Top 10 Equity Mutual Funds to Invest in 2022

Equity Mutual funds are the most popular investment option in India today. It provides high returns and you can start investing with as little as Rs 500 per month.

Equity Mutual funds have simplified investing and are a great way to balance market volatility. But the biggest problem faced in mutual fund investing still remains – selecting the top 10 Equity Mutual funds.

top 10 equity mutual funds

It is almost impossible for an investor to select the best mutual funds from 2500+ equity mutual fund schemes.

To solve the problem of mutual fund scheme selection, RankMF has created India’s first and only technology-driven proprietary research and rating platform. This platform helps investors choose & invest in right mutual funds schemes to generate better returns and achieve their financial goals.

RankMF, with the help of technology & research experts, has made a proprietary research engine which evaluates more than 20 million fundamental and market data points such as:

  • Expense ratios
  • Standard deviation
  • Market valuations and multiples
  • Portfolio holdings and diversification 
  • Cash ratio of a fund
  • Size of the fund and many more…

This is done on an everyday basis to rate and ranks all mutual fund schemes in India.

Here are the top 10 equity funds based on RankMF Research:

 List of Best Performing Top 10 Equity Mutual Funds in India for 2022

*This is simply the list of top 10 equity mutual funds. This is not investment advice.

Fund Name Rank RankMF Rating Nav 1 Year 3 Years 5 Years Since Inception
Axis Esg Equity Fund Regular Growth 1 5 ₹ 16.96 53.62% 0.00% 0.00% 36.62%
Axis Focused 25 Fund Regular Growth 3 5 ₹ 48.16 59.73% 24.64% 18.89% 18.37%
Motilal Oswal Focused 25 Fund – Regular Growth 4 5 ₹ 34.38 41.32% 21.36% 14.36% 15.74%
Motilal Oswal S&p 500 Index Fund Regular Growth 5 5 ₹ 15.27 33.40% 0.00% 0.00% 32.98%
Dsp Focus Fund – Growth 6 5 ₹ 34.39 43.27% 19.25% 11.62% 11.47%
Icici Prudential Us Bluechip Equity Fund – Growth 7 5 ₹ 46.30 33.58% 19.94% 19.82% 17.91%
Axis Esg Equity Fund Regular Idcw Payout 8 5 ₹ 16.96 53.62% 0.00% 0.00% 36.62%
Axis Focused 25 Fund Regular Idcw Reinvestment 9 5 ₹ 24.97 59.75% 23.70% 18.36% 18.09%
Sbi Magnum Global Fund – Growth 10 5 ₹ 280.19 49.97% 21.28% 13.51% 14.98%
Dsp Quant Fund – Reg – Growth 11 5 ₹ 17.27 50.77% 0.00% 0.00% 25.93%

The above ranking is as of 30th May 2022. To check the latest ranking of all mutual funds- Click Here.

What are Equity Mutual Funds?

Equity mutual funds are the type of mutual funds that invests in equities or stocks of companies listed on the stock exchange.  

The Securities and Exchange Board of India (SEBI) defines equity mutual funds as, ‘funds that invest 65% of the corpus in equity shares of listed companies’.  Remaining 35% corpus is usually invested in debt instruments to minimise risk. 

equity mutual funds generate superior returns in the long term. Since equity funds predominantly invest in stocks, they are riskier than debt and hybrid funds.

Who should invest in Equity Mutual Funds?

Equity mutual funds are volatile and carry higher risk compared to other investment options. Hence, before investing in top 10 equity mutual funds you should consider the following: 

  • Equity mutual funds are suitable for investors with an investment horizon of at least five years or more. 
  • High-risk investors with a long term investment horizon should invest in equity mutual funds. 
  • Mutual fund beginners can invest in large cap mutual funds as these are relatively safer. Best large cap equity mutual funds invest in equity shares of well-established companies with a track record of offering stable returns in the long run.

Things to Consider Before Investing in Equity Mutual Funds

Here are some of the most important things to consider before investing in top 10 Equity Mutual Funds.

1. Investment Objective:

Before investing in Best top 10 equity mutual funds, you should do goal based financial planning. This will help you invest in line with your financial goals.

When you invest as per your financial goals, you stay invested for the long term. Also, you generate higher returns with the power of compounding.

2. Risk Profile

 There is a direct relationship between risk and return in mutual funds. High risk leads to higher returns. You should only invest in best equity mutual funds if it suits your risk profile.

For example: if you are a low-risk investor then you should avoid small cap funds. Similarly, if you are a high-risk investor then mid cap funds and small cap funds would suit you better.

3. Investment Horizon:

Investment horizon is the time for which you hold your assets to get maximum returns. You should always invest in line with your investment horizon.

  • Short-term goal = Short-term investment horizon
  • Long-term goal = Long-term investment horizon

For investing in the best equity mutual funds, you should have a long term investment horizon.

4. Fund Objectives:

Every mutual fund scheme has a fund objective based on which stocks are selected. Knowing the fund’s objective will help you make better investment decisions. Some mutual funds have defined goal such as growth fund or value fund. So, choose the one which is appropriate to you as per your goal.

5. Fund Types:

Equity funds are further divided into:

  • Large cap funds
  • Midcap funds
  • Small cap funds. 

Small cap and mid-cap funds are riskier than large cap funds. But small cap and midcap funds provide better risk adjusted returns in the long term. 

What are the advantages of investing in Equity Mutual Funds?

  • Lowest lock-in period: Equity mutual funds carry lowest lock-in period among other investment options like Fixed Deposit, PPF or NSC etc. Equity funds are highly liquid. Most equity funds have only a 12-month lock-in period. 
  • Expert managed: Best Equity Funds are managed and operated by expert fund managers. These expert fund managers make investment decisions on behalf of the unitholders. The aim of the fund managers is to generate superior returns. 
  • Superior returns: Best Equity Funds provide higher returns than other investment options like fixed deposit, savings account, NSC, PPF, and others.
  • Affordable: The best thing about Best Equity Funds is that investors can start an investment with as little as Rs 500. 

Which is the Best way to Invest in Equity Mutual Funds?

You can invest in Best Equity Mutual Funds in two ways:

  1. One-time lump sum investment: Lump sum investing is when the entire capital is invested at one go. One-time lump sum investment is ideal for seasoned investors who can time the market and invest at dips.  
  1. Systematic investment plan (SIP): In a SIP, a fixed amount is invested every month on a fixed date. SIPs are the best way to invest in the equity mutual funds as they help in cost-averaging. You also earn higher returns due to the power of compounding. Investors do not need to time the market when investing via SIPs. SIPs help in creating investment discipline. 

But there is a smarter way of investing in best equity mutual funds – SmartSIP. SmartSIP works on the principle of ‘buy low sell high’.  

SmartSIP works as per the mechanism of margin of safety index or MosDex.

At the times when markets are expensive, instead of buying the equity units at higher cost, liquid units are bought which leads to lower risk. 

Final Thoughts

When investing in Equity Mutual Funds, you should always access your risk profile and investment horizon.

 Once you understand your goals, you will be able to invest for the long term which will help you generate superior returns.

 RankMF’s list of top 10 Equity Mutual Funds is expertly curated based on more than 2 crore parameters!

 RankMF is India’s best mutual fund research and investment platform. It provides the most honest answer to “Kaunsa Mutual Fund Sahi Hai?”

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