3 Mutual Fund Schemes Rated 5-Star By Morningstar To Start SIPs

Markets have fallen a bit and this makes mutual fund schemes, much more attractive than they were before the start of the year. Net asset values have fallen since the start of Jan, making it attractive for SIPs. Here are a few Systematic Investment Plans that have been rated 5-star by Morningstar to invest through SIPs.

Canara Robeco Bluechip Equity Fund

This is a largecap fund that has been rated 5-star by Morningstar. The fund invests most of its money in companies with a high market capitalization. Canara Robeco Bluechip Equity Fund has given returns of 7.58% on a 1-year basis and 13.19% on an annualized basis over the last 5-years. On a 5-years basis, the returns compare well with other mutual fund schemes.

To start an SIP one needs to invest a minimum of Rs 5000 and thereafter in multiples of Rs 1000. The portfolio of the fund is pretty strong with the top holdings being Infosys, ICICI Bank, HDFC Bank, Reliance Industries and TCS. The top 10 stocks in the portfolio equals almsot 54% of the portfolio holdings. Canara Robeco Bluechip Equity Fund barely has any holdings in cash, which is just 4%. With the markets now having fallen 13% from highs, those funds who had large cash holdings could have deployed the same now. Hard to predict what returns from SIPs would be, but, given that interest rates ate headed higher, the threat to equities remain.

Edelweiss Midcap Fund

This is a midcap fund and the risks are far higher than largecap funds. Having said that Foreign Portfolio Investors are exiting the Indian markets and driving largecaps lower, rather than midcaps. In any case, Edelweiss Midcap Fund has been rated 5-star by Morningstar. An SIP of Rs 10,000 over the last 3-years has resulted in a value of Rs 5.28 lakhs, against Rs 3.6 lakhs of money deployed through SIP.

Edelweiss Midcap Fund has a strong portfolio and some of the names include stocks like Persistent Systems, Cholamandalam Investment, Trent, Federal Bank, Crompton Graves etc. The 5-year returns from the fund is 13.91%, while the 3-year returns is close to 13%. Overall, Edelweiss Midcap Fund has been a decent performer. The past track record is good, but, as is well known the future is unknown.

Mirae Asset Emerging Bluechip

This again is a largecap fund, where Morningstar has accorded a 5s-tar rating. The fund has generated a return of 19% over the last 1-year, while the 5-year returns is 14.95% on an annualized basis. The fund has invested 99.5% in equities, with barely any cash or debt holdings. In times of a market downside, the fund may barely have resources to average out.

Among the top 5 holdings of the fund, 4 are from the banking space namely ICICI Bank, HDFC Bank, SBI and Axis Bank. The fund has assets under management of nearly Rs 22,000 crores.

To start an SIP at Mirae Asset Emerging Bluechip Fund you would need an initial sum of Rs 5000 and Rs 1,000 thereafter. We would recommend SIPs and not lumpsum as investment, given the present volatility in the markets.