Top Mutual Funds to Follow in 2022

Chetan Bali   /   April 5, 2022

The year 2022 has been a roller coaster ride for a majority of investors. While January was tentatively negative, the bearishness became affirmative in February. And then, the last few days have been taking the graph on a downward spiral. Also, the small-cap index could show a significant stock-specific discomfort of increasing oil prices and a weak rupee. Read our blog to know about Few Mutual funds to follow before investment in 2022.

Despite the ups and downs faced by the market, a mutual fund is undoubtedly a popular way to invest in the market. In India, you can easily find thousands of mutual funds in 2022 to invest in. However, choosing one out of an array of options is not an easy option. Right from the time horizon of your objectives to the risk profile, there are plenty of things to be kept in mind.

Furthermore, top mutual funds in 2022 can be segregated based on the underlying assets, like gold, debt or equity, into varying categories, such as hybrid funds, debt mutual funds, and equity mutual funds.

In addition to large cap, mid cap and small cap funds, flexi cap funds and multi cap funds that can invest in stocks across the market are also popular among the investors. Equity Linked Savings Scheme (ELSS) is another popular equity fund category through which investors can invest in equity markets and get tax savings benefits under the section 80C of the Indian Income Tax.

So, if you are in search of the top mutual funds to buy in 2022, this post is here to help you out. We will look at the top large cap, mid cap, small cap, flexi cap, multi cap and ELSS schemes that you can invest in 2022.

List of Mutual Funds to Follow

This article will talk about equity mutual funds that invest predominantly in stocks of different companies. The most popular way to categorise equity mutual funds is based on the size of the companies, such as large cap companies, mid-cap companies and small-cap companies.

Here, we have included the funds’ direct plan and growth option. 

  • Large-Cap Mutual Funds in 2022

Large cap equity mutual funds invest in large cap companies are well-established companies and have a competitive advantage over other companies. The stock prices of these companies are also less volatile than mid cap and small-cap stocks in the short term.

If you wish to invest in some of the largest companies in terms of market capitalisation, here are some options of mutual funds in 2022 for you:

  • Axis Bluechip Fund

When it comes to investing in new mutual funds in 2022, this large-cap mutual fund scheme from Axis Mutual Fund will be perfect. It was launched back on 1-January-2013. This fund holds Rs. 34,069 worth of Assets Under Management (AUM) as of 31-December 2021.

Axis Bluechip Fund has given the highest return in the five-year category, with 17.73% and also a decent 17.48% returns over the three-year horizon.

Axis Bluechip Fund has invested mainly in technology, financial services, materials, and healthcare stocks.  While the fund carries a higher expense ratio of 0.47%, the attractive long-term performance makes up for the expense ratio.

  • LIC MF Large Cap Fund

Launched on 1-January-2013, this fund has Assets Under Management (AUM) worth Rs. 638 crores as of 31-December-2021. In the last one year, its returns were 20.93%, with an expense ratio of 1.29%.

As far as the investment is concerned, the fund has put a majority of its money into the automobile, energy, healthcare, technology and financial sectors.

  • Edelweiss Large Cap Fund

Another new mutual fund in 2022 that you can consider is Edelweiss Large Cap Fund. With an AUM of Rs. 309 crores, this medium-sized fund of its category has an expense ratio of 0.82%.

The fund has recorded returns of 18.47% in the last year. And, if you look back, its  five-year return was 15.06%. Financial to technology, consumer staples, energy, and communication sectors are some sectors in which the fund has invested.

  • Mid-Cap Funds

The next category of mutual funds to buy in 2022 that you can consider investing in is the mid-cap space. Here are some of the worthwhile options for you:

  • Kotak Emerging Equity Fund

Kotak Emerging Equity Fund holds AUM worth Rs. 17,380 crores. The fund offers an expense ratio of 0.47% and has given 25.88% of returns in the last year. The fund has also given returns of 23.54% and 16.64% over the three-year and five-year investment horizons.

The majority of its money has been invested in capital goods, materials, consumer discretionary, chemical sectors, and the financial sector.

  • PGIM India Midcap Opportunities Fund

PGIM India Midcap Opportunities Fund is one of the top-performing midcap funds over a one-year, three-year, and five-year period. As of writing, the fund is the number 1 midcap fund from a three-year investment horizon and comes second on a five-year horizon.  

It was launched on 11-November-2013 and has an AUM of Rs. 4360 crores of AUM. The fund has an expense ratio of 0.46%. Coming to the investments, the fund has put its money in technology, automobile, healthcare, financial, and capital goods sectors.

  • Quant Mid Cap Fund

The Quant Mid Cap Fund has given the highest returns of 48.46% among all the mid-cap funds in the last year. It ranks number 2 on a three-year returns chart, only next to PGIM India Midcap Opportunities Fund.

The fund holds Rs. 283 crores worth of assets as of 31-December-2021. In terms of the expense ratio, it stands at 2.62%. The majority of the fund’s investment is in consumer staples, metals and mining, construction, chemicals, and services sectors.

  • Small-Cap Mutual Funds in 2022

Moving on to the next category of top mutual funds, jotted down below are some of the small-cap funds you can consider investing into:

  • SBI Small Cap Fund

Came into existence on 1-January-2013, the SBI Small Cap Fund  holds AUM worth Rs. 10,962 crores as of 31-12-2021. It is a medium-sized fund of its category. The last year’s returns of this fund are 32.09%.

Most of the money of this fund is invested in metals and mining, chemicals, services, capital goods, and consumer discretionary sectors. And it offers an expense ratio of 0.76%.

  • Kotak Small Cap Fund

Kotak Small Cap Fund is another one you can consider putting your money in. This fund has Rs. 6660 crores worth of assets under AUM as of 31-12-2021. In the last year, the fund has had returns of 40.06%.

As far as its investments are concerned, the fund has put up money into capital goods, chemicals, metals and mining, materials, and consumer discretionary sectors. The expense ratio of this fund is 0.49%.

  • Multi-Cap /Flexi Cap Funds Funds

With multi-cap funds, the money is segregated into three parts of 25%, and each is invested into small, mid and large-cap funds. Flexi cap funds also invest in large cap, mid cap and small cap stocks. However, the fund manager of these funds have the flexibility to invest in a mix of these stocks as per as their requirements. So, for the sake of simplicity, we have combined both these fund categories.

Some of the best funds you can consider are:

  • Mahindra Manulife Multi-Cap Badhat Yojana

 This fund came into existence on 20-April-2017. It has Rs. 972 crores worth of AUM as of 31-12-2021. In the last year, its return was 37.84%.

Also, most of the money from this fund is invested in materials, automobiles, capital goods, technology and financial sectors. The fund holds an expense ratio of 0.55%.

  • Canara Robeco Flexi Cap Fund

Canara Robeco Flexi Cap Fund has existed for almost close to a decade. It was launched back on 1-January-2013. This fund has Rs. 6763 crores of AUM as of 31-December-2021.

The last year’s returns of the fund are 23.38%. A majority of its money has been put into the energy, healthcare, automobile, technology and financial sectors. The fund’s expense ratio is 0.57%.

  • UTI Flexi Cap Fund

Apart from holding Rs. 24,043 crores worth of AUM, in the last year, the fund has given 15.15% of returns.

Also, this fund has invested a majority of its money into a variety of sectors, such as materials, services, healthcare, technology, and finance. It has 0.93% of the expense ratio.

  • Equity-Linked Saving Schemes (ELSS)

If you choose to invest in the ELSS, you can effortlessly get relief in your taxes under Section 80C. However, it is important to note that these tax saving schemes come with a lock-in period of three years. It means that you won’t be able to redeem from these schemes before three years. It is true for systematic investments as well as each instalment is locked for three years.

Here are some of the best ELSS to look out for:

  • JM Tax Gain

The JM Tax Gain Fund Growth was launched back on 24-December-2007. It holds Rs. 64 crores of AUM and is a small fund of its category. In the last year, this JM Tax Gain fund has offered 20.42% of returns.

The fund has its money invested in materials, capital goods, automobiles, technology, and financial sectors. As far as the expense ratio is concerned, this fund offers 2.45%.

  • Axis Long Term Equity

This one was launched on 1-January-2013. Currently, it holds AUM worth Rs. 31208 crores. The last year’s return of this fund was 12.65%.

A majority of its money has been invested in the chemicals, healthcare, technology, services, and financial sectors. Its expense ratio is 0.77%.

  • Mirae Asset Tax Saver Fund

This ELSS mutual fund scheme was launched on 20-November-2015. The fund holds AUM worth Rs. 10802 crores. It is the medium-sized fund in the category. The last year’s return of this fund is 21.00%.

The fund has invested the majority of its money in automobile, healthcare, energy, technology, and financial sectors. And, it has an expense ratio of 0.55%.

The Best Way to Invest in Mutual Funds in 2022

Do you know what is the best way to invest in new mutual funds in 2022? The correct answer is it depends.

New Fund Offer: You can invest in the new mutual funds in 2022 during the New Fund Offer(NFO) period if you are confident about the fund and the fund management team behind it. In the past few months of 2022, we have seen mutual fund houses coming out theme-based  mutual funds. If that excites you, it would be better to keep allocating to these funds at a minimum.

Lumpsum: You can make a lumpsum investment if you have a large sum of money that you want to invest in equity mutual funds. Lumpsum investment can be beneficial if you are planning to stay invested for the long term. However, if you are not confident about investing a huge sum at one go, you can opt for SIP.

Systematic Investment Plan (SIP): SIP is the most popular way to invest in top mutual funds in a systematic manner. After setting up your SIP, the fund house will automatically debit the SIP amount to invest in your chosen mutual fund. You can invest in any mutual fund starting at just Rs. 500 per month. 

Wrapping Up

Investing in mutual funds is an important decision. There are several new mutual funds in 2022. However, it is a good idea to invest in a mutual fund with several years of track record. While the past performance doesn’t represent future returns, it can help us to understand the performance of the fund when the market was down.

When you look at the mutual funds to buy in 2022, it is important to look at the different characteristics of a mutual fund such as their long-term returns, AUM, fund manager among others before investing in these funds.

*Returns as on 28-Mar-2022

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