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What Does a 5-star Rated Mutual Fund Mean?

Mutual Funds65 views

Highlights

  • Want to know on what basis a mutual fund get the topmost 5-star rating?
  • It's on the basis of the good performance in 1, 3, 5 and 10 years

The rating of a financial instrument, be it a mutual fund, carries a lot of importance for an investor wanting to put their hard earned money in the said asset class. There are several rating agencies such as Value Research that rate mutual funds in 1 to 5 stars based on how they have performed over different periods. The 5-star rated mutual funds are the ones that have delivered consistently good returns in a span of 3, 5 and 10 years. Also, such kind of rating is assigned to funds that have not only grossed more than their benchmark but also exceeded the average return of the fund category. You can thus choose these 5-star rated mutual funds across the categories of equity, debt and hybrid according to your risk-appetite.

Equity Mutual Funds with a 5-star Rating

These funds invest mainly in equity and equity-related instruments of companies. The objective of these funds is to appreciate the growth of invested capital over time.

Equity Funds with a 5-star Rating1-year Return3-year Return5-year Return10-year Return
Reliance Large Cap Fund-7.25%8.10%9.49%12.02%
Axis Bluechip Fund0.69%12.61%10.93%-
Motilal Oswal Multicap 35 Fund-9.40%7.84%14.93%-
SBI Small Cap Fund-12.67%10.93%17.80%-
HDFC Small Cap Fund-15.62%8.14%11.64%13.87%
Mirae Asset Tax Saver Fund-2.56%13.21%--
Axis Long Term Equity Fund-2.84%10.14%12.32%-

Debt Mutual Funds with a 5-star Rating

These funds invest a heavy chunk of the corpus in debt and money-market instruments. The investments can lead to regular income generation.

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Debt Funds with a 5-star Rating1-year Return3-year Return5-year Return10-year Return
Reliance Liquid Fund7.47%7.10%7.60%7.85%
Baroda Liquid Fund7.36%7.08%7.61%7.86%
Axis Liquid Fund7.39%7.10%7.60%-
HDFC Short Term Debt Fund9.35%7.68%8.38%-
Franklin India Short Term Income Plan - Retail Plan7.94%8.37%8.73%8.73%
Baroda Short Term Bond Fund8.90%8.01%8.46%-
Franklin India Low Duration Fund8.45%8.47%9.00%-
SBI Magnum Low Duration Fund8.55%7.50%8.00%8.00%
Franklin India Dynamic Accrual Fund8.40%8.39%9.41%8.18%

Hybrid Mutual Funds with a 5-star Rating

If you invest in these funds, you will most likely receive the benefits of capital appreciation and income generation. It’s because of the fact that investments are made in both equity and debt instruments.

Hybrid Funds with a 5-star Rating1-year Return3-year Return5-year Return10-year Return
HDFC Retirement Savings Fund - Hybrid Equity Plan-2.05%8.23%--
Principal Hybrid Equity Fund-7.00%8.49%9.45%10.98%
Mirae Asset Hybrid Equity Fund0.40%9.20%--
ICICI Prudential Regular Savings Fund5.99%7.89%9.61%9.65%
HDFC Equity Savings Fund1.49%6.85%7.57%9.12%
Aditya Birla Sun Life Balanced Advantage Fund0.68%6.45%8.13%9.59%

How to Invest in a 5-star Rated Mutual Fund?

You can invest in any of the 5-star rated mutual funds shown above at Wishfin, a neutral financial marketplace that keeps in place a broad array of mutual fund schemes for investors to subscribe. The process to invest is explained through points below.

  • Visit www.wishfin.com
  • Go to ‘Mutual Funds’ tab
  • Click on ‘Register/Login
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If you are a new investor, you need to click on ‘Register’

  • Enter your mobile number
  • Enter the OTP received on your mobile number
  • Mention the personal information such as name, email ID, the city you live in
  • Enter the password complying with the requirements as laid down
  • Click on ‘Sign Up’

The online login access can be created by mentioning a few more details.

Login Process

  • Log in using your mobile number on email ID and OTP
  • Find 5-star rated mutual funds and click on ‘Invest’ under the select scheme

Note – The data is sourced from Value Research as on August 20, 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.