Top Mutual Funds in India for Long-Term Growth (2024)

Still, wondering if you should put some money away in mutual funds or not? The March 2021 market crash may have kept some of you on the fence about investing. But in the long run all fluctuations even out. 

All market gurus have always mentioned that time in the market is more important than timing the market.  There is no wrong or right time to invest in some of the best mutual funds in India. The right time is whenever you want to invest.

Markets never indicate bouncing back! Those who continued their investments bear fruits in the long term.

Hence pick any moment as an opportunity for your long-term financial planning and stay ahead of others.

Disclaimer: Here we have filtered the top five best mutual funds to invest for you who have returned the most in the past three years. Please note this is solely for information purposes and not a recommendation. Returns should not be the only or the main parameter to invest in a mutual fund. Please do the due diligence in research and pick mutual funds and asset classes that suit your investment profile. The list was last updated on February 4.

Best Mutual Funds 2021

Equity Funds

Equity funds are mutual funds that are mandated to invest maximum money in stocks of different companies. They derive their name and categorisation depending on the kind of stocks they are investing in. For example, large-cap funds invest in stocks of large-cap companies.

Here are some of the best lump sum investment plan for equity fund category:

Large Cap Funds

Large-cap funds invest some of the largest companies by market capitalization.

• Axis Bluechip Fund
• Canara Robeco Bluechip Equity Fund
• BNP Paribas Large Cap Fund
• Edelweiss Large Cap Fund
• LIC MF Large Cap Fund

Mid Cap Funds

• Axis Midcap Fund
• PGIM India Midcap Opportunities Fund
• Invesco India Midcap Fund
• Quant Midcap Fund
• Kotak Emerging Equity Fund

Small-Cap Funds

• Axis Smallcap Fund
• Quant Smallcap Fund
• Kotak Smallcap Fund
• SBI Smallcap Fund
• Union Smallcap Fund

Multi-Cap Fund

Multi cap funds are mandated to invest 25% each in small-, mid- and large-cap funds.

• UTI Equity Fund
• Quant Active Fund
• Canara Robeco Equity Diversified Fund
• Mahindra Manulife Multi-Cap
• ICICI Prudential Multi-Cap Fund

ELSS Funds

Equity-linked saving schemes (ELSS) provide tax relief under section 80 C.

• Quant Tax Plan
• Canara Robeco Equity Tax Saver
• Mirae Asset Tax Saver Fund
• Axis Long Term Equity Direct Plan
• JM Tax Gain Plan

Debt Funds

Debt funds invest in bonds and money market instruments of companies. There are up to 15 sub-categories under debt funds. Here are some of the best mutual fund for lumpsum investment under the debt fund category:

Top Liquid Funds

Liquid funds invest in securities with maturity up to 91 days.

• ICICI Prudential Liquid Fund
• Quant Liquid Direct Plan
• Franklin India Liquid Fund
• Aditya Birla Sun Life Liquid Fund
• Union Dynamic Bond Fund

Top Banking and PSU Debt Funds

These funds lend to banking and public sector undertakings.

• Edelweiss Banking and PSU Debt Fund
• IDFC Banking and PSU Debt Fund
• Nippon India Banking and PSU Debt Fund
• Kotak Banking and PSU Debt Fund
• SBI Banking and PSU Debt Fund

Top Corporate Funds

These funds buy debt securities of companies.

• L&T Triple Ace Fund
• HDFC Corporate Bond Fund
• Aditya Birla Sun Life Corporate Bond Fund
• Sundaram Corporate Bond Fund
• Axis Corporate Debt Fund

Ultra Short Term Funds

Ultra short term funds invest in securities with maturity between 3 to 6 months.

• PGIM India Ultra Short Term Fund
• ICICI Prudential Ultra Short Term Fund
• DSP Low Duration Fund
• Aditya Birla Sun Life Savings Fund
• Mahindra Manulife Low Duration Fund

Hybrid Funds

Hybrid funds are a combination of equity and debt investments.

Arbitrage Hybrid Fund

These funds use the arbitrage technique to invest. Arbitrage is a strategy that aims to take advantage of price differences.

• Mahindra Manulife Equity Savings Dhan Sanchay Yojana
• Nippon India Arbitrage Fund
• Edelweiss Arbitrage Fund
• BNP Paribas Arbitrage Opportunities Fund
• L&T Arbitrage Opportunities Fund

Balanced Advantage Fund

These funds have the advantage to invest across equity and debt without restrictions.

• Edelweiss Balanced Advantage Fund
• Union Balanced Advantage Fund
• ICICI Prudential Balanced Advantage Fund
• Aditya Birla Sun Life Balanced Advantage Fund
• IDFC Dynamic Equity Fund

Aggressive Hybrid Fund

Aggressive hybrid funds invest more in equity instruments than debt.

• Quant Absolute Fund
• BNP Paribas Substantial Equity Hybrid Fund
• Canara Robeco Equit Hybrid Fund
• Mirae Asset Hybrid Equity Fund
• DSP Equity and Bond Fund

Conservative Hybrid Fund

Conservative hybrid funds invest more in debt instruments than equity.

• Baroda Pioneer Conservative Hybrid Fund
• Canara Robeco Conservative Hybrid Fund
• Kotak Debt Hybrid Fund
• ICICI Prudential Regular Savings Fund
• BNP Paribas Conservative Hybrid Fund

Other Funds

Gold Funds

• Kotak Gold Fund
• Axis Gold Plan
• DSP World Gold Fund
• Invesco India Gold Fund
• Aditya Birla Sun Life Gold Direct Fund

Final Words

These may be some of the best performing mutual funds based on highest returns; however, returns should not be considered as the only criteria. When selecting mutual funds, fund manager and AMC history, asset class, category of fund, goals, other financial metrics and performance of peer funds are also required to be ascertained. Research, understand your requirements and begin your mutual fund journey.

Happy Investing!