Value Research has been rating equity mutual fund schemes for many years now and has good credibility. We have picked 3 such equity mutual fund schemes that have been rated as 5-star by the firm and which can be considered for Systematic Investment Plans.
Axis Small Cap Fund
This fund is not for investors unwilling to take the risk. Small cap funds are highly volatile in terms of returns and hence investors should be careful. Axis Small Cap Fund has generated a returns of 91% in the last 1-year, which is phenomenal. The 3-year returns is 29% on an annualized basis, which again is amongst the best in its class.
The fund has exposure to small cap stocks like Galaxy Surfactants, Tata Elxi, JK Lakshmi Cement, CCL Products etc. This fund has also been rated as 5-star by Morningstar, another top rating agency.
You can commence an SIP in the stock with a sum of Rs 500 only. Investors looking for long-term returns invest. A sum of Rs 10,000 invested in SIPs in he last three years would be worth Rs 6.5 lakhs today. This means, if you had to invest every month Rs 10,000 for 36 months the sum invested would be Rs 3.6 lakhs, but, your portfolio value would be a solid Rs 6.5 lakhs.
ICICI Prudential Short Term Fund
We have chosen this fund for those looking to invest in debt funds by way of SIPs. ICICI Prudential Short Term Fund is a debt fund that generates income through investments in a range of debt and money market instruments. For those looking at steady returns and protection of capital, this is a good fund to be in. ICICI Prudential Short Term Fund has been rated as 5-star by Value Research.
As is the nature of the scheme, most of the money is parked in government owned securities, which are likely to provide safety, but, low returns. Investors can start an SIP by investing a sum of Rs 1,000 every month. This is a rather large fund with assets under management of nearly Rs 21,000 crores.
Canara Robeco Emerging Equities Fund
Again, this is a SIP to invest, where the ratings are 5-star from Value Research. The fund invests in a combination of large- and medium-sized companies, which gives flexibility to the fund manager to move from larger companies to slightly smaller or vice versa.
The assets under management of the fund is Rs 9,633 crores and investors can look to invest small sums of Rs 1,000 every month. While Canara Robeco Emerging Equities Fund is a kind of flexi cap fund, most of the investments are tilted towards the large cap stocks with holdings in stocks like HDFC Bank, Infosys, ICICI Bank, Axis Bank and Bajaj Finance.
At the moment, with the markets at record highs, the best way to invest would be the SIP route. it's difficult to predict movement of markets in the longer term and hence this is the best route to take. If you are unable to analyse the funds it is better go for SIPs of well rated funds.
Investing in Mutual funds, particularly equity mutual funds are subject to stock market risk. Please do your own analysis and research. Neither the author, nor Greynium Information Technologies would be responsible for losses incurred based on this article.