Best Equity Mutual funds for 2021
Equity mutual funds are the most popular mutual fund type in India. They help investors to indirectly participate in the stock market. Today, we will understand everything about equity mutual funds. We will also reveal the best equity mutual funds for 2021. In this article:- What are the best equity mutual funds?
- Who should invest in the best equity mutual funds?
- Why invest in equity mutual funds?
- Why should you not invest in equity mutual funds?
- List of the best equity mutual funds for 2021.
- What is the best way of investing in the best equity mutual funds for 2021?
What are Equity Mutual Funds?
Equity mutual funds are mutual fund schemes that invest a minimum of 65% of their corpus in direct equities or stocks. Equity mutual funds can be broadly classified based on the following parameters:- Management: Actively managed equity mutual funds (diversified mutual funds) and Passively managed equity mutual funds (index funds)
- Market capitalisation: Large-cap, mid-cap and small-cap equity mutual funds
- Investment Objective: Focused equity mutual funds, sectoral equity mutual funds, multi-cap equity mutual funds, fund of funds etc.
Who Should Invest in Best Equity Mutual Funds?
Equity funds reduce the overall risk through diversification. They generate high returns but also carry high market risk and volatility. Hence before you invest in the best equity mutual funds, you should ascertain your risk profile and time horizon.- If you are a conservative investor, or a beginner, with a short time horizon, then you should invest in large-cap mutual funds only.
- If you are an aggressive investor with a long time horizon, then you can invest in mid-cap, small-cap or sectoral funds.
- If you want to simply save tax, then ELSS is the best investment option for you.
- If you are confused and want to invest in both equity and debt, then balanced fund/aggressive hybrid funds are suitable for you.
Why Should you Invest in Equity Mutual Funds?
You should invest in equity funds because:- They have a proven track record of generating superior risk-adjusted returns in comparison to traditional investments like PPF, Bank fixed deposits, EPF, Insurance policies, Bonds, Debt Funds and even gold.
- Equity mutual funds are affordable as you can start investing with as little as Rs 500 per month.
- Equity mutual funds do not have a lock-in period unlike PPF, which is locked in for 15 years. Equity mutual funds can be redeemed anytime as per the daily NAVs.
- Equity mutual funds are highly liquid and the redemption proceeds are received within two transaction days.
- Equity mutual funds are extremely safe and all market participants are strictly regulated by SEBI (market regulator) to protect the investors.
- Actively managed equity funds are managed by professional fund managers, who are experts in the field of finance and hence you have a high chance of generating superior returns.
Why Should you Not Invest in Equity Mutual Funds?
- You should not invest in equity funds if you are scared of the market volatility. While equity mutual funds curb the fluctuations through diversification, they are still market linked funds and risky.
- You should not invest in equity funds if your risk profile is extremely conservative and your investment time horizon is short-term.
- You should not invest in equity mutual funds if you cannot hold the investment for a minimum of 5 years.
List of the Best Equity Mutual Funds in India for 2021
While most ‘so-called expert’ investing platforms evaluate mutual funds in India based on a handful of parameters such as past performance, fund manager, expense ratio etc, RankMF evaluates mutual funds based on more than 20 million parameters! And after careful screening based on these 20 million parameters, we have shortlisted the top performing equity mutual funds in India for 2021.Best Equity Mutual Funds in India for 2021
| Category | Schemes | MF Rating | 1 Yr** | 3 Yr** | 5 Yr** | AUM** | Expense Ratio** |
| Best Large Cap Funds | Axis Bluechip Fund | 5 Star | 20.92% | 15.50% | 16.59% | Rs. 22,517 Cr | 1.78% |
| UTI Mastershare Unit Scheme | 5 Star | 21.73% | 10.64% | 14.03% | Rs. 7,425 Cr | 1.97% | |
| Best Multi-Cap Funds | UTI Equity Fund | 5 Star | 34.07% | 16% | 17.03% | Rs. 14,861 Cr | 2.05% |
| Parag Parikh Long Term Equity Fund | 5 Star | 32.77% | 14.69% | 16.94% | Rs. 6,393 Cr | 1.97% | |
| Best Large & Mid Cap Funds | Tata Large and Mid Cap Fund | 5 Star | 17.76% | 8.43% | 12.82% | Rs. 1,934 Cr | 2.18% |
| Kotak Equity Opportunities Fund | 5 Star | 19.22% | 9.07% | 15.32% | Rs. 4,633 Cr | 1.96% | |
| Best Mid Cap Funds | DSP Mid Cap Fund | 5 Star | 25.98% | 7.67% | 15.86% | Rs. 9,823 Cr | 1.88% |
| Axis Mid Cap Fund | 5 Star | 28.09% | 14.27% | 16.49% | Rs. 8,515 Cr | 1.89% | |
| Best Small Cap Funds | Kotak Small Cap Fund | 5 Star | 34.87% | 6.55% | 15.29% | Rs. 2,372 Cr | 2.11% |
| Axis Small Cap Fund | 5 Star | 23.93% | 11.30% | 15.80% | Rs. 3,632 Cr | 2.03% | |
| Best Focused Funds | Axis Focused 25 Fund | 5 Star | 21.71% | 12.32% | 18.02% | Rs. 14,358 Cr | 1.83% |
| Motilal Focused 25 Fund | 5 Star | 20.81% | 10.63% | 14.15% | Rs. 1,548 Cr | 2.14% | |
| Best ELSS Funds | Axis Long Term Equity Fund | 5 Star | 21.11% | 12.55% | 15.62% | Rs. 27,181 Cr | 1.62% |
| Canara Robeco Equity Tax Saver Fund | 5 Star | 32.26% | 14.96% | 16.21% | Rs. 1,476 Cr | 2.23% | |
| Best Thematic Funds | Axis ESG Equity Fund* | 5 Star | - | - | - | Rs 1,959 Cr | 2.04% |
| DSP Quant Fund | 5 Star | 28.40% | - | - | Rs. 571 Cr | 1.3% |
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