Best Investment Options – 5 Steps to pickup the right and best mutual funds

Quick overview about Mutual Funds

Mutual Funds pool money from several investors and invest in Stocks, Bonds, Money market instruments and other Govt Securities.  There are various types of Mutual Funds and there are several Mutual Fund schemes in each category

 Various Mutual Funds

  • Equity – These mutual funds invest majority of the money (upto 80%) in Equity shares (Stocks). Only upto 20% of its amount is invested in Bonds and Govt Securities. They generally fluctuate highly based on the market conditions. They invest in Large Cap, Mid/Small Cap and Specific Sectors alone.
  • Debt – These mutual funds invest majority of the money in Debt related securities. Unlike Equity category, these mutual funds may not fluctuate very high, but provide nominal returns over and above what we get in Bank Fixed Deposits
  • Balanced : These category mutual funds has become popular very often. They invest 80% of the money in fixed income securities and only upto 20% is invested in equity stock market. Capital protection is the main objective of these mutual funds
  • Tax Savings: These mutual funds invest in tax savings securities and offer tax savings to the investors. Thought they are invested for tax saving purposes, the returns are also high as they get invested for longer time. They generally have lock-in period of 3 years.
  • Picking up the best mutual funds are not that easy. While it should start from risk capability and the investment horizon, picking up the right mutual fund is the key for the success of the investments.

How to pick and identify “Best & Top Mutual Funds”

Now I will tell you how you can pick and identify the best mutual fund without even going to much detail. Just follow these 5 simple steps.

1)      Visit any website which provides mutual funds performance (e.g., etc.,)

2)      Select a particular category (say Equity oriented mutual funds). The data you would see is the scheme name, annualized returns in 1 year, 2 years, 3 years, 5 years

3)      Sort the mutual funds based on 5 years returns category (user microsoft excel for this)  i.e. the highest returns tops the data. Mark the top 20 mutual funds from this category with different color only in the 5 year column.

So you are marking the top 20 mutual funds which are returning the highest returns among the entire list. Now repeat this step for 3 years, 2 years, 1 year

 4)      Now your data is ready.

5)      If you see that any of the mutual funds appearing all these, these are the best mutual funds which have performed top in all market conditions comparing to other mutual funds

Confused…… Let us take below example.

Step-1: Go to website ( and  copy the table

Step-2 : Copy to microsft excel. Replace with “0” in case there is no data or shows some –.

 Step-3: Sort in 5 Yrs category (Sort largest to smallest). Now highlight cells in blue color and it appears as below.

Step-4 Repeat step-2 for 3 Years, 2 Years and 1 Years (Sort largest to smallest).




















Step-5: Now your analysed data is ready

Sort based on 5 years again and you will see the data as shown below.

Try checking the maximum row items appearing in all these tables. ICICI Top 100, Birla SunlifeTop100, SBI Magnum equity fund has evolved as the top performers. These are the best mutual funds of India.

Your mutual fund picked up with this approach is the top Mutual Fund in India. This method is best suited for people who keep saying “I do not have time to analyse the mutual fund schemes, neither I believe in financial advisors who recommend the mutual funds for sake of money.

Have you enjoyed this post? Please provide your valuable comment to improve my though process.



Leave a Reply

Your email address will not be published. Required fields are marked *