Best Mutual funds to invest in 2014

best mutual funds to invest in 2014

Searching for Best never ends. You find it difficult to settle for good or average. You want best food, best clothes, best car, best home…and so on. While searching for investment products also you look out for the best instruments. This is why you invested in Mutual funds which are promoted as best mutual funds to invest in 2013. But What is best? As per me Best is what is most suitable to your personal requirement /goals and risk profile. As I am not aware of your goals or risk profile, so keeping that separate, I present you a list of best Mutual funds to invest in 2014 as per my parameters.

Parameters to select the Best Mutual funds to invest in 2014

In my post published in Money I have discussed about various parameters while selecting best mutual funds to invest in. Let me summarize those here:

1. Performance ranking  – Quartile ranking

As per these rankings Mutual funds are divided in 4 quartiles based on the returns they have generated. Quartile 1 carries top 25% of funds and Quartile 4 carries 25% of funds given least return.

2. Ratio analysis – Alpha , Standard deviation

Alpha denotes the extra return that the fund manager has generated as compared to benchmark. Standard deviation denotes how risky or volatile the fund is.

3. Fund manager tenure and experience

Fund manager tenure tells us that since how long the fund is being managed by same fund manager. Recent change in the fund manager should make the investor wary about the future of the fund.(Also Read:MF case study)

4. Expense ratio and Scheme Asset size.

High expenses means less returns, but expense ratio is the factor of scheme asset size. SEBI has put restrictions on the Expense ratio which depends on the funds asset size. Higher the asset size lower will be the expenses. Though we can look out for a minimum expected scheme asset size but if the fund is consistently performing and fund manager is experienced and generating Alpha, so many time expense ratio does not matter. But higher the Asset size is always better.

So based on above mentioned parameters, to find out best mutual funds to invest in 2014,we have filtered out the funds which should fall into Quartile 1 ranking for 1 and 3 year performance, Should have generated Positive Alpha in last 1 and 3 year and fund manager tenure should be at least of 1 year.

Before going ahead, I would like to reiterate that consider the below list of funds as something you should look at after understanding your risk profile, and decided on a suitable asset allocation. Zeroing onto specific funds in your particular case might require understanding of funds Risk parameters too. Also keep in mind the standard disclaimer that fund houses give :

Mutual funds investments are subject to market risks, read all scheme related documents carefully before investing”

Best Mutual funds to invest in 2014 – Large Caps

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – Large Caps (Performance)

best Mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – Large and Midcap

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – Large and Midcap (Performance)

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – Mid and Small Cap

best mutual funds to invest in 2014

 Best Mutual funds to invest in 2014 – Mid and Small Cap (Performance)

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – ELSS

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – ELSS (Performance)

I have included Franklin India Tax shield in the performance comparison, since few months back when i did the same filtering on Tax saving funds, Franklin India tax shield came out as clear winner (Tax saving mutual funds for 2013). Just wanted to figure out what went wrong now.

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – Multi Cap

best mutual funds to invest in 2014

As there’s nothing much to show on Multi cap funds, so i have not made any performance comparison of these funds

Best Mutual funds to invest in 2014 – Equity Oriented hybrid

best mutual funds to invest in 2014

Best Mutual funds to invest in 2014 – Equity oriented Hybrid (performance)

best mutual funds to invest in 2014

Data Source: the complete data above has been generated from FE analytics as on 31/12/2013

Every new year brings another opportunity to review the things and take corrective actions as and when required. So this post on “Best Mutual funds to invest in 2014” will help you in making an opinion on your Mutual funds portfolio.

I have covered only equity and equity oriented hybrid funds in the article. As selecting parameters of debt mutual funds are bit different so that will be covered in a separate article.

Do share, how did you like the article above.


  1. Hello Sir,
    I want to invest in mutual fund for 3 year , 5000 per month SIP .. Tell me which on will be the best
    .Currently investing 1000 pe month in dsp black rock small & midcap regular growth and 1000 per month in kotak select focus Growth ,ince June 2014 . tell me for how many year Can i continue to onvest in these 2 fund….

    • For 3 years, i don’t advise to invest in equity. If you want to go in for 3 years only…go with a balanced fund like HDFC balanced.
      Its always better to have a goal and defined asset allocation, which puts you into a process to invest, sell and reinvest.

  2. singal sir, how r u i have a ? regarding investing in ppf & elss both r tax saving products. one has equity exposure and other has a fix rate of interest and backed by govt. which one u suggest for wealth accumalation from tax point of view. please send me some distinguist help. thank u

    • Rupesh, I am fine ,thanks.
      Whether to Invest in PPF or ELSS from wealth accumulation point of view totally depends on your risk tolerance and your target amount.
      You know how both products work, you know the risk associated and return generation capacity of both, so selection should not be much difficult for you. Where PPF generates a fixed return, ELSS returns depends on stock market movement. PPF generates non volatile returns, ELSS has potential to generate much higher returns than PPF.
      See i am an equity person. I strongly believe that if you can stay invested in ELSS for the time you have lock in in PPF you will surely generate huge returns. But if you are allergic to volatility then go for PPF.
      Alternatively mix both.

  3. Hi,
    your articles and advices are really helpful for investor like me.
    I want to start SIP with long term goal (16 – 20 years). I have shortlisted some funds as below;
    1. ICICI Prudential Focused Bluechip Equity – Rs. 7000/-
    2. Mirae Asset India Opportunities Fund OR UTI Equity Fund OR Quantum Long Term Equity Fund– Rs. 5000/-
    3. HDFC Mid-Cap Opportunities OR ICICI Prudential Value Discovery Fund – Rs. 4000/-
    4. HDFC Balanced Fund – Rs. 3000/-
    Kindly review and suggest
    also pls refer No. 2 & 3 and suggest which one I should select

    apart from this kindly suggest me one more fund for Rs. 5000/-

    • Bhartendu, your fund selection is looking fine to me.
      When your horizon of 16-20 years then don’t add balanced fund into it. Rs 3000/- of balanced fund and also Rs 5000/- which you want to invest more, can be clubbed and Invested in any other fund from point 2 and both from point 3.
      So in total you will be having 1 pure large cap, 2 large cap oriented and 2 mid and small cap funds. Good portfolio 🙂

  4. Hi Sir, I am regular investor for last 2.5 years on the following funds:
    1) HDFC Top 200 – INR 5000
    2) HDFC Balanced Fund – INR 4000
    3) ICICI Focused Blue Chip – INR 5000
    4) Franklin Focused Blue Chip – INR 4000
    5) IDFC Premier Equity – INR 4000

    As I thought Midcap exposure is low started SIP on following funds from this month (Sep’14)
    1) UTI MID Cap fund – INR 4000
    2) ICICI Prudential Value Discovery Fund – INR 4000

    Question 1: Pls advice on the quality of funds. Can stay invested for next 10 yrs in all theses funds.
    Question 2: As of today am investing INR 30,000 per month. Whats the max corpus I can expect in next 10 years.
    Question 3: Saw good growth on the funds with avg 15% return as of today (2.5 yrs list) with the current market acceleration too. So redeemed 25% (without capital gains tax ) of total value as of today to prepay my homeloan & reduce debt. Pls advice if its is a right move.

    • Ans 1 – Funds are fine. Can’t comment on portfolio.
      Ans 2 – No Idea. it depends on assumption you take.
      Ans 3 – Better to consult your financial planner for this answer. You must have don this txn after understanding the pros and cons of the same and also knowing its affect on your other long and short term goals.

  5. Hi Sir,
    Currently I am Investing in Below Fund Regularly Per Month Basis .My Scenario is for 3 Yesr
    -Franklin India Smaller Cos Fund(G) 1,000
    -ICICI Pru Exports & Other Services Fund-Reg(G) 1,000
    -HDFC Balanced Fund(G) 2,100
    -SBI Pharma Fund-Reg(G) 1,000
    -Kotak Select Focus Growth – 1000

    Please Do i Need to change My Portfolio..
    Please Suggest sir waiting your response..

  6. My age is 29 and being a banker myself have delayed in planning for my retirement .so I intend to save 30000 per month for next 25 years.
    please advise if my fund selection is good.
    1.icici pru tax plan -elss 4000 per month
    2.relianc tax saver 4000 per month
    3.axis long term equity elss 4000 per month
    4.franklin Templeton tax shield 4000 per month
    5.icici pru focused bluechip 2500 per month balanced 2500 per month
    7.mirae emerging bluechip 2500 per month.
    8.birla sunlife top 100 2500 per month
    9.idfc premier equity 4000 per month

    Note -I plan 1.5 lakhs per annum for elss tax planning .so only have 4 funds .
    request your comments

    • Thabresh, you don’t need 4 ELSS funds for your tax saving, i think 1 or 2 will do. Also i think that you must be having some insurance plans with you, and your bank must be deducting EPF from your salary, so you my not need 100% tax saving investments in ELSS.
      Regarding other funds ,the selection is fine, but replace HDFC balanced with HDFC equity as balanced funds from asset allocation point of view creats confusion. Also i believe that besides this equity allocation you must be saving in some debt instruments like PPF or Bank deposits too, which is required to keep the volatility of the portfolio in acceptable line.

  7. Thanks for your speedy reply.Also one more clarity on Elss.
    Is Elss performance on same lines of Diversified equity or during bear market will these investment take a hard hit.
    Im curious on this as I invested in HDFC tax saver in 2012 and its almost doubled in 3 years.So are the performance of good diversified equity funds.But i have not done any investment when market went down drastically like 2008.

  8. Hi Mani, between Canara Robeco Emerging Equities, Reliance Small Cap and UTI Midcap, which is better for investing? Help me choose. Do we go on the basis of AUM, in case all are well managed (ie., higher the AUM, better)? I propose atleast Rs.10000 pm in anyone of these. Please give your views.

    • If performance wise both are looking more or less same, then go with the one with low expenses ratio ( which yes is a factor of high AUM). Also look at the fund managers tenure. Older the better.


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