Gold-rated mutual funds by Morningstar are the recommendations within their Morningstar Categories. The firm evaluates the same based on its own key pillars that leads it to expect Gold-rated to Morningstar Category peers (or the Morningstar Category benchmark, if the fund is actively managed) by the widest margin, after fees. Here are 2 gold rated mutual funds from Morningstar, where an individual can start an SIP.
First, a caution before investing in equity mutual funds
Before we inform readers of the two mutual fund schemes, let us warn readers that these are equity mutual funds, so the risks remain high. The last 1-month has shown us immense volatility and the markets are now down, thanks to the spread of a new covid variant called the Omicron.
Having said that the markets are trading at a significant premium to long-term averages and are hence expensive. It is therefore our suggestion to just stick to SIPs, so even if the markets fall investors can average their acquisition of units, by buying at lower rates. We have been advocating SIPs only given that the markets have jumped sharply in the last 1-year.
Mirae Asset Emerging Bluechip Fund
This fund has a gold rating from Morningstar. Mirae Asset Emerging Bluechip Fund looks to generate for unit holders by investing in a diversified portfolio predominantly in equities and equity related securities of large cap and midcap companies at the time of investment.
A Rs 10,000 monthly SIP for 36-months would have generated a portfolio value of Rs 5.71 lakhs now. This means an investor would have invested Rs 3.6 lakhs, which would have generated a portfolio value of Rs 5.71 lakhs.
The net asset value under the growth plan for Mirae Asset Emerging Bluechip Fund is Rs 97.47. An SIP will not cost much for an investor and one needs only a sum of Rs 1,000 every month to start an SIP. Mirae Asset Emerging Bluechip Fund has holdings in stocks like ICICI Bank, HDFC Bank, Infosys, Axis Bank and State Bank of India.
Aditya Birla Sun Life Frontline Equity Fund
This is another fund that has a gold rating from Morningstar. The fund has generated a 1-year returns of almost 35%, while the 3-year returns are 16.42% and the 5-year returns are 14.95% on an annualized basis. The assets under management of the fund is almost Rs 22,461 crores. Almost the entire portfolio is invested and there is very little cash and cash holdings currently with the fund.
Individuals can start an SIP in Aditya Birla Sun Life Frontline Equity Fund with a small amount of Rs 100 every month. The fund has holdings in stocks of ICICI Bank, Infosys, HDFC Bank, Reliance Industries and Bharti Airtel. The net asset value under the growth plans is Rs 339.42. Investors who wish to invest for a period of 3-5 years should consider the Aditya Birla Sun Life Frontline Equity Fund.
Investing in equity mutual funds is risky and investors are advised caution. Invest only if you have an appetite to take risk. Please be informed neither Greynium Information Technologies Pvt Ltd nor the author are liable for any losses caused as a result of decisions based on the article.