Investing in a mutual price range may be an effective manner to develop your wealth. But not all mutual budgets are created the same. If you don’t compare mutual funds thoughtfully, you would possibly grow to be investing in a scheme that doesn’t healthy your financial dreams, risk appetite, or funding horizon. In this newsletter, we’ll stroll you through why evaluating mutual finances topics, what key factors to assess, and how to select the top-appearing ones based totally on your investor profile.
Table of Contents
Introduction
Why examine mutual finances?
- Each mutual fund has one of a kind overall performance, danger, and price metrics.
- Investors regularly pick out based on returns alone, however that’s unstable — high returns could come with excessive volatility or high fee ratios.
- With various fund categories (fairness, debt, hybrid, index, ELSS), comparing allows you to build a balanced portfolio.
- Smart evaluation can enhance your long-time period returns and minimize pointless fees.
What Is a Mutual Fund?
A mutual fund pools cash from many traders and invests that cash in a different portfolio of stocks, bonds, or different securities. Professional fund managers run those price ranges, making choices approximately which securities to buy or sell. Investors buy “units” of a mutual fund, and the Net Asset Value (NAV) in line with the unit represents the price of each unit.
Why You Should Compare Mutual Funds Before Investing
- Risk vs Reward Trade-off: Returns alone don’t tell you the risk. Comparing helps assess risk-adjusted returns.
- Cost Efficiency: Expense ratios vary. A cheaper fund might outperform a costly one.
- Performance Consistency: Comparing 1Y, 3Y, 5Y returns shows consistency, not just a one-year spike.
- Fund Size Matters: AUM (Assets Under Management) affects liquidity and fund stability.
- Fund Manager Credibility: Past performance, tenure, and strategy matter.
- Category Suitability: Different investors need different categories — equity, debt, hybrid, etc.
Key Factors to Compare Mutual Funds
Here are the essential metrics you should evaluate when you compare mutual funds:
- Returns
- 1-year, 3-year, 5-year, and since-inception returns
- Annualized vs absolute return
- Expense Ratio
- Ongoing cost of managing the fund
- Lower expense ratio generally improves net returns
- NAV (Net Asset Value)
- The price per unit of the fund
- Helps to understand how expensive or cheap a unit is
- AUM (Assets Under Management)
- Size of the fund
- Larger AUM often means better liquidity, but very large funds can become unwieldy
- Fund Manager Performance
- Track record, strategy, consistency
- How long the manager has been managing the scheme
- Risk Level
- Riskometer, standard deviation, beta, Sharpe ratio
- Compare mutual funds on how volatile or stable their returns are
- Category Performance
- Compare within categories: equity vs debt funds, hybrid, index funds, ELSS
- Historical behavior of that category in different markets
- Exit Load / Liquidity
- If there’s a penalty for early exit
- Redemption terms
Top 10 Mutual Funds Compared Table
Here’s a sample comparison of 5 (not 10, due to data constraints) well-known mutual funds in India as of November 2025. This helps illustrate how to compare mutual funds based on key metrics.
| Name | Category | 1Y Return | 3Y Return (annualised) | AUM (₹ Cr) | Expense Ratio | Risk | Rating / Notes |
|---|---|---|---|---|---|---|---|
| Parag Parikh Flexi Cap Fund (Direct) | Flexi-Cap (Equity) | ~10.34% | ~21.87% | ₹1,25,800 Cr | ~0.63% | Very High | 5-star / well-rated |
| ICICI Prudential Large Cap Fund (Direct) | Large-Cap Equity | ~12.99% (1Y) | ~19.04% (3Y) | ~₹75,863 Cr | ~0.85% | Very High | Stable large cap fund |
| Nippon India Small Cap Fund (Direct) | Small Cap Equity | ~0.97% | ~23.11% (3Y) | ~₹68,969 Cr | ~0.63% | Very High | High growth potential but volatile |
| UTI Nifty 50 Index Fund | Index (Large Cap) | ~7.66% (1Y) | ~18–21% (5Y CAGR) | ₹23,249 Cr | ~0.19% | Moderate | Low-cost passive play |
| BHARAT Bond FOF – April 2031 (Direct) | Debt | ~8.7% (1Y) | ~8.4% (3Y) | ₹4,722 Cr | ~0.10% | Low-Moderate | Very low-cost debt option |
Note: These numbers were compiled from publicly available sources like Groww, ETMoney, ValueResearch, and official fact sheets to help you compare mutual funds. (Always check the fund house’s latest factsheet for the most current data.)
Compare Mutual Funds by Category
When you compare mutual funds, it’s often useful to group them by category. Different categories suit different investor goals.
Equity Funds
- Flexi-Cap / Multi-Cap: Funds like Parag Parikh Flexi Cap – can invest across large, mid, small cap → good for long-term growth.
- Large-Cap: Stable but potentially lower returns vs mid/small cap. ICICI Prudential Large Cap is an example.
- Small-Cap: High growth potential but high risk, e.g. Nippon India Small Cap Fund.
Debt Funds
- Focus on fixed income, bonds, FOFs (Fund of Funds). Lower risk than equity, but returns depend on credit risk, duration, and interest rates.
- Example: BHARAT Bond FOF – a debt fund that invests in bonds.
Hybrid Funds
- Combine equity + debt. Useful for moderate-risk investors. (Not in our top-5 table but important to compare.)
Index Funds
- Passive funds that track an index like Nifty 50 or Next 50. Very low expense ratio, less active risk.
- Example: UTI Nifty 50 Index Fund.
ELSS (Equity Linked Savings Scheme)
- Tax-saving funds (under Section 80C in India). Equity exposure + tax benefit. Performance varies; compare returns + lock-in.
SIP vs Lump Sum – Which Is Better & Why
When you compare mutual funds, you also need to decide how to invest: via SIP (Systematic Investment Plan) or lump sum.
- SIP (Systematic Investment Plan):
- Invest a fixed amount regularly (monthly/quarterly).
- Helps in rupee cost averaging — you buy more units when NAV is low, fewer when NAV is high.
- Reduces timing risk.
- Ideal for investors who don’t have a large lump-sum upfront or want disciplined investing.
- Lump Sum:
- Invest a large amount in one go.
- Potential for higher absolute returns if timed well, but more risk if market dips soon after.
- Better suited for investors who have surplus cash and a good sense of market timing (or a long horizon).
Which is better? It depends on your risk tolerance, cash flow, and time horizon. Many experts recommend a mix: use SIP for core investments + lump sum when you have excess cash.
Mutual Fund Comparison Tools (Best Free Tools for Investors)
To compare mutual funds effectively, you can use several online tools:
- ValueResearch Online: Comprehensive fund screener for NAV, AUM, returns, risk, expense ratio.
- ET Money: Easy-to-use app/screener, with comparisons of direct vs regular plans.
- Moneycontrol: Detailed factsheets, fund manager info, peer comparisons.
- Groww: Fund comparison tool, SIP calculators, and performance charts.
These tools help you filter by category, risk, expense ratio, returns, and more — making it easier to compare mutual funds that fit your profile.
Expert Recommendations Based on Investor Type
When you compare mutual funds, your ideal picks depend on your risk profile. Here are expert-style suggestions based on different investor types:
- Low-risk investor
- Prefer debt or conservative hybrid funds.
- Use a debt fund like BHARAT Bond FOF as part of your portfolio.
- Use SIP rather than lump sum to reduce timing risk.
- Moderate-risk investor
- Mix of equity (large-cap or index) + debt.
- Compare mutual funds like ICICI Prudential Large Cap + a safe hybrid fund.
- SIP-first strategy, with some lump sum during market dips.
- High-risk investor
- Focus on equity: flexi-cap, mid-cap, small-cap.
- Consider top-performing equity funds like Parag Parikh Flexi Cap or Nippon India Small Cap.
- Use a mix of SIP and lump sum — SIP for long-term, lumpsum when you have conviction.
FAQs
Q: How do I evaluate mutual price range?
To evaluate mutual budget, study key factors: returns (1Y, 3Y, 5Y), price ratio, NAV, AUM, threat degree, and fund supervisor. Use equipment like ValueResearch, Groww, or ET Money to clear out and examine funds primarily based on those metrics.
Q: Which mutual fund gives the highest return?
High returns are often visible in extra aggressive categories like small-cap or flexi-cap price range. For instance, Nippon India Small Cap Fund has delivered sturdy multi-12 months returns, but it comes with very high chances. Always compare returns throughout time frames and hazard degrees.
Q: What is the safest mutual fund?
“Safest” normally approaches low volatility and decreases chance. Debt funds (specifically splendid government or bond finances) or conservative hybrid funds are taken into consideration more secure. Also, large-cap fairness finances are relatively more secure than small-cap.
Q: What do beginners invest in?
Beginners have to begin by means of comparing mutual price range and the usage of SIPs in various equity or hybrid funds. Good alternatives consist of index funds (low value) or a flexi-cap fund. Make sure to check price ratio, beyond overall performance, and use SIP for regular investing.
Conclusion
Comparing mutual price range isn’t always elective — it’s vital. By taking the time to compare mutual funds across returns, hazard, price, NAV, AUM, and fund managers, you role yourself for smarter, extra green investing. Whether you’re investing via SIP or lump sum, or whether you are a low-, mild-, or high-risk investor, a clean assessment framework allows you to make informed choices.
Next step: Use tools like ValueResearch Online or ET Money to run your own comparison. Shortlist 3–5 funds, compare their metrics, and match them to your goals. Start with a SIP, monitor regularly, and adjust your portfolio as needed.
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