Like most Indians, I am a Do It Yourself (DIY) investor in Mutual Funds. That does not mean I am a financial wizard or some investment expert.
Indeed, I am just a layperson like most of us with little or no knowledge about how to invest in share market stocks and financial market.
However, before investing I do some research online to find which Mutual Fund will fetch me the highest returns, risk level and past performance.
So, I refer to the list of top 10 direct Mutual Funds that have five star ratings from Value Research Online.
Topmost Direct Mutual Funds by Value Research
Here is the list of 15 Direct Mutual Funds with five star ratings from Value Research Online.
Large Cap Mutual Funds
Large Cap Mutual Funds primarily invest in stocks of companies that have large market capitalization. These companies are not severely affected by swings in the stock market.
1. Axis Bluechip Fund
- 1 Year Return: 8.77 percent
- 3 Year Return: 17.37 percent
- 5 Year Return: 15.28 percent
- Risk Grade: Low
- Return Grade: Above Average
2. ICICI Prudential Bluechip Fund
- 1 Year Return: 0.64 percent
- 3 Year Return: 18.23 percent
- 5 Year Return: 15.75 percent
- Risk Grade: Low
- Return Grade: High
3. ICICI Prudential Nifty Next 50 Index Fund
- 1 Year Return: -10.62 percent
- 3 Year Return: 15.98 percent
- 5 Year Return: 16.79 percent
- Risk Grade: High
- Return Grade: High
Midcap Mutual Funds
Midcap Mutual Funds invest in stocks of companies whose market capitalization ranges between Rs.5 billion and Rs.100 billion. These are growing companies and moreover, are financially stable.
4. Kotak Emerging Equity Scheme
- 1 Year Return: -9.87 percent
- 3 Year Return: 16.31 percent
- 5 Year Return: 22.52 percent
- Risk Grade: Below Average
- Return Grade: High
5. L & T Midcap Fund
- 1 Year Return: -12.93 percent
- 3 Year Return: 18.11 percent
- 5 Year Return: 22.78 percent
- Risk Grade: Below Average
- Return Grade: High
6. Canara Robeco Emerging Equities Fund
- 1 Year Return: -6.23 percent
- 3 Year Return: 19.97 percent
- 5 Year Return 25.81 percent
- Risk Grade: High
- Return Grade: High
Small Cap Mutual Funds
Small Cap Mutual Funds invest in stocks of companies whose market capitalization is Rs.5 billion or lower. These companies have tremendous potential to grow.
7. HDFC Small Cap Fund
- 1 Year Return: -11.07 percent
- 3 Year Return: 22.04 percent
- 5 Year Return: 19.41 percent
- Risk Grade: Below Average
- Return Grade: Above Average
8. L & T Emerging Businesses Fund
- 1 Year Return: -16.02 percent
- 3 Year Return: 21.74 percent
- 5 Year Return: Not Available
- Risk Grade: Below Average
- Return Grade: High
Multi Cap Mutual Funds
Multi Cap Mutual Funds invest in stocks of large, mid and small cap companies. Their portfolio includes stocks of several companies. They vary their stockholdings to ensure maximum returns for investors.
9. Aditya Birla Sun Life Equity Fund
- 1 Year Return: -3.79 percent
- 3 Year Return: 18.27 percent
- 5 Year Return: 18.56 percent
- Risk Grade: Below Average
- Return Grade: High
10. Mirae Asset India Equity Fund
- 1 Year Return: 1.65 percent
- 3 Year Return: 19.79 percent
- 5 Year Return: 18.46 percent
- Risk Grade: Below Average
- Return Grade: High
ELSS Mutual Funds
ELSS stands for Equity Linked Savings Schemes. ELSS Mutual Funds allow you to save on Income Tax. And sometimes, they come with a three-year lock in period.
11. Aditya Birla Sun Life Tax Relief 96
- 1 Year Return: -3.14 percent
- 3 Year Return: 16.23 percent
- 5 Year Return: 18.63 percent
- Risk Grade: Below Average
- Return Grade: High
12. Mirae Asset Tax Saver Fund
- 1 Year Return: 0.42 percent
- 3 Year Return: 23.33 percent
- 5 Year Return: Not Available
- Risk Grade: Low
- Return Grade: Above Average
13. Motilal Oswal Long Term Equity Fund
- 1 Year Return: -9.64 percent
- 3 Year Return: 18.19 percent
- 5 Year Return: Not Available
- Risk Grade: Low
- Return Grade: High
Hybrid Mutual Funds
Hybrid Mutual Funds invest in equities or stocks of companies, debt instruments, government bonds and other money papers.
In addition, They do not depend upon one source of income only.
14. Edelweiss Arbitage Fund
- 1 Year Return: 6.07 percent
- 3 Year Return: 6.28 percent
- 5 Year Return: Not Available
- Risk Grade: Low
- Return Grade: Above Average
Liquid Mutual Funds
Liquid Mutual Funds invest primarily in the money market. Their portfolio consists of debts, government bonds and money market instruments.
15. Axis Liquid Fund
- 1 Year Return: 7.54 percent
- 3 Year Return: 7.24 percent
- 5 Year Return: 7.79 percent
- Risk Grade: Not Available
- Return Grade: HIgh
Why Refer to Value Research Online?
At the onset, I say that I have scant knowledge of stocks and money markets. This can make selection of a great Mutual Fund very difficult for an investor similarly like me.
However, Value Research Online has a full team of stock and money market experts (Rakesh Jhunjhunwala), financial and industry analysts and investment advisors.
This team studies assesses each Mutual Fund carefully. They study the portfolio of the Mutual Fund, look into credentials of the Mutual Funds manager and history of the Asset Management Company (AMC) or Fund House.
They also track and analyze the performance of every Mutual Fund beginning from its New Fund Offer (NFO’s) to the last few years.
Five Star ratings to Mutual Funds are given only when the team at Value Research is fully satisfied with its performance. When they are confident that a Mutual Fund will perform well in future and investors will get great returns for their money.
Hence, I prefer Value Research Online before investing in any Mutual Fund. And I opt for Direct Mutual Funds for reasons I list below.
Refer: Best Trading Apps to Invest in Stocks and Mutual Funds
Understanding Mutual Fund Investment
Value Research Online also ranks Mutual Funds on the basis of how people invest. Broadly speaking, there are six ways to invest in Mutual Funds.
Subscribe to New Fund Offers: NFOs is the starting of a Mutual Fund. During NFOs, you can buy one unit of the Mutual Fund for Rs.10 or higher, depending upon its class and AMC.
Direct Plan- Growth: Personally, I use this mode of investing in any good Mutual Fund. Direct Plan- Growth means you invest directly with the AMC, without any broker. You do not get dividend: instead, the dividend gets reinvested in the Mutual Fund and your asset grows.
Direct Plan- Dividend: Here, you opt to get the dividend from your Mutual Fund, if the AMC declares any. This dividend is credited to your bank account registered with the AMC.
Regular Plan- Growth: A Regular plan means you are investing in Mutual Funds through a broker or financial advisor such as your bank. The broker or advisor gets a commission on your investment and dividends. However, your dividend gets reinvested into the same Mutual Fund and grows your holdings.
Regular Plan: Dividend: In this system, you invest through a broker or financial advisor who gets a commission. Both, the broker and you get dividend when an AMC declares any.
Exchange Traded Funds (ETFs): Exchange Traded Funds are traded daily on the various stock markets in India and sometimes abroad. Hence, their value can rise or drop daily. These funds can be bought and traded only through a stockbroker. So, You need a trading and Dematerialized account to buy and sell ETFs.
Advantage of Value Research Online
I buy direct Mutual Funds online from the AMC website. All my Mutual Fund investments are in the Direct Plan-Growth category. Here, Value Research Online helps me in the following ways.
Direct Plan-Growth Mutual Funds cost more than other modes of investments. For some Mutual Funds, the difference can be as high as 40 percent to 60 percent, depending upon the AMC. Value Research Online rating system helps me know whether paying more for the top 10 Direct Mutual Funds is worth my money.
Mutual Funds are subject to stock market and money market risks. Everyone knows this fact. Hence, their prices can nosedive steeply. Value Research Online lists performance of its top 10 direct Mutual Funds over periods such as one year, three years and five years. This listing clearly shows Mutual Funds that are capable of sailing through stocks and money market downturns without much negative impact.
Risk Grade: This is an amazing feature you will find about top 10 direct Mutual Funds with five star ratings by Value Research Online. Risk grade clearly shows whether your investment is at low, medium, moderate or high risk. Generally, a good DIY investor will have a mix of Mutual Funds of all risk levels to ensure highest returns. Reading the risk grade from Value Research Online, helps me build a great Mutual Funds portfolio by balancing threats to my investments that can arise from unstable stocks and financial markets.
Returns Grade is something every DIY investor should look at. Value Research Online provides this data too. In simple terms, Returns Grade means the increase in value of our Mutual Funds Value Research Online classifies returns as Above Average and High for its top 10 direct Mutual Funds with five star ratings. This makes it easier to select the best investment options.
Five Star Ratings by Value Research Online are purely based on performance over the last few years, a portfolio of a Mutual Fund and returns to investors. CRISIL, an S&P company, ratings can confuse any DIY investor since it bases them on other parameters.
Wrap Up
The top 10 direct Mutual Funds with five star ratings by Value Research Online and our guide on investments can help you fetch great returns on investments.
It is worth remembering that every Mutual Fund is subject to risks in the stock and money markets. Hence, the list of these Mutual Funds and their star-ratings can change anytime.
Therefore, it is best to refer to the latest list of top direct Mutual Funds on Value Research Online website.
