Looking to invest and get interest beyond your average savings account and fixed deposits?
Well, the answer to your prayers would be Mutual Funds.
Mutual funds constitute as an investment vehicle that takes in your investment, drops it across several various stocks and brings it back magnified.
The concept, simple, is specially designed for small investors and has been catching on in India off late. In fact, the numbers related to Asset Under Management have been constantly rising at an amazing rate for the past decade. The AUM of the Mutual Funds industry in the country rose by an awestriking number of 7.1 trillion rupees from ₹ 5.05 trillion as on 31st March 2008 to ₹22.60 trillion as on 31st May 2018 in a span of just 10 years.
Increased awareness, growing interest in making equity investment safely, non- volatile and stagnated gold prices along with some other economic factors have led more people towards the path of mutual funds. Choosing which fund house to invest in can be very confusing though. Here, is a short comparison between some of the major mutual fund houses in in India to give you an idea.
1. ICICI Prudential Mutual Fund
This Asset Management Company is a joint venture between ICICI Bank of India and Prudential Plc of UK. Prudential Plc is one of the front runners in the financial services sector of UK. Managing assets worth of ₹227,989 crore, ICICI Prudential Mutual Fund is the fund house with the largest amount of AUM.
Focused Blue-chip Equity Fund by ICICI Prudential is a popular fund by this asset management company with an AUM of ₹13,497 crore which is considered an advantage because this is a large cap fund.
Another recommended fund by the same is ICICI Prudential Balanced Fund. It has returned an exceptional annual rate of 15.03% since it was launched in 1999 considering that it has only been around for 18 years. ICICI Prudential Mutual Fund offers a total of 1459 different mutual funds which is the biggest number in the game. Some more notable ones are ICICI Prudential Nifty Next 50 Index Fund, ICICI Prudential Top 100 Fund, among others.
2. HDFC Mutual Fund
Launched in 1999, this AMC follows ICICI in a fairly close race. Efficiently managing 221,825 crores in assets, HDFC Mutual Fund diversify your portfolio over an astonishing 890 funds. It’s an impressive number considering that it started off 6 years after the biggest fund house in the country (ICICI Prudential Mutual Funds).
HDFC Top 200 Fund and HDFC Equity Fund among others were earlier Zurich funds, acquired in 2003.
The most recommended is the HDFC Balanced Fund that has made an inspiring rate of 16.97% in returns since its launch in 2000. Some other funds that have recorded commendable performances are HDFC Index Fund – Nifty Plan and HDFC Index Fund – Sensex.
3. Reliance Mutual Fund
Look no further, if diversifying the portfolio is your thing. It offers a staggering total of 1033 funds; however, it is currently the third largest fund house from the top after HDFC with 195,845 crores worth of assets under management. Reliance Mutual Fund as an AMC manages the largest amount of assets beyond the top 15 cities in the country and has a satisfactory popularity in the market.
Being a small cap high risk fund, it is commendable how they have been able to return a very high rate of 21.28% since their initiation in 2010. Other funds worth mentioning by this Asset Management Company are Reliance Index Fund – Nifty Plan, and Reliance Regular Savings Fund – Balanced.
4. Birla Sun Life Mutual Fund
This Asset Management Company was established in 1994 as a joint venture between Birla Group of India and Sun Life Financial Inc. of Canada. This fund house manages 636 funds with assets worth 180,808 crores under management. Birla Sun Life Frontline Equity Fund has returned an astounding 22.56% since initiation in 2002 which is quite impressive for a large cap fund. Other recommended fund by this AMC is Birla Sun Life Tax Relief 96 which is an Equity Linked Savings Scheme fund which means it enables people to save tax under Section 80C.
5. SBI Mutual Fund
With the credibility that comes along with being a PSU, SBI Mutual Fund enjoys agood influence and reach along with a very healthy popularity in India. A lesser known fact though is that SBI Mutual Fund is actually a joint venture between State Bank of India (SBI) and Amundi, a European Asset Management Company.
SBI Mutual Fund manages ₹140,997 worth of assets across a total of 565 mutual funds. Other recommended funds are SBI Bluechip Fund and SBI Magnum Multicap Fund. SBI Mutual Fund manages assets worth ₹14,267 with an annualized return rate of 11.8% since its launch in 2006.
Though there are several mutual funds to choose from for your investment, it is necessary to compare the various houses and their schemes based on a range of factors. These factors could be the total AUM, years of experience, fund manager’s experience, performance in terms of NAV and returns etc.
Hence, comparison, intuition and proper analysis of mutual fund houses and their schemes will lead to proper financial planning and successful completion of your goals.