Top 5 Midcap/Smallcap mutual funds in India to invest for 2014

Top Mutual funds India to invest for 2014Top 5 Midcap/Smallcap mutual funds in India to invest for 2014

You might be investing in large cap and diversified mutual funds. However, if you want to grow your investment in faster pace, you should consider mutual funds in India which invests in midcap and small cap stocks too. Midcap and small stocks perform well in medium to long term and can multiply your investments. However, identifying such stocks at an individual level would be difficult. Hence investing in such midcap or small cap Indian mutual funds would help you to reach your goals faster.

What are midcap and smallcap India mutual funds?

Midcap/smallcap mutual funds are those which invest < 45% in CRISIL-defined Large Cap Stocks over the last 3 years. While large cap mutual funds provide stability to your returns, midcap/smallcap mutual funds can provide growth in your investment at faster speed. Selecting top mutual funds India in this sector would be key. Several midcap and small cap stocks vanish or see a severe downturn during the market crash. Hence we can leave this to professionals in mutual funds so that they can manage it well across stocks.

Also read: How to maximise returns from SIP in mutual funds?

Top 5 Midcap/Smallcap Mutual Funds in India to invest for 2014

These 5 are India’s top mutual funds which are arrived based on below parameters.

  • Top 5 funds picked based on highest returns received in the last 3 to 5 years
  • These funds also segregated based on SIP returns in last 5 years. If both funds have given similar returns in 5 year period, only one has performed well in last 2 years compared to the second, we have given preference to first one.
  • Funds which are rated by Crisil as Rank-1, Rank-2 and Rank-3 which indicates good fundamentals for these top 5 mutual funds.
  • Value research rated these mutual funds as 5 star and 4 star.
  • AUM (Assets under management) > 100 Crores. This proves investor confidence among these top mutual funds.

Top-1: SBI Emerging Business Fund

Strategy of the fund: It aims and focuses on investing emerging business based on exports or out sourcing opportunities.

Performance of the fund: This is a 1st top performing Indian mutual fund and its 5 year returns are 31% per annum. It gave 6.5% annualised returns in the last 1 yr. If you have invested Rs 1,000 in SIP in last 5 years, your invested amount would  be Rs 60,000 and investment value would have been Rs 92,000.

Reasons to invest: AUM of this scheme is Rs 1193 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-1 and Value Research online ranks it as a 5-Star rating (5 out of 5). Investing in such top mutual funds in India with highest rating would add value to your portfolio

Top-2: Franklin India Smaller Companies fund

Strategy of the fund: This fund aims for long term capital appreciation by investing in midcap and small cap companies. This fund invests 75% in smaller companies.

Performance of the fund: This is 2nd top performing mutual fund in India and its 5 year returns are 26% per annum which has beaten even equity mutual fund returns. It gave 13% returns in last 1 year. If you have invested Rs 1,000 in SIP in last 5 years, your invested amount would  be Rs 60,000 and investment value would have been Rs 89,000.

Reasons to invest: This fund consistently beats its peer mutual fund schemes and its benchmark. One should have such funds as part of their portfolio. AUM of this scheme is Rs 278 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-2 and Value Research rates this as 4-Star (4 out of 5).

Top-3: HDFC Midcap Opportunities Fund

Strategy of the fund: It aims to generate long term capital appreciation by diversifying its midcap and small cap companies.

Performance of the fund: This is the 3rd top performing India mutual fund and its 5 year returns are 26% per annum. It gave 6% returns in last 1 year. If you have invested Rs 1,000 in SIP in last 5 years, your invested amount would  be Rs 60,000 and investment value would have been Rs 88,000.

Reasons to invest: It has beaten equity mutual fund performance. AUM of this scheme is Rs 2,534 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-3 and Value Research rates this as 4-Star (4 out of 5).

Top-4: ICICI Prudential Discovery Fund

Strategy of the fund: This fund aims to invest in well diversified portfolio of value stocks which has attractive valuations to earnings or book value or based on expected future dividends.

Performance of the fund: This is a 4th top performing mutual fund in India in this category and its 5 year returns are 31% per annum which has beaten even equity mutual fund returns. It gave 8% returns in last 1 year. If you have invested Rs 1,000 in SIP in last 5 years, your invested amount would  be Rs 60,000 and investment value would have been Rs 87,000.

Reasons to invest: AUM of this scheme is Rs 2,433 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-2 and Value Research rates this as 5-Star (5 out of 5). Investing in such top mutual funds in India which are consistent performers would help you to build strong portfolio.

Also read: How FMP Mutual funds are tax efficient that bank FD ?

Top-5: IDFC Premier Equity fund

Strategy of the fund: Invest in mid and small sized companies which are available at cheap valuations.

Performance of the fund: This is a 5th top performing mutual fund and its 5 year returns are 27% per annum. It gave 4% returns in last 1 year. If you have invested Rs 1,000 in SIP in last 5 years, your invested amount would  be Rs 60,000 and investment value would have been Rs 85,000.

Reasons to invest: AUM of this scheme is Rs 3,100 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-2 and Value Research rates this as 4-Star (4 out of 5).

Quick summary along with comparison

Top Mutual Funds India-Nov-13

Conclusion: I am not saying you should invest only in these 5 mutual funds. Investing in such midcap and small cap mutual funds would be less risky compared to midcap stocks. Review these top mutual funds in India and you should plan your portfolio in such a way that you should add 2-3 funds from this category to diversify your portfolio as they would help you to earn higher returns at faster pace.

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Suresh
Top Mutual Funds in India

Suresh KP

71 comments

  • Shiva

    Hello Mr.Suresh, this is prashanth. I have a query …. I am actually new to mutual funds, i wish to invest in such a scheme that would offer me good returns. I am looking to invest just for an year. So i have shortlisted the following

    1) Can Robeco Emerg-Equities (G)
    2) Franklin Build India Fund (G)
    3) Reliance Small Cap Fund (G)
    4) UTI Mid Cap (G)
    5) Reliance Tax Saver (ELSS) (G)

    All these funds are offering close to 100 percent returns when invested for a year. I am looking at investing close to 70000, so please tell me if i should go ahead or how should i plan this investment. Since i am new, i am not sure how to plan ahead…. KIndly suggest me on how i should take it forward. If u have any idea on other schemes, kindly let me know

    Thanks in advance

  • Thabresh

    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
    6.hdfc 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
    Regards,
    Thabresh.I

  • Deepak

    Hello Sir
    Your articles are very very informative
    I am 29 yrs of age
    Following is my portfolio please suggest any changes
    Bsl eq fund 4000/pm
    Bsl infra fund 1000/pm
    Reliance pharma fund 1000/pm
    Reliance small cap 1000/pm
    Icici pru banking&financial service fund 1000/pm
    Icici pru pru focused ble chip eq fund 2000/pm
    Hdfc prudence fund 2000/pm
    Hdfc midcap fund 2000/pm
    My question is
    1) do you agree with my fund house selection
    2) is my finance in each fund properly allocated if not please suggest
    3) do you have any better suggestions than this please advise
    4) what should be my time horizon for sector funds & should I include any more sector
    5) should I minimise my fund house selection then which should I eliminate
    6) is my funds house going to gain me more wealth or should I make any change
    I am willing to take risk till I am 40
    Thanks
    Regards
    Deepak

    • Deepak, Funds selected are good. However it is more towards high risk as it contains sector funds, mid-cap funds and less of large cap and balanced funds. If you are high risk investor, ok, else reduce in sector / mid-cap. Sector funds invest for 3-5 years only and review industry performance before continuing. 

  • rakesh

    hi sir,
    i have gone though some of ur comments. i am 35 yrs and want to invest 5000 pm as sip for a span of 10 yrs. pl recommend
    some funds.

    • Rakesh, What is your risk appetite ? If you are medium risk to high risk appetite investor, invest in large cap funds and balanced funds. Invest in these funds. 1) Large cap – HDFC Top-200 / ICICI Pru focussed blue chip fund 2) Balanced – You can check HDFC Prudence / ICICI Balanced fund. 

  • Rajeev Gupta

    Dear Suresh,

    I want to invest in following mutual funds for a horizon of >10 years.
    1) icici pru blue chip – 6000
    2) uti opportunity – 6000
    3) icici discovery – 6000
    4) reliance equity opportunity – 6000
    5) reliance pharma fund – 6000
    6) hdfc balanced fund – 6000

    Kindly suggest is this OK or need some change.
    Thanks & regards,

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