Should You Invest in Multiple Equity Mutual Funds?
Last Updated : Aug. 22, 2019, 5:42 p.m.
Investing in equity mutual funds remains the go-to-thing for many aggressive investors who get fascinated by the ability of stocks, where the money is mostly centered on, to multiply the investment value over time. The bullish sentiment, if sustained for long, can bring smiles galore on the faces of investors. The reasons for such happiness is their chances to achieve the goal in the time they want to achieve get a huge lift. But as markets tend to be volatile, you may miss the mark. So, if you’re investing in a single fund and that does not deliver to the expectations, you could be way off from your goals. Hearing this could make you ask a question, should I invest in multiple equity funds? Well, it’s a valid question in light of the general market environments. And so, you can find an answer to the question in this article.
Points That Encourage Investment In Multiple Equity Mutual Funds
There are several benefits of investing in multiple equity funds which you can see below.
Diversification Makes Investment in Multiple Mutual Funds Viable
Going by the old saying, “Don’t put all your eggs in one basket”, you can invest in multiple equity mutual funds to achieve diversification. The money when invested in a single fund gets diversified across different stocks. When the money gets invested in different funds, the investment would diversify further. But the actual diversification would prevail when you invest in equity funds of different categories.
Equity funds are categorized into large-cap, mid-cap, small-cap, multi-cap, ELSS, etc. Large-cap, mid-cap and small-cap funds invest mostly in stocks of top 100 companies, top 101-250 and after top 250 according to the market capitalization, respectively. Multi-cap funds invest across the market capitalization. Whereas, ELSS funds are a tax-saving alternative in addition to making the most of the potentially high returns on offer while investing here. So, you can pick one from each of these categories. Choose the fund that must have earned investors good returns over the long term, across the categories.
Goal Remains Achievable
You may find it hard to achieve your financial goals by investing in a single equity fund. The investment in different funds would mean the money is routed to different financial instruments. In case one fund does not perform to the expectations, others can to make up for the lost opportunity.
Now that you know the utility of investing in multiple equity funds , it’s time to look at the top-performing large-cap, mid-cap, small-cap, multi-cap and ELSS funds where you should invest in.
Top-performing Large-cap Funds to Invest in
Here’s a list of top-performing large-cap funds.
| Large-cap Funds | Rating | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|---|
| Axis Bluechip Fund | 5 Star | 2.41% | 13.29% | 12.11% | - |
| Reliance Large Cap Fund | 5 Star | -4.58% | 9.15% | 10.71% | 12.18% |
| SBI Bluechip Fund | 4 Star | -2.91% | 6.03% | 11.05% | 12.12% |
| Reliance Index Fund - Sensex Plan | 3 Star | -1.10% | 10.36% | 8.29% | - |
Top-performing Mid-cap Funds to Invest in
Below is a list of mid-cap funds that have invested the money efficiently to rake in good returns for investors over different periods.
| Mid-cap Funds | Rating | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|---|
| Axis Midcap Fund | 5 Star | -4.25% | 10.18% | 12.44% | - |
| DSP Midcap Fund | 4 Star | -8.90% | 6.21% | 13.30% | 16.65% |
| HDFC Mid Cap Opportunities Fund | 4 Star | -13.43% | 4.94% | 11.71% | 17.94% |
| Franklin India Prima Fund | 4 Star | -8.48% | 5.30% | 12.62% | 16.83% |
| Reliance Growth Fund | 3 Star | -6.07% | 6.30% | 10.44% | 11.71% |
Top-performing Small-cap Funds to Invest in
The table below shows the list of small-cap funds where you should invest.
| Small-cap Funds | Rating | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|---|
| SBI Small Cap Fund | 5 Star | -13.19% | 11.18% | 18.32% | - |
| HDFC Small Cap Fund | 5 Star | -15.09% | 9.11% | 12.72% | 14.01% |
| Franklin India Smaller Companies Fund | 4 Star | -18.41% | 1.35% | 10.37% | 16.89% |
| Aditya Birla Sun Life Small Cap Fund | 3 Star | -23.07% | 0.31% | 10.16% | 13.69% |
| DSP Small Cap Fund | 3 Star | -17.57% | -0.09% | 12.01% | 18.33% |
Top-performing Multi-cap Funds to Invest in
The table below shows the list of top-performing multi-cap funds.
| Multi-cap Funds | Rating | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|---|
|
SBI Focused Equity Fund
|
5 Star | -0.80% | 10.52% | 12.97% | 18.26% |
| Motilal Oswal Multicap 35 Fund | 5 Star | -7.89% | 8.57% | 15.97% | - |
| Axis Focused 25 Fund | 5 Star | -4.85% | 12.33% | 14.06% | - |
| DSP Equity Fund | 3 Star | -2.15% | 8.66% | 10.92% | 12.68% |
| Franklin India Equity Fund | 3 Star | -8.25% | 4.46% | 10.10% | 13.11% |
Top-performing ELSS funds to invest in
Check out below the table showing a list of ELSS funds that are worth investing in.
| ELSS Funds | Rating | 1-year Return | 3-year Return | 5-year Return | 10-year Return |
|---|---|---|---|---|---|
| Axis Long Term Equity Fund | 5 Star | -1.05% | 10.43% | 13.82% | - |
|
Mirae Asset Tax Saver Fund
|
5 Star | -0.58% | 13.88% | - | - |
|
DSP Tax Saver Fund
|
4 Star | -2.30% | 8.11% | 12.19% | 14.23% |
| Aditya Birla Sun Life Tax Relief 96 | 4 Star | -10.55% | 6.86% | 12.27% | 12.63% |
| IDFC Tax Advantage (ELSS) Fund | 4 Star | -10.94% | 7.71% | 10.67% | 13.83% |
| Franklin India Taxshield Fund | 3 Star | -6.81% | 4.86% | 10.19% | 13.71% |
How to Invest in Multiple Equity Mutual Funds?
You can invest in different equity mutual funds via SIP or lump sum route. A Systematic Investment Plan (SIP) is a regular approach to investing in mutual funds at different intervals – daily, weekly, fortnightly, monthly, quarterly, half-yearly or annually. Whereas, a lump sum investment is typically a single investment in mutual fund. However, you can invest multiple times even if you opt for a lump sum.
How to Invest in Equity Mutual Funds Online?
You can invest in these funds easily online at Wishfin, an online marketplace where you can check, compare and choose the best mutual fund scheme. Investing here entails a few simple steps that you can see below.
- Go to www.wishfin.com
- Click on ‘Mutual Funds’
- Go to ‘Register’
- Enter your mobile number
- Click on ‘Get Started’
- Mention your name, email ID, the city you live in
- Create a password that conforms to alphabet, numeric and special character requirements
- Click on ‘Sign Up’
Your account will be created by entering a few more details.
After Login
Go to ‘Explore Mutual Funds’
Click on ‘Equity’ icon
A list of equity funds with different ratings, denoted in stars, will flash on the screen
Click on ‘Invest’ below any of the top-rated schemes you wish to invest in
Note – The data is sourced from Value Research as on August 9, 2019, and pertains to the regular plan of the schemes shown above.
Disclaimer – “Mutual fund investments are subject to market risks. Please read the scheme document carefully before investing”.