Top 10 hybrid mutual funds in India for 2023
Hybrid funds invest in more than one asset class – equity, debt, and others depending on the investment objective. These funds invest across asset classes to diversify the portfolio. Following is the list of the top 10 hybrid funds for the long term based on the 5-yr CAGR.
| Name | Sub-Category | AUM (Rs. in cr.) | 5Y CAGR (%) | 3Y CAGR (%) | Expense Ratio (%) | Volatility (%) | Minimum Lumpsum (Rs.) | Absolute Returns – 1Y (%) | 3Y Avg Annual Rolling Return (%) |
| Quant Multi Asset Fund | Multi Asset Allocation Fund | 936.86 | 23.24 | 29.21 | 0.67 | 9.39 | 5,000.00 | 15.55 | 35.97 |
| Quant Absolute Fund | Aggressive Hybrid Fund | 1,335.08 | 21.56 | 28.14 | 0.75 | 10.33 | 5,000.00 | 11.09 | 34.87 |
| Bank of India Mid & Small Cap Equity & Debt Fund | Aggressive Hybrid Fund | 462.92 | 18.69 | 28.15 | 1.55 | 9.38 | 5,000.00 | 28.11 | 29.96 |
| ICICI Pru Equity & Debt Fund | Aggressive Hybrid Fund | 24,990.09 | 17.93 | 31.58 | 1.12 | 6.99 | 5,000.00 | 25.11 | 27.43 |
| ICICI Pru Multi-Asset Fund | Multi Asset Allocation Fund | 21,705.11 | 17.27 | 29.80 | 1.01 | 5.91 | 5,000.00 | 24.68 | 26.25 |
| HDFC Balanced Advantage Fund | Balanced Advantage Fund | 60,640.94 | 16.76 | 30.84 | 0.84 | 7.02 | 100.00 | 28.49 | 25.12 |
| Kotak Equity Hybrid Fund | Aggressive Hybrid Fund | 4,049.59 | 16.54 | 23.25 | 0.47 | 6.47 | 100.00 | 17.85 | 23.32 |
| Baroda BNP Paribas Aggressive Hybrid Fund | Aggressive Hybrid Fund | 863.30 | 16.07 | 20.30 | 0.60 | 7.61 | 5,000.00 | 19.05 | 18.94 |
| Edelweiss Aggressive Hybrid Fund | Aggressive Hybrid Fund | 822.90 | 15.86 | 24.50 | 0.57 | 7.18 | 5,000.00 | 23.62 | 22.05 |
| DSP Equity & Bond Fund | Aggressive Hybrid Fund | 8,121.32 | 15.17 | 19.85 | 0.79 | 7.23 | 100.00 | 20.32 | 18.00 |
Note: The information is dated 1st October 2023. The parameters used to filter the top 10 hybrid mutual funds in India for 2023 for the long term on the Tickertape Mutual Fund Screener are mentioned below.
- Category > Hybrid
- Plan: Growth
- 5-yr CAGR: Set from highest to lowest
Best mutual funds for SIP
Investing in mutual funds can be done in two ways – lump sum or systematic investment plan (SIP). Mutual funds SIP allows you to invest a fixed amount systematically on a weekly, monthly or quarterly basis. Some mutual funds also allow you to increase the fixed amount of investment. Here’s a list of the top 10 mutual funds for SIP to invest in 2023.
Best tax-saving mutual funds
An Equity-Linked Savings Scheme (ELSS) is the only type of mutual fund that offers tax benefits. They are diversified equity funds. Section 80C of the Income Tax Act, 1961 allows you to claim a tax deduction on the amount that you invest in ELSS. The maximum deduction you can claim in this regard is Rs. 1,50,000 per year, subject to the overall permissible limit of the section. Here’s more about tax-saving mutual funds and a list of the top 10 ELSS mutual funds.
What are mutual funds?
Mutual funds pool money from several investors and invest in securities like stocks, bonds, debt instruments, and other assets. These are managed by professionals who allocate funds based on the investment objective, which can be long-term wealth creation, tax saving, etc.
What is a mutual fund NAV?
Mutual fund NAV (Net Asset Value) is the price per unit of the scheme. Similar to how you pay the stock price to buy one share, you pay the NAV to buy one unit of a mutual fund. However, the NAV doesn’t change throughout the trading hours like a stock price; it is calculated at the end of the day after taking into consideration the closing prices of all underlying assets. The NAV is also adjusted for the expenses involved in the management, administration, distribution, and other factors.
Types of mutual funds to invest
Based on the underlying assets, mutual funds are classified into various types – equity funds, debt funds, and hybrid funds being the broad ones. Selecting one of these depends on various factors like your investment objective, risk appetite, and return expectations.
How to select the top-performing mutual funds in India?
1. Consider the fund’s track record: Looking at its historic performance gives insights into how it has fared over the years, even when the markets were down.
2. Check the fund’s Alpha value: Alpha indicates whether the fund has generated returns in excess of a benchmark.
3. Check the expense ratio: Expressed in terms of a percentage of the fund’s returns, the expense ratio is the fee charged by the AMC to manage your investment.
4. Investment objective: Map a fund with the objectives of a mutual fund scheme to see if it is in line with your financial goals.
5. Performance of the fund manager: Your investments in a mutual fund are managed by the fund manager. As such, their expertise has a significant bearing on how the fund performs.
Documents required for mutual fund investment
Following are some documents required for mutual fund investment:
- Application form: You would need one form to open a mutual fund account and another if you want to opt for an SIP plan. In addition, you will be required to submit an ECS form if you are opting for an electronic transfer from your bank account. Some fund houses may also ask you to fill up other forms like a risk profile form.
- KYC compliance: You have to verify your PAN for the Know Your Customer (KYC) norms to invest in mutual funds. You can register yourself for KYC via CDSL Ventures Limited (CVL). If you are KYC-compliant, you are required to submit the KYC acknowledgement letter or copy. But if you are not, you need to furnish the following documents:
- KYC form
- Passport-sized photograph
- Identity proof: PAN with photograph, passport, Aadhaar, driving licence or voter ID
- Address proof: Aadhaar, passport, driving licence, voter ID card, registered lease, sale agreement of residence, ration card, flat maintenance bill, insurance copy, utility bills for the last three months.
Taxation on Mutual Funds as per the 2024 Budget
Tax on Equity Mutual Funds
Short-Term Capital Gains (STCG)
If you hold equity mutual funds for less than a year, the gains from these investments are classified as short-term capital gains. According to the new budget, these gains are now taxed at a rate of 20%, which has been increased from the previous rate of 15%.
Long-Term Capital Gains (LTCG)
For equity mutual funds held for more than a year, the gains are considered long-term capital gains. The key points to note under the new budget are:
- Tax-Free Limit: Gains up to Rs. 1.25 lakh in a financial year remain tax-free. This limit has been increased from the previous threshold of Rs. 1 lakh.
- Tax Rate: Any gains above Rs. 1.25 lakh are taxed at a flat rate of 12.5%. It was previously taxed at 10%.
- Indexation: It’s important to note that the benefit of indexation, which previously allowed investors to adjust the purchase price of their assets for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation is a method used to adjust the purchase price of an asset (like property or gold) for inflation over the years. This adjusted price is then used to calculate capital gains. Previously, long-term capital gains from selling property, gold, or other unlisted assets were taxed at 20%, but you could use indexation to reduce your taxable profit. The new rule simplifies the tax structure by setting a flat 12.5% tax rate for all long-term capital gains. However, it removes the indexation benefit.
Summary
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
Tax on Debt Funds
Short-Term Capital Gains (STCG)
If you sell your debt fund units within three years (36 months), the gains from these investments are considered short-term capital gains. According to the new budget, these gains will be taxed according to your income tax slab rate.
Long-Term Capital Gains (LTCG)
For debt funds held for over three years (36 months), the gains are categorized as long-term capital gains. The key points to note under the new budget are:
- Tax Rate: The tax rate for long-term capital gains on debt funds is now a flat 12.5%, regardless of the amount of gain.
- No Indexation Benefit
Summary
| Capital Gains Tax | Description |
| Short-Term Capital Gains (STCG) | If you sell your debt fund units within three years (36 months), the tax will be as per your income tax slab. |
| Long-Term Capital Gains (LTCG) | For debt funds held for over three years (36 months), the tax rate is now a flat 12.5% without indexation benefits. |
Tax on Hybrid Funds
Short-Term Capital Gains (STCG)
For hybrid mutual funds, the tax treatment of short-term capital gains depends on the asset allocation of the fund:
- Equity-Oriented Hybrid Funds (more than 65% in equity): If you sell units within one year, the gains are considered short-term and taxed at 20%.
- Debt-Oriented Hybrid Funds (less than 65% in equity): If you sell units within three years, the gains are considered short-term and taxed according to your income tax slab.
Long-Term Capital Gains (LTCG)
For hybrid mutual funds held beyond the specified holding periods, the tax treatment is as follows:
- Equity-Oriented Hybrid Funds (more than 65% in equity): Gains from units held for more than one year are considered long-term. These gains are taxed at a flat rate of 12.5%, with gains up to Rs. 1.25 lakh being tax-free.
- Debt-Oriented Hybrid Funds (less than 65% in equity): Gains from units held for more than three years are considered long-term and are now taxed at a flat rate of 12.5% without indexation benefits.
Summary
| Type of Fund | Short-Term Capital Gains (STCG) | Long-Term Capital Gains (LTCG) | Indexation Benefit |
| Equity-Oriented Hybrid Funds | 20% for holdings less than 1 year | 12.5% for holdings over 1 year, with gains up to Rs. 1.25 lakh tax-free | Not available |
| Debt-Oriented Hybrid Funds | Taxed as per income tax slab for holdings less than 3 years | 12.5% for holdings over 3 years | Not available |
Conclusion
Filtering the top-performing mutual funds in India can be a time-consuming process but not an impossible task. In fact, Tickertape Mutual Fund Screener is built with several filters to help you find mutual fund schemes suitable to your portfolio. Once you screen mutual funds, you can further evaluate them using Tickertape Mutual Fund Pages that host comprehensive information on the respective mutual fund, its manager, peers, and more.
Frequently Asked Questions (FAQs)
Why should I invest in top mutual funds?
Top mutual funds tend to offer attractive returns in the long run. However, you should research funds well before investing in them. Also, mutual funds can be top performers based on different parameters – rolling returns, CAGR returns, Alpha, and more. So research well and analyse them before investing.
How to invest in top mutual funds?
There are two ways of investing in mutual funds – either directly via the fund house’s website or by visiting their office, or via a distribution partner.
Do I need to have the market knowledge to invest in top mutual funds?
It is not mandatory to have the market knowledge to invest in mutual funds, but having a sound understanding helps you dodge avoidable risks. If you lack market knowledge, seeking financial advice before investing is paramount.
What are the different types of mutual funds?
There are various types of mutual funds, such as
- Equity Funds
- Debt Funds
- Hybrid Funds
- Growth Funds
- Capital Protection Funds
- Income Funds
- Money Market Funds
- Liquid Funds
- Tax-Saving Funds
- Fixed Maturity Funds
- Pension Funds
- Aggressive Growth Funds
As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!
