Mutual funds are becoming more and more popular day by day due to the host of benefits they offer along with attractive returns. Mutual funds are one of the few investment instruments which are professionally managed by a team of experts and which offer a diversified investment portfolio to its investors.
Here are the top 5 mutual funds in which you should invest in 2021 for long term wealth creation:
| Fund Name | 3 Year Return | 5 Year Return |
| SBI Small Cap Fund | 14.96% | 16.21% |
| Mirae Asset Emerging Bluechip Fund | 16.46% | 16.84% |
| Quant Tax Plan | 9.83% | 12.11% |
| Nippon India Gilt Securities Fund | 8.27% | 10.32% |
| ICICI Prudential Equity & Debt Fund | 10.04% | 10.14% |
(Data as on December 10, 2019; Source: Value Research)
1. SBI Small Cap Fund
| Returns | 1-year | 3-year | 5-year |
| SBI Small Cap Fund | 10.13 | 14.96 | 16.21 |
| S&P BSE Small Cap TRI | -4.82 | 3.41 | 4.38 |
SBI Small Cap Fund is an established and popular small cap fund which has been in the space for nearly 10 years now. The scheme has registered a highly impressive performance over the recent years. It outperformed its benchmark by a margin of nearly 10% and 14% over the last 3 years and 5 years respectively. The scheme has tried to balance its aggressive holding in small caps by allocating around 5.58% of its assets to cash and cash equivalents.
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2. Mirae Asset Emerging Bluechip Fund
| Returns | 1-Year | 3-Year | 5-Year |
| Mirae Asset Emerging Bluechip | 17.05 | 16.46 | 16.84 |
| S&P BSE 250 Large MidCap TRI | 10.61 | 13.15 | 9.22 |
Mirae Asset Emerging Bluechip Fund is a well-performing large and mid cap fund which was launched in July 2010. The scheme has given returns better than its benchmark during 3 year as well as 5 year periods. The scheme follows a balanced approach when it comes to the allocation of its assets across sectors as it has given a nearly equal weightage to cyclical as well as defensive sectors in its portfolio. It is a suitable mutual fund scheme for investors seeking capital appreciation over long-term periods.
3. Quant Tax Plan
| Returns | 1-Year | 3-Year | 5-Year |
| Quant Tax Plan | 7.83 | 9.83 | 12.11 |
| S&P BSE Sensex 50 TRI | 12.84 | 15.15 | 9.29 |
Quant Tax Plan is an Equity-Linked Savings Scheme (ELSS) which qualifies for a tax deduction of up to Rs. 1.5 lakh under section 80C of the Income Tax Act. The scheme has given an attractive return of 12.11% during the last 5 year period, beating its benchmark by a margin of more than 4%. It is a relatively aggressive scheme which has placed more of its assets in cyclical sectors than defensive ones. It is an ideal fund for those who are seeking capital appreciation along with tax-benefit.
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4. Nippon India Gilt Securities Fund
| Returns | 1-Year | 3-Year | 5-Year |
| Nippon India Gilt Securities Fund | 13.12 | 8.27 | 10.32 |
| CCIL All Sovereign Bond – TRI | 11.78 | 6.50 | 8.79 |
Nippon India Gilt Securities Fund is a nearly 11-year-old debt fund which invests in government securities across maturity. The scheme has outperformed its benchmark during both the above-mentioned 3 year and 5 year periods. Since the scheme invests all of its assets in government securities, it features a zero credit risk. It is a suitable scheme for investors who want to earn moderate risk for a relatively low risk quotient.
5. ICICI Prudential Equity & Debt Fund
| Returns | 1-Year | 3-Year | 5-Year |
| ICICI Prudential Equity Debt Fund | 10.64 | 10.04 | 10.14 |
| VR Balanced TRI | 12.18 | 13.00 | 8.53 |
ICICI Prudential Equity & Debt Fund is one of the oldest hybrid funds which made its debut in November 1999, nearly 2 decades ago. Being a hybrid fund, the scheme hedges its equity securities’ risk with its debt instruments’ security. The scheme has yielded good returns over the past 5 year period, outperforming its benchmark during both the period. It is a must-have mutual fund for investors who wish to invest in a hybrid fund for long-term growth of their capital.
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