As the Sensex rebounds and FIIs return, find out which mutual funds are delivering strong returns
India’s stock market is witnessing a robust recovery, with the Sensex reclaiming the 80,000 mark. This resurgence is attributed to renewed foreign institutional investor (FII) inflows, easing global trade tensions, and strong domestic macroeconomic indicators. In this context, mutual funds have emerged as a preferred investment avenue, offering diversified exposure and professional management.
Top Mutual Funds to Consider Amid Market Recovery
1. ICICI Prudential Value Discovery Fund – Direct Plan (G)
Category: Equity – Value
Assets Under Management (AUM): ₹49,131 crore
1-Year Return: 11.4%
3-Year CAGR: 21.0%
5-Year CAGR: 31.5%
Expense Ratio: 1.1%
This fund focuses on undervalued stocks with strong fundamentals, aiming for long-term capital appreciation. Its consistent performance across market cycles makes it a compelling choice for investors seeking value-oriented equity exposure.
2. HDFC Flexi Cap Fund – Direct Plan (G)
Category: Equity – Flexi Cap
3-Year CAGR: 15.63%
5-Year CAGR: 9.00%
Expense Ratio: 0.81%
With the flexibility to invest across market capitalizations, this fund adapts to changing market dynamics, balancing risk and return. Its diversified portfolio positions it well to capitalize on the ongoing market recovery.
3. SBI Bluechip Fund – Direct Plan (G)
Category: Equity – Large Cap
3-Year CAGR: 9.45%
5-Year CAGR: 1.71%
Expense Ratio: 0.82%
Investing predominantly in large-cap companies, this fund offers stability and steady growth potential. Its focus on established businesses makes it suitable for conservative investors aiming for consistent returns.
4. Parag Parikh Flexi Cap Fund – Regular Plan (G)
Category: Equity – Flexi Cap
3-Year CAGR: 28.37%
5-Year CAGR: 17.14%
Expense Ratio: 1.33%
Known for its value investing approach and global diversification, this fund has delivered impressive returns. Its prudent stock selection strategy positions it favorably in the current market scenario.
5. Motilal Oswal Midcap Fund – Direct Plan (G)
Category: Equity – Mid Cap
3-Year CAGR: 28.16%
Expense Ratio: 1.0%
Focusing on mid-cap stocks, this fund aims to capture the growth potential of emerging companies. Its strong performance indicates effective stock selection and portfolio management.
6. Nippon India Power & Infra Fund – Direct Plan (G)
Category: Equity – Sectoral
3-Year CAGR: 28.15%
Expense Ratio: 1.1%
Investing in the power and infrastructure sectors, this fund benefits from the government’s focus on infrastructure development. Its sector-specific approach offers targeted exposure to these growing industries.
7. Bandhan Small Cap Fund – Direct Plan (G)
Category: Equity – Small Cap
3-Year CAGR: 25.34%
Expense Ratio: 1.2%
Targeting small-cap companies, this fund seeks to capitalize on the high growth potential of emerging businesses. Its focus on under-researched stocks can lead to significant returns during market recoveries.
8. SBI Magnum Medium Duration Fund – Direct Plan (G)
Category: Debt – Medium Duration
3-Year CAGR: 7.5%
Expense Ratio: 0.6%
This debt fund offers a balance between risk and return, making it suitable for conservative investors seeking stable income. Its medium-duration strategy helps navigate interest rate fluctuations effectively.
9. HDFC Medium Term Debt Fund – Direct Plan (G)
Category: Debt – Medium Duration
3-Year CAGR: 7.2%
Expense Ratio: 0.7%
Investing in a mix of corporate bonds and government securities, this fund aims for regular income with moderate risk. Its diversified portfolio enhances credit quality and reduces volatility.
10. BHARAT Bond FOF – April 2031 – Direct Plan (G)
Category: Debt – Target Maturity
1-Year Return: 11.0%
3-Year CAGR: 8.0%
Expense Ratio: 0.1%
This fund of funds invests in BHARAT Bond ETFs, offering predictable returns aligned with the maturity date. Its low expense ratio and sovereign backing make it an attractive option for conservative investors.
Strategic Considerations Amid Market Recovery
With the market rebounding, investors are advised to align their mutual fund selections with their risk tolerance and investment horizons.
Large Cap Funds: Offer stability and are less volatile, suitable for conservative investors.
Flexi Cap Funds: Provide diversification across market capitalizations, adapting to market conditions.
Mid and Small Cap Funds: Higher risk but potential for substantial returns, ideal for aggressive investors.
Sectoral Funds: Target specific industries; suitable for those with a strong conviction in particular sectors.
Debt Funds: Offer regular income with lower risk, appropriate for conservative investors or those nearing financial goals.
Regular monitoring and periodic portfolio rebalancing are essential to align investments with changing market dynamics and personal financial goals.
