Last Updated on 1 year ago by Raj Kumar
Top 10 best mutual funds for SIP
Finding out the best mutual funds for your SIP is probably the hardest thing you will find in your investment journey. The reason being there no single mutual fund which you can blindly trust. Every mutual fund has its pro and cons. Adding to complexity there are so many types of Mutual fund to consider.
In this article; we will try to understand what should look for in any mutual fund before you think of starting a SIP.
The first thing you should to know is how to select mutual funds in India . The below data will help you supplement in choosing the right fund for your SIP in mutual funds.
Before we get into SIP in mutual funds, let’s first understand what is SIP in a mutual fund?
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Page Contents
What is SIP in a mutual fund?
Full form of SIP is Systematic Investment Plan. SIP is an investment strategy offered by different mutual fund houses to the investors wherein, the investors can invest a fixed sum of money in regular interval in their mutual funds.
I see many people think SIP is a type of mutual fund where as SIP is nothing but just a method of investing in your preferred choice of mutual fund.
Th SIP term became famous after mutual fund houses stared campaign of mutual funds sahi hai. This platform encourages retail investors to invest their money in favourite mutual fund via SIP.
Top 10 best large cap mutual funds for SIP
Large cap mutual funds are considered as relatively safe as most of the large cap companies are blue chip companies having good track record of stock prices. Based on the performance of last 5 years here are the Top 10 best large cap mutual funds for SIP
| Mutual fund Scheme Name | AuM (Cr) | 1Y Returns | 2Y Returns | 3Y Returns | 5Y Returns |
| Canara Robeco Bluechip Equity Fund | 2,476.82 | 55.80% | 22.77% | 16.43% | 17.33% |
| Axis Bluechip Fund | 25,183.24 | 47.55% | 19.38% | 15.28% | 16.74% |
| Mirae Asset Large Cap Fund | 23,993.39 | 60.69% | 16.16% | 12.49% | 16.40% |
| ICICI Prudential Bluechip Fund | 26,082.64 | 59.93% | 15.73% | 11.18% | 14.80% |
| Edelweiss Large Cap Fund | 235.51 | 58.95% | 17.53% | 11.91% | 14.65% |
| Kotak Bluechip Fund | 2,411.04 | 61.87% | 18.99% | 12.86% | 14.40% |
| UTI Mastershare Unit Scheme | 7,734.48 | 60.48% | 18.12% | 12.23% | 14.22% |
| Nippon India Large Cap Fund | 9,828.19 | 65.53% | 10.72% | 9.09% | 14.12% |
| HDFC Top 100 Fund | 18,445.21 | 63.56% | 11.00% | 10.04% | 13.91% |
| IDFC Large Cap | 714.08 | 51.28% | 15.93% | 10.63% | 13.91% |
Top 10 best mid cap mutual funds for SIP
Mid cap mutual funds invest in mid cap companies. These are companies which have future potential to become a large cap company. The mid cap mutual funds are relatively riskier as compared to the large cap mutual funds as the companies are vulnerable to give negative returns . Here are the Top 10 best mid cap mutual funds for SIP.
| Mutual fund Scheme Name | AuM (Cr) | 1Y | 2Y | 3Y | 5Y |
| PGIM India Midcap Opportunities Fund | 1324.96 | 109.97% | 42.39% | 19.74% | 19.45% |
| Axis Midcap Fund | 10898.59 | 59.91% | 28.27% | 17.92% | 19.19% |
| Kotak Emerging Equity | 11430.03 | 86.21% | 28.53% | 14.42% | 18.25% |
| Edelweiss Mid Cap Fund | 1245.66 | 83.55% | 29.75% | 12.60% | 18.08% |
| Quant Mid Cap Fund | 42.12 | 102.03% | 40.68% | 21.37% | 17.64% |
| Taurus Discovery (Midcap) Fund | 67.47 | 66.03% | 26.48% | 12.05% | 17.56% |
| Invesco India Mid Cap Fund | 1424.65 | 65.28% | 24.95% | 14.29% | 17.35% |
| DSP Midcap Fund | 11248.89 | 61.66% | 24.41% | 12.12% | 17.27% |
| Nippon India Growth Fund | 9123.18 | 80.27% | 23.57% | 13.01% | 16.52% |
| Tata Mid Cap Growth Fund | 1152.49 | 72.33% | 25.32% | 14.42% | 16.37% |
Top 10 best small cap mutual funds for SIP
Small cap mutual funds are seen as the riskiest out of the all the mutual funds types. Small cap mutual funds tend give either extremely good returns or extremely bad returns depending on the time frame you are looking for. Here the Top 10 best small cap mutual funds for SIP
| Mutual fund Scheme Name | AuM (Cr) | 1Y | 2Y | 3Y | 5Y |
| Nippon India Small Cap Fund | 13085.04 | 115.45% | 30.82% | 13.12% | 20.99% |
| Kotak Small Cap Fund | 3712.14 | 128.02% | 38.67% | 17.13% | 19.92% |
| Axis Small Cap Fund | 4853.73 | 85.57% | 34.24% | 20.26% | 19.89% |
| L&T Emerging Businesses Fund | 6057.56 | 107.56% | 21.38% | 6.86% | 18.46% |
| HDFC Small Cap Fund | 10375.27 | 106.76% | 19.33% | 8.14% | 18.01% |
| ICICI Prudential Smallcap Fund | 2123.12 | 111.05% | 28.16% | 11.29% | 15.94% |
| DSP Small Cap Fund | 6688.88 | 105.53% | 28.81% | 10.37% | 15.01% |
| Union Small Cap Fund | 445.28 | 96.48% | 31.90% | 12.16% | 14.50% |
| Aditya Birla Sun Life Small cap Fund | 2589.4 | 107.75% | 18.89% | 3.42% | 12.85% |
| Franklin India Smaller Companies Fund | 6234.39 | 98.46% | 17.69% | 5.69% | 12.54% |
Top 10 best Tax saving ELSS mutual funds for SIP
We have handpicked some excellent tax saving mutual fund which has consistently given excellent returns over the last 5 years.
| Mutual fund Scheme Name | AuM (Cr) | 1Y | 2Y | 3Y | 5Y |
| Quant Tax Plan | 147.76 | 130% | 42% | 30% | 24% |
| Mirae Asset Tax Saver Fund | 7,251.32 | 90% | 24% | 20% | 23% |
| BOI AXA Tax Advantage Fund | 435.67 | 79% | 29% | 16% | 20% |
| Canara Robeco Equity Tax Saver | 2,044.06 | 74% | 23% | 19% | 19% |
| IDFC Tax Advantage (ELSS) Fund | 3,068.81 | 104% | 21% | 14% | 18% |
| DSP Tax Saver Fund | 8,176.47 | 80% | 21% | 17% | 18% |
| JM Tax Gain Fund | 52.47 | 78% | 19% | 15% | 18% |
| Kotak Tax Saver Scheme | 1,865.92 | 73% | 18% | 16% | 17% |
| SBI Long Term Advantage Fund – Series II | 29.65 | 92% | 25% | 16% | 17% |
| Motilal Oswal Long Term Equity Fund | 2,016.21 | 71% | 17% | 10% | 17% |
| Invesco India Tax Plan | 1,543.92 | 68% | 19% | 14% | 17% |
| Axis Long Term Equity Fund | 28,238.59 | 61% | 20% | 15% | 17% |
| PGIM India Long Term Equity Fund | 346.80 | 78% | 19% | 15% | 17% |
What is the best approach to start a SIP in mutual funds?
We have seen the Top 10 best mutual funds for SIP above. There is no guaranteed formula which can help you get better returns when investing in mutual funds. If you are thinking of starting a SIP in mutual fund then you have to assess your risk taking ability , financial condition and situation you are in your life.
Before you consider starting a SIP, I will strongly suggest you to get an emergency fund set up for you.
If you are young and have got a strong Financial back up then you can consider taking risks so you can think of allocating a sizeable amount as SIP in small cap mutual funds.
If you are a person who is not in favour of taking risks then you should stick to large cap mutual funds.
When you do SIP in a mutual fund then you must remember that SIP approach works best in long term. The benefit of SIP is that when you invest your money in regular interval of time then you are get benefits of investing in all cycles of market. If the market is down then you get more units of your mutual fund allocated. This in long term helps a lot to get excellent returns.
Mistakes to avoid while doing a SIP in a mutual fund
Many retail investor start SIP in a mutual fund with much enthusiasm but they start getting disappointed the moment they see negative returns in their investment.
When you start SIP in a mutual fund , you must understand that the SIP approach gives excellent returns over the long term period but most probably give negative/lesser returns in short term. Here are few mistakes you must avoid while doing SIP in a mutual fund.
- Do not start a SIP with an expectation that mutual fund will give positive returns always.
- Do not invest in too many mutual funds.
- Do not close your SIP because your SIP investments are showing negative returns
- Do not try to time the market while investing in SIP
- Do not sell your SIP investment if market has gone down a lot
Tips and tricks while finding out best mutual funds for SIP
While there are no proven tips and tricks in investment into mutual funds but here a few pointers how you can effectively use to find best mutual funds for SIP.
- Try to increase your SIP allocation if markets has more than 10% correction.
- Have a SIP in index funds as Index funds tend to give better returns over the long term.
- If market has given quick return then think of diverting your SIP to debt mutual funds( this is recommended only for people who actively track market movements)
FAQ on best mutual funds for SIP
What is the best date for sip?
As per research done by various mutual fund platform , best date for your mutual fund SIP – 1st of the month is best, followed by 5th and 10th dates.
These date recommendations are based on returns from a mid cap mutual fund in the past.
What if I miss one SIP instalment?
Its perfectly fine to miss your SIP in any mutual funds. SIP is only a method to invest in a mutual fund. If you skip a SIP in a mutual fund and don’t pay then it’s absolutely fine. You can again pay your SIP in the next instalment.
How to start SIP investment online?
You ca start your SIP in any mutual fund online. These days there are many apps like Groww, PayTM Money which offer direct mutual fund Investment from their platform free of cost.
You can select any mutual fund a decide a date for your SIP instalment. These apps will remind you on the SIP day to make the SIP contribution.
Is SIP better or lump sum?
Historically SIP has given better returns than lump sum Investment in mutual funds. When you do a SIP you are spreading your mutual fund investment over a time and get benefits of market up and downs.
When you invest your money as lump sum then if the market goes down from that point then you will end up losing your money however if you wish to take advantage of a market crash then it is advisable to invest lump sum money.
Can we change SIP amount every month?
Most of the mutual fund houses do not allow to change the SIP amount but you can always cancel/skip the current SIP and start a new SIP with your preferred Investment amount.
What is the lock in period for tax saver mutual funds?
When you invest in Tax saver / ELSS mutual fund then your contribution has a lock in of 3 years from the date of investment. So your each SIP contribution gets locked in for 3 years from the date of the SIP contribution.
is tax applicable on sip returns from mutual funds?
Yes your mutual funds are subject to tax. The tax calculation on SIP done on the date you have contributed to SIP amount and when you have redeem your SIP contribution.
For equity oriented schemes ; The Tax on SIP contribution is calculated as short term Capital gain tax if the redemption is done with 1 year of investment. If redemption is done after 1 year of SIP contribution it qualifies for long term capital gains tax.
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