5 Top Performing Diversified Equity Mutual Funds You Can Choose to Invest in
You’ve searched for hours to find the top performing diversified equity fund and have taken equal hours to decide for how to select the most appropriate scheme that suits your investment horizon and risk appetite. But are still struggling to find the one that perfectly matches your requirements? This happens with most of the investors who are willing to invest, but they usually give up as they fail to find the correct method and schemes.
Before understanding the correct way of selecting the top diversified equity scheme, let us first take a close look at its definition and its top performing mutual funds.
What Are Diversified Equity Mutual Funds?
A diversified equity mutual fund invests in various companies irrespective of their size and sector. This diversified investment across multiple sectors minimizes the risk. The various sectors that contribute towards diversified equity are - Pharmaceuticals, IT, Banking, Real estate, Oil & Gas, FMCG, Telecom, etc.
According to the SEBI’s categorization and rationalization rules, the scheme categorization of diversified equity fund is said to make a minimum investment of 65% in equity and equity-related instruments of the total assets, while it is an open-ended scheme which invests across large-cap, mid-cap, and small-cap stocks.
It has been observed that over a long-term, diversified equity funds have given an outstanding performance in the market by extending good returns to the investors even during the time of inflation.
Best Diversified Equity Mutual Funds to Invest in
Our list of top performing diversified equity funds contains the ones that have delivered outstanding returns and have performed consistently well over a period.
- Kotak Standard Multi-Cap Fund - It is among the top performing diversified equity mutual funds which have played consistently well in the challenging market. The net asset value for Kotak Standard Multi-Cap Fund growth is Rs. 33.116 as on June 8, 2018. With assets under its watch amounting to Rs. 19,228 crore as on April 30, 2018, it has offered a return of 20.85% to its investors over a period of 5 years.
- Mirae Asset India Equity Fund (G) - It is one of the top performing diversified equity funds which has shown consistent performance in the past. The net asset value for its growth volume is Rs. 47.125 as on June 8, 2018. Mirae Asset India Equity Fund (G) has delivered a return of 21.07% to its investors over a period of 5 years, which is good enough for an investor to invest his money in it.
- SBI Magnum Multi-Cap Fund (G) - It is one of the recommended diversified equity mutual funds which is also known for its consistent performance. SBI Magnum Multi-Cap Fund (G) invests in equities and related instruments of companies spanning the entire market capitalization spectrum. The net asset value for its growth volume is Rs. 47.2335 as on June 8, 2018. It has offered a return of 20.83% to its investors over a period of 5 years.
- Reliance Multi-Cap Fund (G) - This scheme of Reliance Mutual Fund aims to invest in stocks across the sectors and industries where India's strong inherent potential is increasing and becoming visible to the world, in short, the ones that are driving our economy and whose fundamental future growth is influenced by ongoing economic reforms, FDI inflows, and infrastructural changes. The net asset value for Reliance Multi-Cap Fund (G) growth is Rs.90.47 as on June 8, 2018. It has delivered a trailing return of 17.09% to its investors over a period of 5 years.
- Aditya Birla Sun Life Equity Advantage Fund (G) - Satyabrata Mohanty manages this scheme of Aditya Birla Sun Life Mutual Fund. He puts his trust on the large and mid-cap companies and seeks to achieve long-term growth of capital at relatively moderate levels of risk. The net asset value for its growth volume is Rs. 413.83 as on June 8, 2018. Aditya Birla Sun Life Equity Advantage Fund (G) has shown exceptional performance in the past, thus delivered a return of 22.26% to its investors over a period of 5 years.
Steps to Select a Diversified Equity Mutual Fund
Now when you have come to know about a few of the top performing schemes of the diversified equity mutual fund, let us now see how you can select the best one for yourself. If you’ve been trying hammer and tongs and yet you are not able to choose the most appropriate scheme, then you can surely follow the steps as mentioned below -
- Differentiate Returns - Differentiating the returns of funds within the same category over a long-term perspective and a stock market cycle of boom and bust can help you in understanding the exact consistency and performance of the fund, which in turn will help you to select the best-diversified equity fund.
- Differentiate Returns Against Benchmark Index - Every fund has a benchmark index which gives an investor a point of reference for evaluating a particular fund’s performance. The funds that outperform their benchmark indices during market turbulence should be considered on priority for investment. But the performance and comparisons must be regarded as over long-term (4-5 years) at least.
- Differentiating Fund’s Performance- A fund should be evaluated over its past performance. It might be performing pretty well in the present, but its past record might show fluctuations in its performance. So, evaluating a fund against its performance can also be an important step to select the most consistent performing fund for investment.
- Risk Parameters- A fund must be evaluated against its risk parameters of volatility and risk-adjusted returns which are calculated by Standard Deviation and Sharpe Ratio, respectively. The selected fund must be less volatile than its peers and should offer high risk-adjusted returns.
While now that you have come to know about the various pros and cons of a diversified equity mutual fund to invest in the most appropriate fund, you shouldn’t wait too long to settle and save your money by investing in it. For any assistance in this regards, connect with the experts working at MySIPonline. We are easily available via call or email. You can invest in these top performing schemes via SIP mode as considering the period now, it is the preferable mode of investment in mutual funds.
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