Best Mutual Funds to invest in 2021 – Best SIP for 2021 in India
Top 15 Best Mutual Funds to invest through SIP in 2021 India
Generally, mutual fund investors would invest in 3-5 mutual fund schemes through SIP and redeem as and when they need money. Instead of this, they should invest based on the risk appetite, financial goal and tenure. This way they can maximize the returns from such SIP mutual funds. Like every year, even this year, we are recommending top and best mutual funds to invest through SIP in 2021. This time instead of top 10 mutual funds, we would recommend Top 15 Mutual Funds for 2021. Which are the Top 15 Best SIP to invest in 2021 in India?
Also Read: International Mutual Funds with 1 year return of 75%
What are SIP Mutual Funds?
Systematic Investment Plan popularly known as SIP is the option provided by mutual fund houses where one can invest a small amount in a disciplined manner. You can invest in SIP Plans either daily, fortnightly, monthly, quarterly or yearly. Most popular one is monthly SIP. You can invest as low as Rs 500 per month in SIP Plans.
How to choose SIP Mutual Funds?
Here are some tips on choosing Best Mutual Funds to invest in India.
1) Risk Appetite: Choose a SIP mutual fund based on your risk appetite (High risk, moderate risk and low risk). If you are low to moderate risk taker, no point in investing in a midcap mutual fund, which is meant for high risk takers. Investing in the correct SIP mutual fund would always reward you with higher returns.
2) Tenure of investment: Choose a mutual fund based on tenure you want to invest. This would help you to choose right mutual fund scheme. If you want to invest for 3 months, liquid mutual funds could be better. If you are looking to invest for 10 years, large cap mutual fund scheme / Flexicap mutual funds could be better options than debt mutual funds.
3) Fund Performance: When you choose a mutual fund scheme check how a mutual fund scheme performed in various market cycles. An extra step of checking the rolling returns i.e. checking consistency returns compared to peers and benchmark would always help you to invest in winning mutual funds.
4) Ranking and Ratings: Ranking given by Crisil and Ratings by Value Research could be taken additional parameters to assess the quality of the mutual fund scheme. This parameter should not be the sole reason to buy a SIP mutual fund.
Sector funds are avoided here. Index funds would work for strategy of long term investment, but many investors are still not in favor of it. while I am not against them, we have not considered in this article.
We have filtered based on the above criteria and came out with Top 15 Best Mutual Funds to invest in India through SIP in 2021.
Top 15 Best Mutual Funds to invest through SIP in 2021 in India
Here are Best SIP to invest in 2021 in India.
#1 – Mirae Asset Large Cap Fund
#2 – Axis Bluechip Fund
#3 – SBI Bluechip Fund
#4 – Canara Robeco Bluechip Equity Fund
#5 – Mirae Asset Emerging Bluechip Fund
#6 – SBI Small Cap Fund
#7 – Kotak Emerging Equity Fund Regular Plan
#8 – Axis Midcap
#9 – Axis smallcap
#10 – Kotak Standard Multicap Fund Regular Plan
#11 – Parag Parikh Flexicap fund
#12 – UTI Equity fund
#13 – SBI Equity Hybrid Fund
#14 – HDFC Hybrid Equity Fund
#15 – Canara Robecco Equity Hyrbid fund
Top 15 Best Mutual Funds to invest through SIP in 2021 – More Insights
Let us get into more insights about these funds.
Best Largecap Mutual Funds to invest through 2021
We have filtered 4 largecap mutual funds from this segment. Out of them 3 are already recommended by us last year. Canara Robeco Bluechip equity fund is a new entrant this year in our list.
Performance of these large-cap SIP mutual funds
| Mutual Fund Scheme | 1yr | 3yr | 5yr | 10 Yrs |
|---|---|---|---|---|
| Mirae Asset Large Cap Fund | 13.7% | 8.4% | 13.8% | 13.5% |
| Axis Bluechip Fund | 19.7% | 14.7% | 15.0% | 12.5% |
| SBI Bluechip Fund | 16.3% | 7.6% | 11.2% | 11.8% |
| Canara Robeco Bluechip Equity Fund | 23.1% | 13.7% | 14.5% | 12.1% |
* Annualised returns
Who should invest?
Largecap mutual funds would invest in largecap / bluechip stocks and provide stability to your portfolio. If you are moderate to high risk investor and willing to invest for 8 to 10 years, you can invest in these best largecap mutual funds to invest in 2021 through SIP.
Best Midcap and Smallcap Mutual Funds to invest in 2021
We have filtered 5 mutual funds from this segment. Out of them 3 are already recommended by us last year. Axis Midcap and Axis Smallcap funds are new entrants this year in our list.
Performance of these Midcap/Smallcap SIP mutual funds
| Mutual Fund Scheme | 1yr | 3yr | 5yr | 10 Yrs |
|---|---|---|---|---|
| Mirae Asset Emerging Bluechip Fund | 22.4% | 9.9% | 17.3% | 20.1% |
| SBI Small Cap Fund | 33.6% | 4.4% | 15.6% | 18.9% |
| Kotak Emerging Equity Fund Regular Plan | 21.9% | 5.4% | 13.1% | 14.5% |
| Axis Midcap Fund | 26.0% | 13.2% | 14.8% | NA |
| Axis Small Cap Fund | 22.4% | 10.0% | 13.8% | NA |
* Annualised returns
Who should invest?
Midcap and smallcap mutual funds would tap opportunities in midcap/smallcap stocks. While there are many multibagger midcap stocks and smallcap stocks, these are risky too. If you are a high risk investor and willing to invest for 10+ years, you can invest in such funds. Moderate or low risk investors should stay away from such high risk mutual funds.
Best Flexicap Mutual Funds to invest in 2021 through SIP
We have filtered 3 flexicap mutual funds from this segment. Out of them 1 is already recommended by us last year. UTI Equity Fund and Parag Parikh Flexicap funds are new entrants in this year.
Performance of these Flexicap SIP mutual funds
| Mutual Fund Scheme | 1yr | 3yr | 5yr | 10 Yrs |
|---|---|---|---|---|
| Kotak Standard Multicap Fund | 11.8% | 7.5% | 12.8% | 12.6% |
| Parag Parikh Flexicap fund | 32.3% | 14.6% | 15.0% | — |
| UTI Equity fund | 31.6% | 15.0% | 14.9% | 13.0% |
* Annualised returns
Who should invest?
Flexicap mutual funds (erstwhile multicap funds) would invest across market cap. Such funds provide diversification to your portfolio. If you are moderate to high risk investor and willing to invest for 8-10 years, you can invest in these Flexicap / Multicap mutual fund schemes in 2021.
Best Hybrid Mutual Funds to invest in 2021 through SIP
Hybrid funds also known as balanced mutual funds. We have filtered 3 mutual funds from this segment. Out of them 2 are already recommended by us last year. Canara Robecco Equity Hybrid Fund is new entrant in this year.
Performance of these Hybrid / Balanced SIP mutual funds
| Mutual Fund Scheme | 1yr | 3yr | 5yr | 10 Yrs |
|---|---|---|---|---|
| SBI Equity Hybrid Fund | 12.9% | 8.6% | 11.1% | 11.8% |
| HDFC Hybrid Equity Fund | 13.4% | 5.8% | 10.6% | 12.3% |
| Canara Robeco Equity Hybrid Fund | 19.7% | 10.6% | 11.9% | 12.4% |
* Annualised returns
Who should invest?
Hybrid funds/ balanced funds would invest in equity and debt based on investment objective of the fund. The beauty of such funds is that while debt portion can provide stability, equity portion can provide growth in the fund. If you are moderate risk investor and willing to invest for 5+ years, you can invest in these Best Hybrid / balanced mutual funds.
How much should you invest in these funds?
I keep getting these kind of questions now and then saying what is an ideal mutual fund portfolio and which are the best mutual funds to invest for long term. This would depend on various factors. Here are a few tips that would help you to design your mutual fund portfolio. This is just an ideal mutual fund portfolio and one can fine tune them.
1) If you are young, willing to take risks (high risk taker) and invest for 20 to 30 years, you can consider the higher portion of mutual fund portfolio in midcap/smallcap, moderate portion in largecap/flexicap and hybrid portion. While there is no hard and fast rule, you can consider 50 : 25 : 25 (Midcap/Smallcap : largecap/flexicap : Hybrid fund).
2) If you are young or in 40’s, willing to take some risks (moderate to high risk taker) and invest for 10+ years, you can consider the moderate portion in all these categories of funds. Again, while there is no hard and fast rule, you can consider 30 : 40 : 20 (Midcap/Smallcap: large cap/flexicap: Hybrid fund).
3) If you are moderate risk taker / in 50’s and want to invest in 8-10 year tenure, avoid midcap/smallcap and consider your portfolio in other equity funds. Again, while there is specific rule, you can consider 40 : 60 (large cap/flexicap : Hybrid funds).
4) If you are a moderate risk taker, willing to invest for 5-8 years and want to balance your portfolio, invest in balanced mutual funds. You can also try an alternative option of investing in a combination of large cap/flexicap funds and debt funds. Another best way is to invest in balanced mutual funds.
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Sir,
I am 34 year old, unknown about Mutual funds. i read your blogs and searched about mutual funds. i want to invest lumsum amount for 3-5 yrs. please suggest me some mutual fund for Handsome return after 3-5 yr. and also suggest me i will diversify my lumsum amout into parts. or invest full amount into only one fund
Hello Ankit, good to hear about you. If you can invest for 5 years atleast, you can invest in balanced funds indicated in this article. Since markets are at peak investing lumpsum ins not a good idea. You can invest in lots for next 9 months to 1 year.
hi,
Suresh, I am 28 years old and looking to start and sip my risk appetite is moderate or slightly high I want to start with 2000/month and increase the amount in the future I am looking for long term 10 or more years I don’t have any big specific goals just looking to maximize the wealth what kind of fund should I go for and should I start with 2000 in one fund or allocate to multiple funds
Good to hear about you. Based on your risk appetite, you can go for largecap funds, flexicap funds and balanced mutual funds. You can consider funds from these categories indicated in this article
Sir,
I am 38 year old, unknown about Mutual funds. Recently read your blogs and searched about mutual funds. Now want to invest in mutual funds through SIP and consider “Parag Parikh Flexicap fund”. Please suggest any other option for me for a long period. Few amount I already invest in NPS and PF.
Good to hear about you Khushal. Parag Parikh Flexicap fund is good fund, you can invest. You have to invest in mutual funds based on your risk appetite and tenure. Since you want to invest in long term, you can pick-up few funds indicated in this article based on your risk appetite. If you are not able to pick-up for some reason, indicate your risk appetite (high risk or moderate risk), I can guide you further
Sir,
As earlier told not much knowledge about mutual funds. Although i think moderate or slightly high risk would be good for me. Therefore I indicate Flexicap fund and consider Parag parikh. It would be nice for me, if you advise some other option.
Got it. You can invest in largecap funds + multicap funds + balanced funds indicated in the article. You can invest through SIP. If you want to invest lumpsum, you can span such investments across 9-12 months as stock markets are at peak now