Category: Mutual Funds

Difference Between Large Cap vs Mid Cap Mutual Fund

When it comes to investing in mutual funds, you will find multiple options at once. Each of these options offers you a different risk and return ratio. At the same time, the asset allocation for these funds differs as well. While some focus on equity or debt, there are a few funds that invest in both assets to offer a better balance.

But there are two types of funds that are usually considered more if you are looking for stable returns. These are the mid-cap and large-cap funds. Though both these invest in the equity, there are certain differences between them that you must know.

So, if you are new to investing and looking to know the details, then read this guide. Explore the mid-cap vs large-cap details and understand which of these is a better choice of investment for you.

What Is a Large-Cap Fund?

A large-cap fund is a type of equity mutual fund. It is the one that invests primarily in companies with a large market capitalization. These are the top 100 companies that are listed on the stock exchange. The main reason for the selection of these companies is their history and strong performance.

These companies have a proven record of performance, which makes them a better choice. But at the same time, these are the ones that have reached the top, hence at times you will find less potential for growth.

Key Features of Large Cap Funds

Stable Returns: The fund mainly focuses on the financially sound companies. This ensures that the investors get a steady long-term growth potential.
Lower Volatility: Most of the companies in the large-cap segment are not affected by market fluctuations. This makes them a safer choice when compared to mid and small-cap funds.
High Liquidity: Shares of large-cap companies are actively traded. This ensures that the trader can enter or exit the market easily at any time with no hassle.
Consistent Dividends: Many large-cap companies offer regular dividends. This is an additional income to the profits that the investors make.
Suitable for Long-Term Investors: These funds are better for those who invest for a long time. These funds offer stability and have comparatively low risk. Hence, if you invest with the aim of wealth creation, these are better.
SEBI Guideline: The large-cap funds must invest at least 80% of their assets in the top 100 companies by market capitalization.

What Is a Mid-Cap Fund?

A mid-cap fund is another type of equity mutual fund. This is the fund that invests in medium-sized companies. Now, if you see, these are the next best set of companies. As per market capitalization, they rank between 101 and 250 on the stock exchange.

These companies are still growing. They might be with the plans of expansion or with some innovative ideas. Hence, the potential is more. But at the same time, the risk is high as well. Any change in the market conditions can impact these companies greatly. This can lead to losses.

Key Features of Mid-Cap Funds

High Growth Potential: This is the fund that mainly invests in companies that are in their growing stage. This is why the fund can deliver higher returns over time.
Moderate to High Risk: Mid-cap stocks can fluctuate more. This can be due to market sentiment and business performance. This increases the overall risk associated with the investment.
Diversified Portfolio: Investing in these funds helps the investors benefit from exposure. This is mainly across emerging industries and sectors, which can be great.
Ideal for Long-Term Goals: These funds work best for investors with a longer investment horizon. The risk is high and so it is not good for conservative investors.
SEBI Mandate: Mid-cap funds are required to invest at least 65% of their assets in companies ranked from 101 to 250 by market capitalization.

Pros and Cons of Large Cap Funds

When investing in the large-cap funds, you focus on long-term growth and low risk. But there are other pros and cons to know. These are as follows:

Pros of Large Cap Funds

Companies with a proven record and performance are included.
Good for offering steady and reliable returns.
Considered to be the funds with low risk involved.
They are very liquid, which makes entry and exit simpler.
Better for conservative and long-term investors.

Cons of Large Cap Funds

Moderate returns as compared to other funds.
Growth potential is limited and low.
Performance may slow down during market rallies led by smaller stocks.

Pros and Cons of Mid-Cap Funds

Just like any other fund, investing in mid-cap funds also comes with certain risks and challenges. Knowing them can help you make the right investment call and ensure that you make good profits. So, here are the top ones to know.

Pros of Mid-Cap Funds

High growth potential based on future plans.
Allows for earning a higher rate of returns in a bullish market.
Provides for better diversification.
Chance to invest in innovative schemes and ideas.
Good option for investors seeking capital appreciation over time.

Cons for Mid Cap Funds

Quite volatile and risky in nature.
Recovery in case of a downturn is long.
Liquidity can be lower as mid-cap stocks are less frequently traded.

Large Cap vs Mid Cap Funds: Key Differences

Now that you know what the large-cap and mid-cap funds are, the next step is to find the difference. Knowing the difference will ensure that your investment calls are based on proper understanding and analysis.

So, here is the large-cap vs mid-cap difference that you should know.

Basis	Large Cap Funds	Mid Cap Funds
Market Capitalization	Invest in the top 100 companies with large market capitalization	Invest in companies ranked 101 to 250 by market capitalization
Risk Level	Lower risk due to stable and established businesses	Moderate to high risk as companies are still in the growth phase
Return Potential	Offer steady but moderate returns	Can deliver higher returns during favorable market conditions
Volatility	Less volatile and more stable during any downturns	More volatile and sensitive to market movements
Liquidity	High liquidity, as large-cap stocks are actively traded	Moderate liquidity since mid-cap stocks are less traded
Investment Horizon	Ideal for long-term investors seeking stability	Suitable for long term investors with a higher risk appetite
Suitable For	Conservative investors looking for steady growth	Aggressive investors aiming for higher capital appreciation

Which Is Better – Large Cap or Mid Cap Fund?

When it comes to selecting between the large-cap and mid-cap funds, there are various factors that you need to consider. Of these, the key ones include:

Profit potential
Patience of the investor
Risk taking capacity

So, if the investor prefers stability and low risk, then the large-cap is a better choice. The growth would be slow, but there will be stability. But if you prefer faster growth with moderate high risk, then you can go for the mid-cap funds as well. There will be fluctuations, and so it will require better monitoring as well.

In short:

Choose large-cap funds for safety and stability.
Choose mid-cap funds for growth and higher return potential.

Conclusion

Both large-cap and mid-cap funds are a great choice for investment. Where one offers you stability, the other gives you speedy growth. But when it comes to selecting anyone, it will be based on the choice of the investor themselves.

But if you are new to investing and are looking to develop a balanced portfolio, then ensure to include both. You must be wondering why? Well, combining both will offer you moderate risk and moderate returns. Where one will help you with wealth creation, the other will guide you to faster results.

But yes, as said before, it is important that you start right and with expert guidance. This is where you can opt for Pocketful. Open your account today. Get expert support as you need. Ensure you make the right investments through your journey.

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Frequently Asked Questions (FAQs)

What is a large-cap fund in simple terms?
A large-cap fund invests mainly in the top 100 companies with high market capitalization. It offers low risk and stable returns.
Which is safer, large cap or a mid-cap fund?
When you compare the two, the risk associated with large-caps is less. Hence, these are safer during all market conditions.
Can I invest in both large-cap and mid-cap funds?
Yes, combining both can balance risk and reward. You can benefit from the stability of large-cap funds and the growth of mid-cap funds at the same time.
Who should invest in mid-cap funds?
Mid-cap is good for growth-seeking investors. They are ready to take moderate risks. Also, they are the ones looking for high returns.
How long should I stay invested in large-cap funds?
If you are looking for a good return, then you must stay invested for 3-5 years minimum in large-cap funds.

November 15, 2025

Top 10 High-Return Mutual Funds in India

We all want our money to grow faster, don’t we? That is exactly why high-return mutual funds get so much attraction. They kind of give long-term growth that can move the needle for your financial goals, whether it is building wealth, saving for a house, or planning an early retirement.

Mutual funds, especially equity-based ones, have become one of the most popular ways for Indians to invest and grow their money over time. But here is the truth: not every fund performs equally well. Some manage to consistently outperform the market, while others fall short. In this blog, we will look at some of the best high-return mutual funds in India for 2025, understand what makes them move, and talk about how to pick the right ones for your goals.

What are High Return Mutual Funds?

High-return mutual funds are funds that have performed better than the market or have given higher-than-average returns over the years. But before getting an adrenaline rush from those big numbers, it is worth taking a closer look at what is really driving them. Most high-return mutual funds invest mainly in equities; in simple terms, they put your money into stocks of different companies. Stocks have the potential to grow much faster than traditional options like fixed deposits or bonds, especially if you stay invested for the long term. That is what makes them attractive for wealth creation.

But those higher returns do not come for free. Equity markets can be unpredictable, and prices move up and down all the time. So, while these funds can help your money grow faster, you also have to be comfortable with a bit of short-term volatility.

Let us have a glimpse at the types of mutual funds that often offer higher returns:

Large Cap Funds – Invest in big, well-known companies. They are relatively stable and great for long-term investors who want stable growth.
Mid Cap Funds – Invest money into mid-sized companies with strong growth potential. They create a good balance between risk and reward.
Small Cap Funds – Focus on smaller, emerging businesses. These can give you impressive returns, but only if you are comfortable with short-term ups and downs.
Sectoral or Thematic Funds – These target specific industries like technology, manufacturing, or infrastructure. When a sector does well, these funds can rise, but they can also fall quickly if trends change.
Flexi Cap or Multi Cap Funds – These invest across large, mid, and small-cap stocks, giving fund managers the freedom to chase opportunities during different market dynamics.

List of the Top 10 High-Return Mutual Funds in India

S. No	Funds	5 Yr Returns (%)	Expense Ratio (%)	Launch	Net Assets (Cr)
1	ICICI Prudential Infrastructure Fund	36.19	1.14	2005-08-31	8,231
2	HDFC Infrastructure Fund – Regular Plan	34.02	1.13	2008-03-10	2,585
3	Aditya Birla Sun Life PSU Equity Fund – Regular Plan	33.82	0.56	2019-12-30	5,532
4	Quant Small Cap Fund	35.29	0.71	1996-11-24	30,504
5	Franklin Build India Fund – Regular Plan	31.76	0.98	2009-09-04	2,947
6	SBI PSU Fund	33	0.85	2010-07-07	5,714
7	DSP India T.I.G.E.R. Fund – Regular Plan	32	0.66	2004-06-11	5,506
8	Motilal Oswal Midcap Fund – Regular Plan	33	0.7	2014-02-24	37,500
9	ICICI Prudential India Opportunities Fund	33	0.66	2014-02-24	32,669
10	Nippon India Power & Infra Fund	32	1	2004-05-08	7,325

Factors to Evaluate Before Investing

Every time you invest, it is important to pause and take a closer look because you will be putting in your hard-earned money. Below are a few simple points to keep in mind;

1. Risk and Return Go Hand in Hand

The promise of high returns is undoubtedly tempting, but remember, there is no free lunch in investing. Funds that can give big returns also tend to fluctuate more. Small-cap or sector funds, for example, can perform well in a bull market but may drop sharply when markets fall.

2. Look for Consistency

Anyone can have a lucky streak. Instead of getting carried away by one or two strong years, check how the fund has performed over 3, 5, or even 10 years. A good fund stays strong across different market conditions

3. The Fund Manager Matters

Think of the fund manager as the loco-pilot of your financial train. Their experience, strategy, and discipline play a big role in how well you are driven to your destination. Look for managers with a stable track record and a long-term approach.

4. Watch the Expense Ratio

Every mutual fund charges a small fee to manage your money, which is called the expense ratio. A slightly higher fee might not seem like a concern now, but over the years, it can quietly eat into your returns.

5. Time Is Your Best Friend

Equity mutual funds need time to show their growth. If you can stay invested for at least 5-7 years, you will give your money a chance to grow and recover from short-term market swings.

How to Choose the Right Fund

1. Decide Your Goal First

Ask yourself why you are investing in the first place. Are you saving for long-term wealth, retirement, or a down payment on a house? Once you know that, it becomes easier to pick a fund type that aligns with your purpose.

2. Know How Much Risk You Can Handle

Be honest here. If market swings make you anxious, large-cap or flexi-cap funds are safer bets. But if you do not mind some short-term ups and downs, mid- and small-cap funds can work well for you.

3. Look at the Fund’s Track Record

Don’t fall for last year’s best performers. Check how the fund has done over 3, 5, and 10 years. A good fund gives steady results across different market phases.

4. SIPs Are a Great Place to Start

If you are unsure about timing the market, go with a Systematic Investment Plan (SIP). It is one of the easiest ways to invest regularly, reduce volatility, and slowly build wealth over time.

Common Mistakes to Avoid

1. Chasing Past Performance

Just because a fund did great last year does not mean it will repeat that performance. Markets change, and so do trends. Your focus should be on consistency

2. Ignoring Risk

Do not choose a fund just because it gives big returns. If you are not comfortable with volatility, you might panic during market dips and sell at the wrong time

3. Switching Too Often

Jumping from one fund to another hurts your returns and stops compounding from doing its magic. Stick with your plan unless there is a reason to switch.

4. Not Reviewing Your Investments

You do not need to track your funds daily, but reviewing them once or twice a year helps. Make sure they are still aligned with your goals and performing close to their benchmarks, since your goals can also change with time.

5. Lack of Diversification

Putting all your money in one type of fund, say, all small-caps or all thematic funds, can backfire. Mix it up with a blend of large, mid, and small-cap funds to balance growth and stability.

Conclusion

High-return mutual funds can be a good option for building long-term wealth, but they are not magic. The truth is, the higher the possible returns, the more patience and discipline they demand. It is alluring to run after the top-performing fund of the moment, but the concept is to find one that fits your goals, risk level, and time frame. Start small, stay consistent, and let compounding play the game while you sit back and relax. SIPs are a great way to get started since they give you the benefit of rupee cost averaging. And most importantly, give your investments time; that is where the real growth happens.

Remember, investing is not about getting lucky. It is about being calm and steady. If you stay the course, the markets will surely reward you with returns.

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Frequently Asked Questions (FAQs)

Which mutual fund gives the highest return in India?
There is no single “best” fund for everyone. Small-cap and mid-cap funds often deliver higher returns, but as we know, high returns come with high risk. The right choice depends on your goals and time horizon,
Are high-return mutual funds risky?
A little, yes, most of them invest in stocks, so market ups and downs will affect them.
How long should I stay invested in a mutual fund?
It is suggested to invest for at least 5 to 7 years. That gives your money enough time to grow and recover from market dips while enjoying the benefit of compounding
Can I invest in high-return funds through SIPs?
Yes, SIPs are one of the smartest ways to invest. They help you stay disciplined and reduce the stress of timing the market.
How many mutual funds should I have?
You do not need a dozen of them. A mix of good funds across categories like large-cap, mid-cap, and flexi-cap is usually enough.

November 14, 2025

Best Defence Sector Mutual Funds in India

India’s defense budget increased rapidly in 2025 and this is why defense sector mutual funds have become a big topic of discussion among investors today. If you want to know which is the best defense mutual fund or what is the complete defense mutual fund list, then this guide is for you. Here we will understand how mutual funds investing in the defense sector can bring long-term strength to your portfolio and why mutual funds in the defense sector are being considered as an emerging opportunity nowadays.

What are Defence Sector Mutual Funds?

Defence Sector Mutual Funds are mutual funds that invest primarily in defence and related industries. These include companies involved in aerospace, weapon manufacturing, engineering, electronics and defence equipment. In simple terms, these are mutual funds investing in the defence sector that directly bet on companies whose business is related to defence.

These funds fall under the category of sectoral/thematic funds, which is recognized by SEBI (Securities and Exchange Board of India). This means that their investment is focused on a single sector, while diversified equity funds invest in many different industries. The main objective of these funds is to take advantage of the long-term opportunities provided by India’s growing defence needs and the Atmanirbhar Bharat initiative. It is important to note that since these are mutual funds in the defence sector, they also carry higher risk, and investors should always consider these funds from a long-term perspective.

Defence Sector Mutual Funds List 2026

Fund Name	Current Nav	AUM	6M Returns	1 year Return
Motilal Oswal Nifty India Defence Index Fund	₹ 10.25	₹3,703.3 Cr	27.23%	19.49%
HDFC Defence Fund	₹ 24.38	₹7,024.99 Cr	26.18%	11.67%
Aditya Birla Sun Life Nifty India Defence Index Fund	₹ 11.41	₹721.82 Cr	27.01%	18.97%
Groww Nifty India Defence ETF FoF Direct Growth	₹ 11.70	₹78.84 Cr	26.38%	16.95

(Data as on 15-10-2025)

1. Motilal Oswal Nifty India Defence Index Fund

This fund invests in leading companies in India’s defence sector. Its minimum SIP starts from ₹500 and the fund manager is Swapnil P Mayekar. The top holdings of this fund include Bharat Electronics Ltd. (20.6%), Hindustan Aeronautics Ltd. (20.46%), Solar Industries India Ltd. (11.54%), Bharat Forge Ltd. (11.50%), and Mazagon Dock Shipbuilders Ltd. (7.46%). Due to the strong growth of the defence industry and government support, this fund can be a good option for long-term investors.

2. HDFC Defence Fund

HDFC Defence Fund is managed by Priya Ranjan and it invests directly in defence and related capital goods companies. The fund’s key holdings includeBharat Electronics Ltd. (18.88%), Hindustan Aeronautics Ltd. (15.21%), Solar Industries India Ltd. (11.67%), Bharat Forge Ltd. (9.58%), and BEML Ltd. (8.83%). Apart from this, companies like Bharat Forge and Premier Explosives are also part of the portfolio. This fund is an ideal choice to capture direct growth of the defense sector.

3. Aditya Birla Sun Life Nifty India Defence Index Fund

This fund also focuses on defense sector companies and is managed by Priya Sridhar. The minimum SIP starts from ₹500. Bharat Electronics Ltd. (21.24%), Hindustan Aeronautics Ltd. (21.10%), Solar Industries India Ltd. (14.83%), Mazagon Dock Shipbuilders Ltd. (8.72%), and Cochin Shipyard Ltd. (6.01%). This fund covers key stocks in the defense industry and is a better option for investors looking for index-based options.

4. Groww Nifty India Defence ETF FoF Direct Growth

This fund is managed by Akash Chauhan and its SIP starts from just ₹500. This fund invests 100% in Groww Nifty India Defence ETF, i.e. it directly tracks the performance of the defense sector index. Investors who do not want to invest directly in ETFs can take advantage of the growth of the defense sector through this fund of funds (FoF). This is a new and simple option, especially for beginner investors.

Why Defence Sector Mutual Funds are Gaining Popularity

India’s Defence Investments at an all-time high : The Union Budget 2025–26 has allocated ₹6.81 lakh crore for the Defence sector, an increase of about 9.5% from last year and accounting for about 13.5% of the total budget. This huge investment has made defence sector mutual funds an attractive option.
Make in India + Export Expansion : India recorded an 18% growth in defence production in 2024–25, reaching ₹1.50 lakh crore. Also, defence exports reached ₹23,622 crore, a 12% year-on-year growth with the private sector contributing ₹15,233 crore. This provides a strong foundation for the “Make in India” and “mutual funds investing in defence sector” themes.
Geopolitical tensions and global demand : International conditions and security challenges have accelerated the pace of warfare technology and defence production. For example, manufacturers such as Solar Group are increasing production of 155 mm ammunition amid the Russia–Ukraine conflict.
Good performance of defense companies in the stock market : Hindustan Aeronautics Limited (HAL), Bharat Electronics Ltd (BEL), Bharat Forge and other defense companies have performed well in recent years, which is a positive sign for investors looking for the best defense mutual fund.

Advantages of Investing in Defence Sector Mutual Funds

The government’s Make in India initiative, growing defence exports, and cutting-edge technology innovations have made it attractive for investors in the long run. At such a time, investing in defence sector mutual funds can prove to be a wise move. These funds not only provide an opportunity to invest in companies that contribute to national security, but also strengthen investors’ portfolios.

Strong growth potential : India’s defence budget is constantly increasing and with it, new deals and projects are increasing in the industry. For example, companies like Hindustan Aeronautics, Bharat Electronics and Solar Industries are expanding rapidly. By investing in these funds, you can directly benefit from the growth of this sector.
Stable investment for the long term : The defence sector is not a short-term investment theme. This sector will grow in the long run, as there is continued government and private investment. Such funds provide investors with an opportunity for stable and long-term returns.
Diversification in portfolio : Through these funds, you can invest in both government (PSU) and private defense companies. This diversifies your investment and balances the risk.
Benefit from government policies and incentives : Increasing FDI limit by the government, promoting local manufacturing and giving policy incentives for the defense sector is continuously strengthening this sector. Investing in such an environment can prove to be beneficial in the long run.
Long term wealth creation : If investors stay patient for a long time, then these funds can give good capital appreciation and returns. Continuously increasing government and private investments strengthen the companies of this sector, giving long-term benefits to the investors.

Risks & Challenges Investors Should Know

Defence sector mutual funds are attractive, but it is important to understand the risks involved. If you want to invest in these funds, pay attention to the following five key aspects:

Risk of centralised investing : Defence funds often invest in just a few large companies, such as Hindustan Aeronautics and Bharat Electronics. If there is any instability in these companies, the entire fund can be affected. Therefore, it is important to understand that your money is concentrated on the entire sector, not individual industries.
Dependence on government policies : The defence industry is dependent on government policies and budgets. If the defence budget is reduced or new deals are delayed, the earnings of companies can be affected and your fund’s returns can also be low.
High valuation of stocks : Defence sector stocks have risen rapidly in the last few years. This means that their valuations (P/E or P/B) are high. In such a situation, future returns may be limited and prices may fall during market correction.
Global and geopolitical risks : The defense sector is affected by international events. Wars, agreements or international tensions can directly affect the orders and supply chain of companies. At such times, investors are likely to incur losses.
Investor advice : If you are a retail investor, invest only 5–10% of your portfolio in defense funds. Invest for the long term and be patient. This will balance the risk and increase the chances of getting better returns.

Read Also: Types of Mutual Funds in India

Conclusion

Defense sector mutual funds are a good option for those who want to earn good returns by investing for a long time. These funds invest primarily in large defense companies of India and strengthen the portfolio. Keep in mind, being a sector-focused investment, there are some risks and global events can have an impact.

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Frequently Asked Questions (FAQs)

What are defence mutual funds?
These are funds that invest in India’s defence and related sector institutions.
Who should invest in defence mutual funds?
These funds are ideal for investors with a long-term investment horizon and a moderate risk appetite.
What is the minimum SIP to start with?
Most funds have a minimum SIP starting at ₹500.
Are these funds risky?
Yes, as these are focused on a single sector, they come with higher risk.
Can these funds give high returns?
These can give good returns in the long term, especially when the sector players are performing well.

November 13, 2025

Best Silver Mutual Funds to invest in India

Silver has always had a special place in our lives, from family gifts to festive silver coins, but lately, it has been making headlines for a different reason. It is no longer just a glittery metal to own; it is gradually becoming a smart way to invest. With the rise of electric vehicles, solar panels, and new-age technologies, silver’s demand is increasing across the world.

The good news is that you do not need to buy physical silver to be part of this trend. Silver mutual funds let you invest in silver’s price movement, right from your phone or laptop.

In this blog, we will walk you through what silver mutual funds are, why they are becoming so popular, and the best ones to consider in India for 2026, along with a few simple points to look for before you invest.

What are Silver Mutual Funds?

Silver Mutual Funds are an easy way to invest in silver without buying or storing the metal for real. Instead of dealing with physical silver, these funds put your money into Silver Exchange Traded Funds (ETFs), which track the daily market price of silver in India.

So, when silver prices go up, the value of your investment rises too, and when they fall, your fund’s value may dip slightly. The big advantage is convenience, no worries about purity, safety, or storage. You get to benefit from silver’s price movements in a completely digital manner.

List of Best Silver Mutual Funds:

S. No	Funds	Minimum Investment	Expense Ratio (%)	Exit Load	6 Mth Ret (%)	1 Yr Ret (%)
1	Aditya Birla Sun Life Silver ETF FoF – Regular Plan	100	0.3	0.5	54.83	61.78
2	Axis Silver FoF – Regular Plan	5,000	0.16	0.25	51.1	59.7
3	HDFC Silver ETF FoF – Regular Plan	100	0.23	1	51.8	60.1
4	ICICI Prudential Silver ETF FoF	100	0.12	1	51.8	59.8
5	Kotak Silver ETF FoF – Regular Plan	100	0.14	0.5	52.2	60.6
6	Nippon India Silver ETF FoF – Regular Plan	100	0.27	1	52.53	60.5
7	SBI Silver ETF FoF – Regular Plan	5,000	0.3	1	53.2	61.5
8	Tata Silver ETF FoF – Regular Plan	5,000	0.2	0.5	49.5	58
9	UTI Silver ETF FoF – Regular Plan	100	0.15	1	51.8	59.6
10	Zerodha Silver ETF FOF Direct Growth	100	0.17	0	38.6	–

Read Also: Best Silver ETFs in India

Important Points to Consider before Investing

Before you decide to invest your money in silver mutual funds, you should quickly check these points mentioned below;

1. Prices Can Be Volatile

Silver prices move up and down quite a bit, they depend on global demand, industrial use, and even investor mood. There is no need to panic over short-term swings.

2. Returns Might Differ Slightly from Silver Prices

Since these funds invest in Silver ETFs, there can be a small difference between the actual price of silver and your fund’s return and this is called a tracking error.

3. Check the Expense Ratio

Every fund charges a small fee to manage your money. A lower expense ratio generally means more of your returns stay with you.

4. Think Long-Term

Silver is not about instant gains. Give your investment at least 3-5 years to even out the ups and downs.

5. Use It for Diversification

Silver works best as a small part of your portfolio, maybe 5 -10% to balance your exposure to equity and debt investments.

Read Also: How to Invest in Silver in India?

Conclusion

Silver mutual funds make it easy to add a bit of sparkle to your portfolio. As industries like electric vehicles, solar power, and electronics continue to grow, silver’s demand is only getting stronger day by day. However, silver prices can fluctuate depending on the global trends and supply. Think of it as a small but smart value addition. If you are looking for a simple, paperless way to benefit from silver’s long-term story, silver mutual funds are definitely worth a look in 2026.

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14	How to Compare Mutual Funds in India?
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Frequently Asked Questions (FAQs)

Are silver mutual funds safe to invest in?
They are safe, but remember silver prices can fluctuate. It is best to stay invested for a few years and manage those price swings.
What is better, a Silver ETF or a Silver Mutual Fund?
If you have a Demat account and are comfortable with trading, a Silver ETF is a good option. On the other hand if you prefer investing through regular mutual fund platforms, a Silver Mutual Fund is easier.
How much do I need to start investing?
Not much, You can start with as little as ₹500 through a SIP.
Can silver replace gold in my portfolio?
Both asset classes have different roles. It is better to own a bit of both for a balance.
How long should I stay invested?
Try for at least 3 to 5 years. Silver can be unpredictable in the short term, but over time, it generally gives better stability and growth.

November 12, 2025

How to Compare Mutual Funds in India?

The number of people investing in mutual funds in India is growing rapidly. By June 2025, the country’s total Assets Under Management (AUM) had reached approximately ₹74.41 lakh crore, reflecting the increasing confidence of investors. However, many people still choose funds based solely on returns. The truly smart approach is to compare each fund based on its performance, risk, and expenses. In this blog, we will learn how to properly compare mutual funds to make your investments better and safer.

Step 1–Define Your Investment Objective and Time Horizon

Choosing a mutual fund starts here. Often, we jump straight to “Which fund is performing well?”, but the real question is what are your investment goals and what is your investment horizon?

The right fund for you depends on these two factors:

Short-term goals (1 to 3 years) : If you are preparing for a major expense in the next few years such as a wedding, a trip, or building an emergency fund then Debt or Liquid Funds are generally better. These funds are not significantly affected by market fluctuations and provide stable returns.
Medium-term goals (3 to 5 years) : For investors who want to invest for 3-5 years, Hybrid or Balanced Advantage Funds are considered good options. They contain both equity and debt, which helps control risk while providing decent returns.
Long-term goals (5 years or more) : If your objective is long-term such as retirement planning, children’s education, or wealth creation then Equity Funds, Index Funds, or Flexi Cap Funds are good choices.

Step 2 – Compare Funds Within the Same Category

Whenever you compare mutual funds, the first thing to check is the category to which the fund belongs. Every fund has its own investment strategy: some invest in the stock market, some in bonds, and some in a mix of both. If you compare them all together, the results can be misleading.

Understanding SEBI’s Fund Categories

SEBI has categorized mutual funds into several main categories for the convenience of investors:

Equity Funds: These invest in the shares of companies and aim for long-term growth.
Debt Funds: These invest in government bonds, corporate debentures, and fixed-income securities.
Hybrid Funds: These invest in both equity and debt to try and provide balanced returns.
Solution-Oriented or Index Funds: These track a specific goal (such as retirement or child education) or an index (such as the Nifty 50).
Other Schemes: This category includes funds that don’t fit into the main equity, debt, or hybrid categories, often offering unique investment opportunities. Examples: Index Funds/ETFs, Fund of Funds (FoFs).
Commodity Funds:These funds invest in commodities like gold, silver, or other natural resources, often through ETFs. They provide a hedge against inflation and diversification beyond traditional asset classes. Examples: Gold ETF, Silver ETF, Multi-Commodity Fund.
International or Overseas Funds: These invest in foreign markets, giving Indian investors access to global companies and economies. They can be a good diversification tool but carry currency and geopolitical risks. Examples: Global Equity Fund, US-focused Fund, Emerging Market Fund.

There are also several types within Equity Funds

Equity funds are further categorized based on their size and strategy

Large Cap Funds: These invest in large companies like Reliance, HDFC Bank, Infosys, etc.
Mid Cap Funds: These invest in medium-sized companies, where the potential for growth is higher.
Small Cap Funds: These invest in small companies that can offer high returns, but also carry higher risk.
Sectoral/Thematic Funds: These focus on a single sector such as FMCG, Pharma, or IT.

The Right Way to Compare :

When you compare a fund, always compare it with funds from the same category.

For example, Axis Bluechip Fund can be compared with ICICI Prudential Bluechip Fund because both fall under the Large Cap category. But comparing Axis Bluechip Fund with HDFC Small Cap Fund would be an incorrect comparison because both have different investment strategies and risk levels.

Why is this step important ?

Each category has a different objective and risk profile.The objective of Equity Funds is to grow capital over the long term, while the goal of Debt Funds is to provide stable and secure returns. Comparing the two makes no sense. Therefore, always follow the rule of “compare within the same category.” This will allow you to accurately understand the fund’s true performance, stability, and value.

Read Also: Types of Mutual Funds in India

Step 3 – Check Historical Returns

When comparing mutual funds, most investors initially look at returns, but making a decision based on last year’s performance isn’t the right approach. True wisdom lies in understanding a fund’s ability to perform consistently, not just its performance at a single point in time.

Focus on 3, 5, and 10-Year Returns : The true picture of any fund emerges when you look at its average returns (CAGR) over different periods such as 3 years, 5 years, and 10 years. This shows you how the fund has performed over the long term and whether it has maintained stability through market fluctuations.
Consider Rolling Returns : Point-to-point returns can sometimes be misleading, as they only show results based on a fixed date. Instead, look at rolling returns—these indicate how a fund has performed on average over various time periods. This metric is more reliable because it includes both good and bad market cycles.
Don’t Fall for the Short-Term Performance Trap : Sometimes a fund may deliver very good returns in one or two years, but its long-term performance is weak. Investing in such funds can be risky.

Step 4 – Evaluate Risk Metrics

When choosing a mutual fund, it’s just as important to consider its risk level along with its returns. A fund’s performance only truly matters if it’s consistent and balanced. Below are some important parameters that indicate the fund’s actual performance:

Standard Deviation : This indicates how volatile the fund’s returns are. A lower standard deviation means the fund is more stable.
Sharpe Ratio : This measures how much return the fund has generated relative to the risk taken. The higher the ratio, the better.
Beta : This shows how much the fund’s returns fluctuate with market movements. If the Beta is greater than 1, the fund is more volatile than the market, and if it’s less than 1, it’s less volatile.
Alpha : This indicates how much better or worse the fund has performed compared to its benchmark. Funds with a positive Alpha are considered better.

Step 5 – Expense Ratio and Exit Load

Expense Ratio : This is the small annual fee that the fund charges for managing your money. In equity funds, it’s typically around 0.5 to 2%, and lower in debt funds. The lower the expense ratio, the higher your net return will be.
Direct vs. Regular Plan : In a Direct Plan, you invest directly, so there is no commission and the expenses are lower. In a Regular Plan, investing through an agent adds a commission, which slightly reduces your return.
Exit Load : If you withdraw money from the fund before the stipulated time, you have to pay a fee of approximately 0.5%-1%. This is to discourage short-term withdrawals from the fund.

Step 6 – Check Portfolio Holdings and Diversification

Before investing in any fund, it’s crucial to see which companies and sectors it’s investing in. If a fund is heavily reliant on just one sector, the risk increases.

A good fund always diversifies its investments across different sectors such as banking, IT, FMCG, and pharmaceuticals. This is called diversification. In this way, the fund remains stable even if one sector declines, and the returns are more reliable.

Step 7 – Fund Manager’s Experience and Strategy

The performance of every fund depends on who is managing it. Therefore, it’s crucial to examine the fund manager’s experience and track record. A good manager makes the right decisions at the right time and knows how to manage the portfolio in changing market conditions. If a manager has consistently delivered good results over a long period, they are considered trustworthy.

9. Step 8 – AUM (Assets Under Management)

AUM, or Assets Under Management, indicates the total amount of money invested in a fund. A large AUM generally suggests strong investor confidence and easier liquidity within the fund.

However, a very large AUM isn’t always advantageous. Especially in mid-cap and small-cap funds, a large AUM can make it difficult for the fund manager to invest effectively in smaller companies.

Step 9 – Benchmark and Peer Comparison

To understand a fund’s performance, it’s essential to compare it to its benchmark and other funds in the same category (peers). If a fund consistently delivers better returns than its benchmark, such as the Nifty 50 or Sensex, it indicates a strong strategy.

Peer comparison is equally important. By comparing your fund to other funds in the same category, you can understand how well your fund is truly performing.

Step 10 – Qualitative Factors & AMC Reputation

When choosing a mutual fund, you should consider not only the returns but also the reputation of the Asset Management Company (AMC) that manages the fund. A trustworthy AMC always acts in the best interests of investors and maintains consistency in its investment strategy. Companies with strong governance, transparent reporting, and a clear investment philosophy are the ones that consistently deliver good performance over the long term.

Read Also: Top Gold Mutual Funds in India

Conclusion

Choosing a mutual fund isn’t a race to see who’s offering the highest returns. The real question is which fund best suits your goals and risk tolerance. When you carefully understand and compare funds looking at their costs, performance, and stability the decision becomes much clearer. A proper comparison is key to making safe and smart investment choices.

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Frequently Asked Questions (FAQs)

What is the best way to compare mutual funds?
Compare funds within the same category and look at returns along with risk and expenses.
Should I focus only on returns?
No, along with returns, also understand the fund’s stability and risk.
What is a good expense ratio?
An expense ratio of less than 1.5% is considered better for equity funds.
How to know if a fund is performing well?
A fund is performing well if it consistently delivers better returns than its benchmark & you can check long term returns.
What is the meaning of benchmark in mutual funds?
A benchmark is the index against which a fund’s performance is measured, such as the Nifty 50 or Sensex.

November 5, 2025

Top Gold Mutual Funds in India

Putting money in gold is a timeless tradition in India, but buying the jewellery or coins can have some concerns like safety, purity, and high making charges that can reduce your profits. What if you could get all the benefits of owning gold in a smarter, simpler, and digital way.

This is where we see the Gold Mutual Funds in the picture, by investing in gold mutual funds, you can invest in gold digitally. These funds are the modern way to invest in gold, where the investors can own pure 24-karat gold on their phone or computer, without ever needing a locker. These mutual funds can be perfect for beginners and smart investors who want the safety of gold without the old-school hassles.

In this blog we will understand what a gold mutual fund is. Also, this blog will explain to you how gold funds work, why starting a gold SIP is a great idea, and list some of the best gold mutual fund options available in India today.

Understanding Gold Mutual Funds

How Gold Mutual Funds Work

A gold mutual fund takes money from investors and then collectively invests in gold, here a fund manager manages the investment and gold on behalf of the investors. By investing in gold like this you can actually buy real gold without the hassle to store the gold.

In India gold mutual funds work as a ‘Fund of Funds’ (FoF) meaning:

You invest your money in a gold mutual fund.
The fund manager collects money from all investors like you.
They use this money to buy units of a Gold ETF (Exchange Traded Fund).
This Gold ETF holds real, 99.5% pure physical gold in very secure vaults.

By investing using this method you get pure gold and the value of your investments move up or down depending upon the price of gold in the market.

Read Also: Best Gold ETFs in India

Top 10 Gold Mutual Funds in India

Fund Name (Direct Plan – Growth)	AUM (Rs.Cr)	Expense Ratio (%)	1-Year Return (%)	3-Year Return (% p.a.)	5-Year Return (% p.a.)	Minimum SIP Amount (Rs.)
Nippon India Gold Savings Fund	4131	0.13	53.5	33.2	17.7	100
HDFC Gold Fund	6,329	0.18	54.3	33.3	18.01	100
SBI Gold Fund	7,033	0.10	53.7	33.3	18.03	500
Axis Gold Fund	1,557	0.17	53.0	33.04	17.94	100
Kotak Gold Fund	4153	0.16	53.75	33.18	17.9	100
ICICI Prudential Regular Gold Savings Fund	3,305	0.09	53.07	33.03	17.85	100
Aditya Birla Sun Life Gold Fund	909	0.20	53.55	33.50	18.08	100
DSP Gold Fund	194	0.66	52.47	N/A	N/A	100
Invesco India Gold Fund	244	0.10	51.85	32.84	17.75	500
Quantum Gold Fund	300	0.04	53.96	33.50	17.90	500

Data as of October 24th 2025

1. Nippon India Gold Savings Fund

This is the biggest gold fund in India and is also one of the oldest funds in India. Nippon gold fund gives customer returns that are closely matched to the performance of its underlying ETF, the Nippon India ETF Gold BeES.

2. HDFC Gold Fund

This is considered to be one of the most trusted fund houses of India, this fund invests in units of the HDFC Gold ETF. If you are looking for a reliable fund for your gold investments, this is the most popular choice.

3. SBI Gold Fund

This is the largest AUM in the gold funds category, which is backed by India’s most trusted bank, State Bank of India. This gold fund provides returns that correspond to the SBI Gold ETF.

4. Axis Gold Fund

Here, the fund invests in the Axis Gold ETF that copies the performance of physical gold. It allows investors to start investing in small SIP amounts.

5. Kotak Gold Fund

In this gold fund the returns are generated by investing in units of Kotak Gold ETF. This also acts as a diversified fund that combines gold and silver together to give broader precious metal exposure to the investors.

6. ICICI Prudential Regular Gold Savings Fund

This fund has the lowest expense ratio in this category and the fund generated its returns by investing in ICICI Prudential Gold ETF, making it cost-effective for the new investors.

7. Aditya Birla Sun Life Gold Fund

Here the returns are tracked based on the performance of Aditya Birla Sun Life Gold ETF, which offers another solid option from a well-known fund house.

8. DSP Gold Fund

Here the investment is done by investing in units of DSP Gold ETF and the returns are generated by this. For investors it is a simple way to invest in gold and diversify your portfolio.

9. Invesco India Gold Fund

In this gold fund the performance of Invesco India Gold ETF is tracked to get returns, it has a straightforward option for investors seeking to track gold prices.

10. Quantum Gold Fund

This fund invests in units of the Quantum Gold ETF and also has one of the lowest expense ratio compared to others which helps in cutting down the cost of investing and making increased profits.

Now that we have gone through some of the Top Gold Funds in India you might be thinking how can you invest in these gold mutual funds but platforms like Pocketful make this extremely simple for the investors as they can search for different gold mutual funds, complete their KYC digitally and start investing in different gold SIPs or even invest a lump sum amount. Pocketful gives a user-friendly interface to its users making investing in gold much easier.

Read Also: Best Gold Stocks in India

Benefits of Investing in Gold Mutual Funds

1. Simple & Secure Investment

By investing in these gold mutual funds investors don’t need to take on the headache of storing the gold safely. Here the fund house takes care of storing the gold in highly secured vaults; investments are stored in a digital format safely, making them safe from theft.

2. Diversified Portfolio

Gold mutual fund investments can help the investors in diversifying their portfolio. During the stress period, when the stock market might perform poorly, these gold investments can help in stabilizing one’s portfolio. This helps in protecting your overall portfolio during uncertain times.

3. Protection from Inflation and Market Volatility

It saves the investors from the inflation, as during inflation the price of commodities goes up and the value of money goes down. Gold has acted as an asset that has been guarded during inflation times. It is witnessed that when the currency depreciates during inflation, the price of gold rises helping the investor protect their wealth.

4. High Liquidity and Convenience

If you require cash instantly, selling the physical gold can be a challenge in terms of buyers, current price of the gold and even the making charges as you may not get the fair price. But buying these gold mutual funds can sell your units on any business day and get the money directly in your bank account within a few days. The process is transparent and hassle-free.

Factors to Consider Before Investing

Fund Performance History: Investors shall look for how funds have performed over the last 1, 3, and 5 years, as it helps in showing you how consistently it has tracked the price of gold. Though the previous performance doesn’t predict the future, it helps the investors in tracking the record of the fund.
Expense Ratio: Think of it as a service charge that is levied annually by the fund manager to manage your investments. A small difference in the expense ratio can affect the investor’s profit, so one should always look for the expense ratio and prefer a lower ratio.
Asset Under Management (AUM): This is a collective total amount that all the investors have put into the specified fund, here a large AUM shows the trust of investors. A good AUM also means that the fund has liquidity meaning you can easily buy or sell the units.
Tracking Error: This helps in telling the investors if the fund is working properly or not as this is used to track the performance of gold price in the actual market. Investors shall look for lower tracking error as this means that the return on your investment is very close to the actual gold returns.
Fund Manager’s Experience: While most gold funds are passively managed (they just follow the underlying ETF), it’s good to invest with a fund house that has a long history and trusted reputation in the industry. This adds a layer of reliability to your investment.

Conclusion

Investing in gold has changed for the better. You no longer need a large sum of money or a bank locker to own this precious metal. Gold mutual funds offer a simple, affordable, and smart way to add the stability of gold to your investment portfolio.

One should think of them as a long-term investment that protects your wealth, fights with rising inflation and brings diversification to your portfolio. You should be clear about the future goals that you want to meet and make the decision accordingly.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	A Guide To Investing In Gold In India
2	How to Invest in Gold ETF
3	What is Gold ETF? Meaning & How to Invest Guide
4	Top 10 Reasons to Invest in Gold
5	Best Silver Stocks in India
6	Digital Gold vs Gold ETF: Which is Better?
7	Mutual Fund vs ETF. Are They Same Or Different?
8	Sovereign Gold Bonds vs. Gold ETF: Which is a Better Investment?
9	Gold BeES vs Gold ETF: Meaning, How It Works, Taxation
10	Best ETFs in India to Invest

Frequently Asked Questions (FAQs)

What is the main difference between a Gold Fund and a Gold ETF?
To buy or invest in a gold ETF you need to have a Demat account but to invest in Gold Funds (which are funds of funds) you can directly do it from your bank account and there is no requirement for a Demat account.
Do Investors need a Demat account to start a Gold SIP?
No, to invest in Gold SIP you don’t require a demat account you can start a Gold SIP with just your bank account after completing your KYC.
How are Gold Mutual Funds taxed?
Gold mutual funds are taxed like non-equity or debt funds, if the units are sold within 3 years then the profit is added to your income and taxed according to your tax slab.
What is the minimum amount I can invest?
Most gold mutual funds allow you to start a SIP with as little as Rs.100 or Rs.500 per month, making gold investing accessible for everyone.
Shall I invest a lump sum amount or start a SIP in a Gold Fund?
SIP (Systematic Investment plan) helps in investing a fixed amount regularly whereas a lump sum is a one-time investment that you can consider if you have a large amount of money ready, so look according to the funds availability and your future goals.

October 24, 2025

Best Money Market Mutual Funds in India

In 2025, when interest rates are changing rapidly and the need to access cash could arise at any time, many people are wondering where to park their short-term savings. Bank FDs no longer offer the same returns as they once did and often come with lock-in terms. It’s time to look at the best money market mutual funds; they’re safe, readily withdrawable, and have the potential to deliver better returns than a bank savings account or FD. In this article, let’s explore the best money market funds in India in 2025, how to choose them, and how they can be a smart addition to your investment strategy.

What Are Money Market Mutual Funds?

Money Market Mutual Funds are a type of debt mutual fund that primarily invest in high-quality short-term (one year or less) debt securities. The objective of these funds is to preserve capital and provide stable, predictable returns, while also providing investors with high liquidity, meaning easy access to funds.

Where do Money Market Funds Invest?

Money Market Funds include only short-term (up to 1 year maturity) and low-risk instruments in their portfolios.

These primarily include:

Treasury Bills (T-Bills): Short-term bonds issued by the government, which are considered the safest.
Commercial Papers (CPs): Debt instruments issued by corporate entities for short-term borrowing.
Certificates of Deposit (CDs): Short-term certificates of deposit issued by banks.
Tri-Party Repos (TREPS) and Cash Equivalents: These help maintain the fund’s liquidity.

Best Money Market Mutual Funds in 2026

S.No	Fund Name	AUM (Rs Cr)	3 Years Return (%)	5 Years Return (%)	Current NAV
1	Tata Money Market Fund	₹38,807.85	7.85%	6.30%	₹4911.57
2	HDFC Money Market Fund	₹37,139.08	7.51%	6.06%	₹5380.91
3	ICICI Prudential Money Market Fund	₹34,019	7.57%	6.07%	₹387.19
4	Kotak Money Market Fund	₹32,820.86	7.52%	6.10%	₹4581.39
5	Aditya Birla Sun Life Money Manager Fund Direct-Growth	₹26,757	7.57%	6.29%	₹382.62
6	Nippon India Money Market Fund	₹23,246	7.59%	6.16%	₹4235.20
7	UTI Money Market Fund	₹18,862	7.60%	6.16%	₹3146
8	Axis Money Market Fund	₹18,086	7.55%	6.11%	₹1460.25
9	Bandhan Money Market Fund	₹12,247	7.05%	5.47%	₹41.11
10	HSBC Money Market Fund	₹4,358	7.24%	5.60%	₹26.89

(Data as of 16 Oct 2025)

1. Tata Money Market Fund

Tata Money Market Fund, managed by Tata Asset Management, was launched on March 15, 1994. Its objective is to provide investors with stable returns and high liquidity with low risk. Under the management of Amit Somani, the fund size has reached ₹38,808 crore. Its portfolio is safe and diversified, with key holdings such as HDFC Bank Ltd, Bank of Baroda, SIDBI, Union Bank of India, The Federal Bank Ltd This makes it a strong choice among the best money market mutual funds of 2025.

Fund details :

Min SIP	Min Investment	Fund Manager
₹500	₹5,000	Amit Somani

2. HDFC Money Market Fund

HDFC Money Market Fund is a good option for those looking to keep their money safe for a short period of time. This fund was launched on December 10, 1999, and is managed by HDFC Asset Management Company. HDFC AMC is considered one of the most trusted companies in India, so it’s easy to trust this fund.

It has a corpus size of approximately ₹37,139 crore, and its investments are mostly in short-term bonds of banks and government institutions. Its portfolio includes strong institutions like CDs of SIDBI, Bank of Baroda, NABARD, Union Bank, and Canara Bank. All this makes it a reliable and balanced money market fund.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹100	Praveen Jain

3. ICICI Prudential Money Market Fund

ICICI Prudential Money Market Fund is one of those funds that doesn’t let money get stuck anywhere. Meaning, if you want your money to remain safe but get slightly better returns than a bank account, this fund fulfils that need well. It is managed by ICICI Prudential Asset Management, which has been a trusted asset in the market since the 90s. The fund was launched in 1993 and today its size is around ₹34,019 crore. The portfolio is well balanced; with the remaining holdings in strong institutions like Reserve Bank of India; National Bank For Agriculture & Rural Development (NABARD); HDFC Bank Ltd; Punjab National Bank; Indian Bank. This is why this fund provides steady returns without taking on too much risk.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹500	Manish Banthia

4. Kotak Money Market Fund

Kotak Money Market Fund is one of those funds that combines both stable returns and reliability. It is managed by Kotak Mahindra Asset Management Company and was launched on August 5, 1994. Its objective is clear: to keep your money safe while also providing slightly better returns than banks. The fund’s corpus is approximately ₹32,820 crore, reflecting investor confidence. Its portfolio is well-balanced and diversified. It includes Tri-Party Repo, ICICI Securities, 364‑Day Treasury Bill, 5.15% GOI, and Punjab National Bank.

Short-term bonds from reputable institutions like Canara Bank, HDFC Bank, and Axis Bank are also part of the portfolio.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹100	Deepak Agrawal

5. Aditya Birla Sun Life Money Manager Fund

Aditya Birla Sun Life Money Manager Fund is considered one of those funds that balances both safety and stable returns. It is managed by Aditya Birla Sun Life Asset Management Company and was launched on September 5, 1994. This fund is ideal for investors who want to park money for a short period but expect better returns than a bank account. The fund has a corpus of approximately ₹26,757 crore and a strong portfolio. It includes trusted institutions like Canara Bank, Bank of Baroda, IDBI Bank, Kotak Mahindra Bank And 5.15% Government Stock 2025, (09-Nov-2025) and 182 Days Treasury Bill (1.83%) provide further stability.

Fund details :

Min SIP	Min Investment	Fund Manager
₹1,000	₹1,000	Kaustubh Gupta

6. Nippon India Money Market Fund

The Nippon India Money Market Fund is an old and trusted fund. It’s managed by Nippon India Asset Management and has been in operation since 1995. Its sole purpose is to provide risk-free, short-term, secure investment that earns decent interest and allows for quick withdrawal if needed. It now has a corpus of over ₹23,000 crore, and most of its investments are in short-term bonds of banks and government institutions, such as Canara Bank, Kotak Bank, NABARD, Axis, IndusInd, and HDFC Bank all with a share of approximately 1.5% to 2.5%. A portion is also held in Tri-Party Repo to maintain liquidity. Overall, this fund is suitable for those who are risk-averse but want their money to perform better than a bank account.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹500	Vikash Agarwal

7. UTI Money Market Fund

The UTI Money Market Fund’s strengths are its simplicity, ease of understanding, and reliability. It’s managed by the UTI Asset Management Company and has been in the market since 2002. Its purpose is simple: if someone has spare money for a few months, they should invest it in a place where they can withdraw it immediately if needed, while still earning slightly higher returns than a bank account. Its size is around ₹18,800 crore. Most of the funds are invested in short-term bonds of government and banking institutions. It holds stakes in major institutions like NABARD, Indian Bank, Axis Bank, and HDFC Bank, along with a small portion in 364-Day Treasury Bills. This makes it stable and reliable. Simply put, this fund is ideal for those who are risk-averse but want their money to “work” a little.

Fund details :

Min SIP	Min Investment	Fund Manager
₹500	₹500	Amit Sharma

8. Axis Money Market Fund

Axis Money Market Fund is one of those funds that offers reliable, stable returns. It is managed by Axis Asset Management Company and was launched on January 13, 2009. Its objective is simple to provide a safe investment option for the short term, where the money is neither at risk nor idle. It has a corpus size of around ₹18,086 crore and a well-balanced portfolio. Most of the investments are in short-term instruments of banking and government institutions. Major holdings include HDFC Bank Ltd., Canara Bank, Small Industries Development Bank of India Ltd., HDFC Bank Ltd., and Kotak Mahindra Bank Ltd.

Fund details :

Min SIP	Min Investment	Fund Manager
₹1,000	₹5,000	Devang Shah

9. Axis Money Market Fund

Bandhan Money Market Fund is a fund that focuses on safety, stability, and reliability. It is managed by Bandhan Asset Management Company and was launched on November 20, 1999. It is specifically designed for investors who want to keep their money safe for a few months but expect slightly better returns than bank returns. The fund has a corpus of approximately ₹12,247 crore and a balanced and prudently constructed portfolio. It comprises high-quality papers from both the government and banking sectors. Key holdings include safe-haven securities like 182 Days Treasury Bill, SIDBI, Axis Bank, Canara Bank, NABARD, and HDFC Bank.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹100	Brijesh Shah

10. Axis Money Market Fund

The HSBC Money Market Fund is a fund that maintains the right balance of safety and stability. It is managed by HSBC Asset Management Company and was launched on December 12, 2001. Its focus is on short-term investments making it a good option for those who want to keep their money safe for a few months and expect better returns than a savings account. The fund’s size is approximately ₹4,358 crore and its portfolio is well-diversified. It includes both government and corporate short-term instruments. Key holdings include safe institutions like NABARD , Indian Bank , Mindspace Business Parks REIT, Bank of Baroda, Bharti Telecom, and Bajaj Auto Credit . Treasury bills (approximately 6.7%) provide additional stability and liquidity to the fund.

Fund details :

Min SIP	Min Investment	Fund Manager
₹1,000	₹5,000	Mahesh Chhabria

Risks & Challenges in Money Market Mutual Funds

Interest Rate Fluctuation : Money market funds are considered safe, but fluctuations in market interest rates can slightly impact their returns. Especially when rates rise suddenly, the fund’s net asset value (NAV) may fall slightly.
Credit Risk : Most funds invest in AAA-rated or government securities, but if a corporate bond or commercial paper defaults, there is a potential for loss. Therefore, it is important to understand the fund’s holdings.
Liquidity Risk : These funds are generally very liquid, but sometimes, when there is a sudden liquidity shortage in the market, the funds may face difficulty selling their holdings. During such times, returns may be slightly affected.
Short-Term Horizon Limitation : Money market funds are not intended to generate long-term returns. These are only suitable for short-term investments, such as 3–12 months. Long-term investors expecting high growth may be disappointed.
Taxation Impact : After 2023, the indexation benefit on debt funds has been eliminated. This means that any earnings from money market funds will be taxable according to your income slab. This means that investors in higher tax brackets may see slightly lower net returns.

Read Also: Top 10 Fund Managers in India

Conclusion

If you’re looking to keep your money safe for a short period of time and want it to perform better than sitting in a bank account, Money Market Mutual Funds are a wise choice. These funds don’t take on high risk or tie up money; they simply deliver simple, liquid, and reliable returns. By choosing the right fund, you can grow your cash without stress, with complete transparency and flexibility.

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11	Mutual Fund Fees & Charges in India 2024
12	What is TREPS & Why Mutual Funds Invest in it?
13	History of Mutual Funds in India
14	What is Asset Under Management (AUM) in Mutual Funds

Frequently Asked Questions (FAQs)

What is a Money Market Mutual Fund?
This is a debt fund that invests in safe government and corporate bonds with short-term maturity periods of up to 1 year.
Are Money Market Funds safe to invest in?
Yes, they are quite safe because they invest mostly in AAA-rated and government securities.
What is the average return of money market funds in 2025?
The average return of these funds has been around 6.5% to 7%.
Can I withdraw my money anytime?
Yes, you can withdraw it anytime after investing; the money is usually received the next day.
Who should invest in money market funds?
People who need to keep their money safe and easily accessible for a short period of time.

October 22, 2025

Best Pharma Mutual Funds in India

Pharma mutual funds and healthcare mutual funds are emerging as a great option for investors in 2025. Increasing healthcare needs, government schemes and increasing expenditure on research are strengthening this sector. In such a situation, the pharma sector mutual fund is useful for those who want stable and safe returns over a long period of time. In this blog, we will know which are the best pharma mutual funds India 2025, and how they can make your portfolio balanced and profitable.

What Are Pharma Sector Mutual Funds?

Pharma sector mutual funds are mutual funds that invest primarily in companies in the pharmaceutical, healthcare services, diagnostics, medical devices and biotechnology sectors. As per SEBI regulations, any sector fund is required to invest at least 80% in the same sector.

Investment focus : Pharma mutual funds in India focus specifically on healthcare innovation, diagnostics, medical equipment and drug manufacturing. This way, investors can directly connect to the growth story of that sector.
Difference from diversified funds : While diversified mutual funds spread investments across many different sectors (such as IT, banking, consumer goods), pharma sector mutual funds focus only on the healthcare and pharma industry. This is why the potential returns may be higher, but the risk is also higher.

Best Pharma Sector Mutual Funds 2026

Fund Name	Current Nav	AUM	3 years return	5 year Return
Nippon India Pharma Fund	₹512.99	₹8113.59Cr	22.21%	16.99%
SBI Healthcare Opportunities Fund	₹433.98	₹3933.26Cr	25.77%	18.86%
Tata India Pharma & Healthcare Fund	₹30.75	₹1295.83Cr	22.87%	17.27%
UTI Healthcare Fund	₹292.65	₹1096.95Cr	25.10%	17.28%
ICICI Prudential Pharma Healthcare & Diagnostics Fund	₹40.42	₹6226.82Cr	28.40%	20.07%
DSP Healthcare Fund	₹39.12	₹3106.92Cr	23.00%	16.96%
LIC MF Healthcare Fund	₹29.88	₹85.19Cr	20.52%	13.77%
Mirae Asset Healthcare Fund	₹39.02	₹2761.64Cr	21.63%	17.17%
Aditya Birla Sun Life Pharma & Healthcare	₹31.21	₹829.63Cr	22.14%	15.27%
ITI Pharma and Healthcare Fund	₹16.40	₹226.5Cr	20.47%	–

(Data as on 14-10-2025)

1. Nippon India Pharma Fund

Nippon India Pharma Fund has a minimum SIP of ₹100 and is managed by Sailesh Raj Bhan. The fund invests in leading companies like Sun Pharma, Divi’s Labs, Lupin, Cipla, Dr. Reddy’s and Apollo Hospitals. The portfolio also includes companies like Medplus, Vijaya Diagnostic, GSK Pharma and Gland Pharma.

2. SBI Healthcare Opportunities Fund

SBI Healthcare Opportunities Fund has a minimum SIP of ₹500 and is managed by fund manager Tanmaya Desai. It invests in Sun Pharma, Divi’s Labs, Max Healthcare, Cipla, Lonza Group and Lupin and is suitable for long-term investors in the healthcare sector.

3. Tata India Pharma & Healthcare Fund

The minimum SIP of Tata India Pharma Fund is ₹100 and it is managed by Rajat Srivastava. The portfolio includes Sun Pharma, Cipla, Apollo Hospitals, Lupin, Repo Instruments, Healthcare Global, Torrent Pharma, Aster DM, Fortis and Alkem Laboratories.

4. UTI Healthcare Fund

The minimum investment in UTI Healthcare Fund is ₹500. Led by Fund Manager Kamal Gada, it invests in companies like Sun Pharma, Cipla, Ajanta Pharma, Lupin, Procter & Gamble Health and Dr. Reddy’s.

5. ICICI Prudential Pharma Healthcare & Diagnostics Fund

The minimum investment of ICICI Prudential Pharma Fund is ₹100. It is managed by Fund Manager Dharmesh Kakkad and the portfolio includes Sun Pharma, Dr. Reddy’s, Divi’s Labs, Cipla, Aurobindo Pharma, Lupin, Mankind Pharma, Alkem, Biocon and Tri-Party Repo.

6. DSP Healthcare Fund

DSP Healthcare Fund has a minimum investment of ₹100 and is managed by Chirag Dagli. The portfolio includes Cipla, Sun Pharma, Ipca Labs, Cohance Lifesciences, Laurus Labs and Gland Pharma.

7. LIC MF Healthcare Fund

LIC MF Healthcare Fund has a minimum SIP of ₹200. Led by Fund Manager Karan Doshi, it invests in Sun Pharma, Apollo Hospitals, Torrent Pharma, Cipla, Tri-Party Repo and Divi’s Labs.

8. Aditya Birla Sun Life Pharma & Healthcare Fund

Aditya Birla Sun Life Fund has a minimum SIP of ₹100. Fund Manager Dhaval Shah manages it and the portfolio includes Sun Pharma, Apollo Hospitals, Cipla, Fortis Healthcare, Abbott India and Torrent Pharma.

9. Mirae Asset Healthcare Fund

Mirae Asset Healthcare Fund has a minimum SIP of ₹99. Fund Manager Vrijesh Kasera manages it and the portfolio includes Sun Pharma, Divi’s Labs, Glenmark Pharma, Aurobindo Pharma, Cipla, Apollo Hospitals, Lupin, Dr. Reddy’s, Krishna Institute and Cohance Lifesciences.

10. ITI Pharma and Healthcare Fund

ITI Pharma Fund has a minimum SIP of ₹500 and is managed by Rohan Korde. The portfolio includes Sun Pharma, Divi’s Labs, Max Healthcare, Apollo Hospitals, Cohance Lifesciences and Torrent Pharma.

Why Consider Pharma Mutual Funds in 2026?

1. Continuous increase in demand

The demand for healthcare and medicines has increased rapidly after the COVID-19 pandemic. This has made “Pharma Mutual Funds” an attractive option for investors as they offer stability along with good returns.

2. Export boom and India’s global role

India’s pharma exports reached $27.9 billion in FY 2023-24, which is about 9.3% higher than the previous year. This growth was almost double the global average.

India is now called the “Pharmacy of the World” as it supplies more than half of the world’s generic medicines. India alone meets 40% of the US and 25% of the UK’s generic drug needs.

3. Government initiatives

The PLI (Production-Linked Incentive) scheme of the Government of India has given new impetus to the pharma sector. Investment and production capacity in projects related to drugs and medical devices have increased rapidly. These initiatives have made pharma mutual funds even more attractive for investors.

4.Strong domestic demand base

Increasing diseases, lifestyle challenges and ageing population in India are continuously increasing the demand for healthcare services. Also, the coverage of health insurance is also expanding rapidly, giving an additional boost to the pharma sector.

5. India on the global supply chain

India’s drug manufacturing capacity and quality standards (such as US-FDA and WHO-GMP) have continuously improved. Due to this, it has become a reliable part of the global supply chain and India’s role in the pharma industry has become stronger.

Key Things to Check Before Investing in Pharma Sector Mutual Funds

Performance record of the fund : Before investing in a pharma sector mutual fund, make sure to look at the CAGR (Compound Annual Growth Rate) of the last 3 years and 5 years. Funds that consistently perform well are considered reliable.
Expense ratio : Sector funds often have a slightly higher expense ratio. Funds with a lower expense ratio can give better returns for investors in the long run.
Expertise of the fund manager : Since pharma is a niche sector, it is very important to have an experienced fund manager. Their research and selection capabilities directly impact the returns.
Volatility : Pharma funds are defensive in nature but during a bull run, they can give lower returns than sectors like IT or banking. Investors should be prepared for this volatility.
Investment period : These funds are better suited for those with an investment horizon of 5 years or more. It is not right to expect them to last for a short period of time.
Who should avoid : Pharma funds are not suitable for investors who are looking for short-term gains or have very low risk.

Risks & Limitations of Pharma Mutual Funds

Sector Dependency : Pharma mutual funds invest primarily in pharma and healthcare companies. This means that if there is a downturn in the sector, the fund’s performance can be directly affected. For example, the success or failure of a new drug, competition and changes in demand in the market can directly impact the NAV.
Regulatory Risk : The healthcare sector is heavily regulated. FDA approvals, new drug policies, changes in drug prices or new government regulations can impact the fund’s performance. Sudden changes in regulations can lead to fluctuations in the fund’s returns.
Volatility : The pharma sector is sometimes very volatile. Events such as the success of new drugs, expiry of patents, mergers or global health crises such as COVID-19 can impact the sector, leading to rapid changes in the fund’s NAV.
Liquidity Risk : Some healthcare funds may have low liquidity. This means that if the investor wants to withdraw money immediately, it may take time. So invest only the amount that you can keep for a long period.
Portfolio Diversification : Investment in these funds is limited to only one sector, so the risk can be high. Therefore, experts recommend that the portfolio should also be invested in other sectors and asset classes so that the overall risk is reduced and the investment remains safe.

Read Also: Top 10 Fund Managers in India

Conclusion

If you want to invest in the health sector, Pharma mutual funds are a practical option. These funds can give good returns in the long term and also provide an opportunity to be a part of the growing demand of the health sector. Yes, sometimes returns can be affected due to fluctuations in the sector or new regulations. So do not rush, do some research and invest only after balancing your money. If you invest money wisely, these funds can become a safe and profitable source for you.

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Frequently Asked Questions (FAQs)

What are Pharma Mutual Funds?
Pharma mutual funds are funds that invest primarily in companies in the pharma and healthcare sector.
Who should invest in Pharma Mutual Funds?
Investors who want to participate in the long-term growth and growing opportunity of the healthcare sector can invest.
Are Pharma Mutual Funds risky?
Yes, there is some risk due to sector volatility and regulatory changes.
What is the minimum SIP amount?
The minimum SIP of most pharma mutual funds starts from Rs 100, but in some funds it can be Rs 500 or more.
How long should I invest in Pharma Mutual Funds?
It is better to have a long horizon of at least 3-5 years in these funds so that the returns are better and stable.

October 15, 2025

Best Thematic Mutual Funds in India

The mutual fund market in India is growing by the day. Today, thematic mutual funds in India offer a new opportunity for investors who invest not just in companies but in larger trends, such as Digital India, the energy transition, or the defense industry. They are on the verge of becoming the top-ranked mutual funds in India by 2026. In this blog, we’ll explore how thematic funds work, where they rank among mutual funds in India, and how you can choose your own top-rated mutual fund schemes/SIPs.

What are Thematic Mutual Funds?

Thematic mutual funds are funds that invest based on a specific theme or idea. This theme can encompass more than one sector. For example, a “Digital India” theme might include IT, telecom, and fintech companies.

How do they work?

These funds typically employ a top-down investment approach. The fund manager first determines which themes (such as defense, energy transition, electric vehicles) will be strong over the long term. Then, investments are made in various sectors and companies aligned with that theme. This way, investors become participants in the entire trend, not just a single sector.

List of Best Thematic Mutual Funds in India 2026

S.No	Fund Name	AUM (Rs Cr)	3 / 5 Years Return (%)	3 / 5 Years Category Average	Current NAV
1	ICICI Prudential Technology Fund	₹14,734Cr	14.85% / 18.55%	19.55% / 22.326%	₹190.58
2	Mirae Asset Great Consumer Fund	₹4,552Cr	17.13% / 21.80%	19.55% / 22.32%	₹94.97
3	ICICI Prudential Manufacturing Fund	₹6,490Cr	26.82 % / 28.84%	19.29 % / 22.23%	₹35.26
4	Sundaram Services Fund	₹4,333Cr	18.36% / 24.21%	19.71% / 23.99%	₹34.46
5	UTI-Transportation and Logistics Fund	₹3,741Cr	24.59% / 26.84%	19.29% / 23.28%	₹290.60
6	SBI Consumption Opportunities Fund	₹3,175Cr	14.59% / 24.31%	19.17% / 22.47%	₹306.53
7	HDFC Housing Opportunities Fund	₹1,285Cr	19.73% / 23.80%	19.29% / 23.28%	₹22.03
8	Aditya Birla Sun Life Manufacturing Equity Fund	₹1043Cr	18.65% / 18.32%	19.29% / 23.28%	₹32.05
9	Edelweiss Recently Listed IPO Fund	₹924Cr	15.61% / 19.77%	18.29% / 22.28%	₹27.14
10	SBI Comma Fund	₹702Cr	16.47% / 20.44%	19.29% / 22.44%	₹104.28

(Data as of 26 Sep 2025)

A brief overview of the Best Thematic Mutual Funds in India 2026 are given below:

1. ICICI Prudential Technology Fund

This fund is managed by ICICI Prudential AMC and primarily invests in IT sector and technology-related stocks. It was launched on June 22, 1993, and today is considered one of India’s leading technology-focused mutual funds. The fund’s objective is to provide investors with long-term exposure to the growth of the technology sector. It is currently managed by Vaibhav Dusad. The fund’s portfolio is concentrated in large IT giants such as Infosys, TCS, Wipro, and Tech Mahindra, providing it with strong stability and sector-specific exposure.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹5,000	Vaibhav Dusad

2. Mirae Asset Great Consumer Fund

Mirae Asset Great Consumer Fund is a thematic equity fund managed by Mirae Asset Mutual Fund. It aims to enable investors to participate in India’s consumption growth story. As the middle class and income levels in the country are growing, demand for consumer-based companies is also steadily increasing. The fund focuses on industries such as FMCG, automobile, telecom, and retail. The portfolio consists of a mix of large and reliable companies. ITC, Hindustan Unilever, and Asian Paints represent FMCG and branded consumer goods. Mahindra & Mahindra and Maruti Suzuki provide exposure to the automobile segment. Bharti Airtel captures the growth of the telecom sector, while Trent and Avenue Supermarts focus on retail and consumer services. Eicher Motors and Eternal Ltd. further diversify the portfolio.

Fund details :

Min SIP	Min Investment	Fund Manager
₹1000	₹5,000	Siddhant Chhabria

3. ICICI Prudential Manufacturing Fund

This fund is managed by ICICI Prudential AMC and focuses on India’s manufacturing sector. It aims to invest in companies that are directly linked to the country’s industrial progress and the “Make in India” initiative. The fund is currently managed by Antariksh Banerjee and is designed to capture the benefits of long-term manufacturing growth.

Its portfolio includes large and strong industries. Giants like Ultratech Cement and Ambuja Cements represent India’s manufacturing sector. Mahindra & Mahindra and Hindustan Aeronautics capture the growth story of automobiles and aerospace. Names like Cummins India and JSW Steel reflect the strength of the industrial machinery and metals sectors.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹5,000	Antariksha Banerjee

4. Sundaram Services Fund

Sundaram Services Fund is a thematic mutual fund managed by Sundaram Mutual Fund. Its objective is to invest in Indian services-based companies, as the service sector continues to grow in India’s economy. The fund was launched on February 26, 1996, and is currently managed by Rohit Seksaria. The fund’s portfolio focuses on leading service-based companies. Major companies like Bharti Airtel and Reliance Industries represent telecom and consumer services, while HDFC Bank and Axis Bank represent financial services strengths. Additionally, exposure to Tri-Party Repo (TREPS) helps manage liquidity. This mix provides a balanced and diversified perspective on the services sector.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹100	Rohit Seksaria

5. UTI-Transportation and Logistics Fund

UTI-Transportation and Logistics Fund is a sector-specific thematic fund managed by UTI Mutual Fund. The fund was launched on November 14, 2002, and is currently managed by Sachin Trivedi. Its objective is to benefit investors from the growth of India’s automobile, logistics, and transportation sectors. The portfolio includes key companies representing the auto and transportation sectors. Mahindra & Mahindra and Maruti Suzuki cover India’s passenger and utility vehicle segments. Eicher Motors and Bajaj Auto demonstrate strength in two-wheelers and commercial vehicles. Interglobe Aviation (IndiGo) provides air traffic exposure, while Eternal Ltd. further diversifies the portfolio.

Fund details :

Min SIP	Min Investment	Fund Manager
₹500	₹5,000	Sachin Trivedi

6. SBI Consumption Opportunities Fund

SBI Consumption Opportunities Fund is a thematic equity fund managed by SBI Mutual Fund. It was launched on February 7, 1992, and is currently managed by Ashit Desai. The fund aims to capture the story of India’s growing consumption sector. As income levels and consumer demand rise, the prospects for consumption-based companies are also brightening. Its portfolio includes leading consumption companies. Bharti Airtel represents telecom consumption, while Jubilant FoodWorks and Britannia Industries cover the Indian food and FMCG segments. Major companies like Hindustan Unilever and Asian Paints represent premium consumer brands. Mahindra & Mahindra provides strong exposure to automobile consumption.

Fund details :

Min SIP	Min Investment	Fund Manager
₹500	₹5,000	Ashit Desai

7. HDFC Housing Opportunities Fund

HDFC Housing Opportunities Fund is a thematic equity fund managed by HDFC Mutual Fund. Launched on December 10, 1999, the fund is currently managed by Srinivasan Ramamurthy. Its objective is to capture opportunities in India’s housing and infrastructure sectors. Given the country’s urbanization and growing housing demand, this theme is considered relevant for the long term. The fund’s portfolio focuses on large financial institutions and infrastructure companies. These include major financial institutions like HDFC Bank and ICICI Bank, which are involved in housing finance and retail loan growth. Larsen & Toubro and Ambuja Cements represent the strength of the construction and cement sectors. NTPC, the backbone of energy supply, and State Bank of India, as the country’s largest bank, provide further balance to this theme.

Fund details :

Min SIP	Min Investment	Fund Manager
₹100	₹100	Srinivasan Ramamurthy

8. Aditya Birla Sun Life Manufacturing Equity Fund

Aditya Birla Sun Life Manufacturing Equity Fund is a thematic fund managed by Aditya Birla Sun Life AMC. It was launched on September 5, 1994, and is currently managed by Harsh Krishnan. The fund focuses on opportunities in India’s manufacturing sector and invests in companies directly involved in industrial production, automobiles, engineering, and basic industries. The fund’s portfolio includes several prominent and trusted names. Reliance Industries is a leading player in diversified manufacturing and energy. Hindalco Industries is a leader in metals and aluminum manufacturing. Maruti Suzuki and Mahindra & Mahindra demonstrate strong presence in automobile manufacturing. Cummins India provides exposure to industrial machinery and engineering, while United Breweries contributes to consumer and beverage manufacturing.

Fund details :

Min SIP	Min Investment	Fund Manager
₹1000	₹1,000	Harsh Krishnan

9. Edelweiss Recently Listed IPO Fund

The Edelweiss Recently Listed IPO Fund is a unique thematic fund managed by Edelweiss Mutual Fund. It was launched on August 23, 2007, and is currently managed by Bhavesh Jain. The fund invests in companies that have recently listed through an IPO (Initial Public Offering). Its objective is to enable investors to participate in the early growth story of newly listed businesses. The fund’s portfolio focuses on new and emerging businesses across diverse sectors. It includes consumer and automobile brands such as Hyundai Motor India and Vishal Mega Mart. Swiggy reflects the strength of the digital consumption and food delivery sectors. Bajaj Housing Finance provides exposure to financial services, and Sai Life Sciences and Sagility Ltd. represent growth in the healthcare and research sectors.

Fund details :

Min SIP	Min Investment	Fund Manager
₹500	₹5000	Bhavesh Jain

10. SBI Comma Fund

SBI Comma Fund is a thematic equity fund managed by SBI Mutual Fund. It was launched on February 7, 1992, and is currently managed by Dinesh Balachandran. The fund primarily invests in the commodities, materials, and energy sectors. These sectors, linked to India’s industrial and energy needs, have long been considered the backbone of economic growth, and this is the fund’s primary focus. The portfolio includes leading commodity and energy companies. Tata Steel and Vedanta provide exposure to metals and mining. Reliance Industries represents the energy and petrochemical sectors. Ultratech Cement covers construction and infrastructure growth, while ONGC is a major player in oil and gas production. CESC Ltd. also provides stability to the power supply and utilities sectors.

Fund details :

Min SIP	Min Investment	Fund Manager
₹500	₹5,000	Dinesh Balachandran

Why Invest in Thematic Mutual Funds in 2026?

Policy Support : The Indian government has paid special attention to sectors such as defense, infrastructure, energy transition, and the digital economy in recent years. Policy support in these sectors can provide thematic funds with the opportunity for long-term, stable growth.
Benefiting from Changing Economic Trends : Trends such as digital transactions, electric vehicles, healthcare, and renewable energy will strengthen in the coming years. Thematic mutual funds offer investors the opportunity to participate in these changes from an early stage.
Potential for Additional Returns : When the chosen theme remains relevant over the long term, thematic funds have the potential to deliver better returns than traditional diversified equity funds. However, this is not always guaranteed and involves higher risk.
A Different Approach from Sectoral Funds : Sectoral funds focus on a single industry, while thematic funds invest in multiple industries within a larger story. This helps spread the risk somewhat.
Growing Investor Interest : Investor interest in thematic funds has increased over the past few years. This is because investors prefer to invest in sectors and trends that have strong future potential.
Potential to Outperform Indices : Over some periods, thematic funds have outperformed broad indices. However, their performance depends on trends and market conditions, so investors should have realistic expectations.
Strategic Role in Portfolios : These funds are best held as satellite allocations rather than as part of a core portfolio. This allows investors to take advantage of emerging trends while maintaining portfolio diversification.

Emerging Investment Themes in India 2026

Defense and Aerospace : The country is moving towards becoming self-reliant in defense equipment. Continued large orders and export opportunities are strengthening this theme.
Infrastructure and PSUs : Government spending on roads, railways, and power is steadily increasing. This is benefiting not only infrastructure companies but also many public sector undertakings.
Energy Transition : In keeping with climate goals, there is a significant emphasis on renewable energy. Solar, wind, and battery technology are at the center of this transition.
Electric Vehicles and Electronics : EV adoption is increasing, and domestic electronics manufacturing is also strengthening. Battery and charging networks are driving this trend.
Digital and Fintech : Digital payments and online services have become a daily necessity. Investment in data security and cloud services will also increase in the coming years.
Healthcare and Pharma : Growing demand for healthcare and the discovery of new medicines are continuously strengthening this sector.
Premium Consumption : As incomes rise, people are increasingly investing in premium and branded products. This theme is expected to deepen in the coming years.

Read Also: Types of Mutual Funds in India

Risks & Challenges in Thematic Investing

Thematic mutual funds are attractive, but they carry some significant risks that should not be overlooked.

Relying solely on the theme : People often invest under the influence of a story or trend. However, not every theme succeeds. The true strength comes from the companies’ earnings and business models.
Limited Diversification : Like sectoral funds, thematic funds operate within a limited range. If the theme weakens, the entire portfolio can be affected.
Liquidity Issues : Some themes are based on small stocks. These stocks cannot be easily sold during difficult times, which can increase losses.
The Importance of Timing : Timely entry and exit are crucial in these funds. Late entry or hasty exit can impact returns.
Investor Behavior : FOMO in a bull market and panic in a bear market – this is the biggest mistake. Repeated decisions like this can weaken actual returns.

Taxation of Thematic Funds in India (2026 Update)

Equity-oriented Thematic Funds Tax Rates

Short-Term Capital Gains (STCG) : If you sell equity-invested units within 12 months or less, the STCG tax rate will be 20%.
Long-Term Capital Gains (LTCG) : If the holding period is more than 12 months, the LTCG tax rate will be 12.5%.
Exemption : The first LTCG up to ₹1.25 lakh is tax-free. That is, if your LTCG is less than ₹1.25 lakh, no tax will be payable.

Summary of Tax Rates (as of 2026)

Fund Type / Status	Holding Period	Tax Type	Rate / Description
Equity-oriented Thematic Fund	≤ 12 months	STCG	20%
Equity-oriented Thematic Fund	> 12 months	LTCG	12.5% (discount up to ₹1.25 lakh)
Thematic FoF / Hybrid (where equity < 65%)	any period	Income Tax Slab	As per your tax slab
Hybrid (equity ≥ 65%)	> 12 months	LTCG	12.5%

Conclusion

Thematic mutual funds offer investors the opportunity to participate in India’s rapidly changing economy and emerging trends. Whether it’s manufacturing, consumption, infrastructure, or technology, each theme offers long-term potential. However, it’s also true that they carry relatively higher risks. Therefore, it’s always wise to include them in your portfolio with a limited allocation and a long-term view.

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10	What is Solution Oriented Mutual Funds?
11	Mutual Fund Fees & Charges in India 2024
12	What is TREPS & Why Mutual Funds Invest in it?
13	History of Mutual Funds in India
14	What is Asset Under Management (AUM) in Mutual Funds

Frequently Asked Questions (FAQs)

What are thematic mutual funds?
These funds invest in a specific theme or trend.
Are thematic funds good for SIPs?
Yes, SIPs reduce risk.
How risky are thematic funds?
They carry a higher risk.
Who should invest in thematic mutual funds?
Investors who can stay invested for the long term.
What is the ideal allocation for thematic funds?
Around 10–20% of the portfolio.

October 14, 2025

How Do Mutual Funds Pay Dividends?

Let’s look at a different aspect of the financial market except from buying and selling shares, this is mutual funds and dividends. So, have you ever wondered if you get extra cash back from your mutual fund investments? Many people think of this as a ‘dividend’ just like a small bonus for investing.

But have you ever wondered, do mutual funds pay dividends? The answer is yes, but it’s not exactly what you might think. It’s not really “extra” money that you get, so understanding what happens to dividends in mutual funds is one of the most important things for an investor.

In this blog we will look upon how mutual funds pay dividends to the investors.

What’s a Mutual Fund Dividend?

A mutual fund is like a big investment basket managed by a registered & professional fund manager. This basket makes money in a few ways:

Company Profits: If your fund owns shares of a company like TCS, and TCS decides to share its profits, your fund gets a piece of that.
Interest Earnings: If your fund has lent money (by buying bonds), it earns interest, just like a bank FD.
Smart Selling: When the fund manager sells an investment for more than they paid, the fund makes a profit.

All this money gets collected in the fund. After paying its running costs, the leftover profit can be shared with you.

‘Dividend’ is Now Called ‘IDCW’

Here’s something every investor in India needs to know. In 2021, the market regulator and watchdog SEBI changed the name of the “Dividend Option” to IDCW which stands for Income Distribution cum Capital Withdrawal.

SEBI wanted to be crystal clear and protect the investors from being misled. The old name, “dividend,” made it sound like you were getting extra bonus money from your investments but this was not the whole story.

Income Distribution: This is the part that comes from the fund’s actual earnings.
cum Capital Withdrawal: It means some of the money you’re getting is your own invested money being handed back to you.

By this you can understand that IDWC isn’t a bonus just like a dividend. It’s the fund giving you a mix of its profits and a little bit of your own money back.

How do mutual funds pay dividends?

The fund gathers up all the profits it has made.
The fund manager looks at the pile of profits and decides if there’s enough to share.
If it’s a “yes,” the money is sent straight to your bank account. By law, it has to get to you within seven working days.

Read Also: What is Dividend Policy?

What to Do with the Profits?

When you invest in mutual funds, you get to choose a path for your profits.

IDCW Payout: Investors can get their cash directly and it lands in your linked bank account. This is best suitable for people who need a regular stream of money, like retirees.
IDCW Reinvestment: Instead of cash, the money is used to buy you more units in the fund. Here the investor does not cash out the profits rather get more funds in it.
Growth Option: This is the most popular choice as, no money is paid out, all the profits are ploughed back into the fund to help it grow bigger and faster making it more profitable and valuable over time.

Feature	IDCW (Dividend) Plan	Growth Plan
Profits	You either get cash or more units.	Money is put back into the fund to grow.
Price	Price of the units drop after the payout	Price of unit grows over time
Units	Stays the same or gets reinvested	Stays the same
Best suitable for	Someone who needs cash in hand regularly.	Someone who wants money to grow over the years.
Taxation	You pay tax on it in the year you receive it.	You only pay tax when you decide to sell your units

How are Dividend Pay Decided?

The dividends in mutual funds are not 100% guaranteed, it’s not like a fixed deposit where you know exactly what returns you will be getting.

The fund manager is the one who takes the decision after considering the following:

Profit Generated: A fund can only be distributed if there is enough profit generated.
Market Conditions: If the market is volatile and uncertain, then the manager might decide to hold onto the cash to be safe.
Fund Basket: A fund that invests in big, steady companies might pay dividends more often than a fund that invests in exciting new startups.

How Dividends Affect Your Investment’s Value

When a fund pays you a dividend, the Net Asset Value (NAV) of your units drops by that exact amount. The NAV is just the price tag on one unit of your fund. Let’s walk through it. If you invest Rs.10,000 and the NAV is Rs.50, then you get 200 units (Rs.10,000 ÷ 50).

The fund declares a dividend of Rs.2 per unit, so with 200 units you get a total dividend payout of Rs.400 (200 × 2). At the same time, the NAV of the fund drops to Rs.48 (Rs.50 − Rs.2). The value of your current holding is now Rs.9,600 (Rs.48 × 200 units), and the cash received in your bank account is Rs.400.

There is no change in your total wealth because Rs.9,600 + Rs.400 = Rs.10,000. Essentially, the investment simply moves from one pocket (your mutual fund) to another (your bank account). This shows that the dividend is paid out from your investment value—it is not extra money.

Read Also: What is Dividend ETF?

How to Pick a Good Dividend Fund

If you’ve decided that getting regular cash is right for you, here are a few friendly tips for picking a fund:

You should not just chase the biggest payout, as a fund that promises a huge dividend might sometimes be struggling. A very high payout can be a sign that the fund’s NAV has dropped.
One should look for a steady track record where a fund that pays small but consistent dividends is often more reliable than one that’s all over the place.
Check the total return and don’t get fixated on the dividend rather look for the growth in the fund’s price plus the dividend.
Your goals come first, if you’re young and saving for the long haul, the Growth option is almost always your best friend as it lets your money work for you. IDCW plans are generally best for people who are retired and need cash for their expenses.

Conclusion

As we have read, we know that mutual funds pay dividends, which are now called IDCWs. The most important thing to remember is that this is not extra money. It’s just a part of your own investment being returned to you as cash. This is why the fund’s price (NAV) drops by the exact same amount.

Choosing between an IDCW plan (for cash payouts) and a Growth plan (to build wealth) is a personal decision. If you need regular income, IDCW can be useful. If you want your money to grow for the future, the Growth option is often the better path. The key is to understand how it works so you can make the best choice for your money.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	Mutual Fund Taxation – How Mutual Funds Are Taxed?
2	What is a Fixed Income Mutual Fund?
3	How to Check Mutual Fund Status with Folio Number?
4	10+ Best Investment Plan for Monthly Income in India
5	How to invest in dividend stocks in India?

Frequently Asked Questions (FAQs)

Are mutual fund dividends (IDCW) guaranteed?
Nope, they depend completely on whether the fund makes a profit and what the fund manager decides to do and they can be lowered or even stopped at any time.
How are these dividends taxed in India?
The IDCW you get is added to your total income for the year and taxed based on your income tax slab. If you receive more than Rs.5,000 from a single fund house in a year, they will also cut 10% tax (TDS) before you get your money.
Is a mutual fund dividend the same as a stock dividend from a company?
They’re different. A company dividend is a share of the company’s profits. A mutual fund’s IDCW is a mix of the fund’s earnings and can also include a part of your own invested capital. This is why the fund’s price (NAV) always drops by the exact dividend amount.
Can I get dividends every month?
Some funds do have plans that aim to pay out monthly. But even then, it’s not a promise as the fund needs to make enough profit to be able to share it.
What is meant by the “reinvestment” option?
Instead of getting cash, the dividend money is used to automatically buy more units of the fund for you. This is a great way to grow your investment, but remember, even though you don’t see the cash, it’s still considered income for that year and you’ll have to pay tax on it.

October 14, 2025

Category: Mutual Funds

What Is a Large-Cap Fund?

Key Features of Large Cap Funds

What Is a Mid-Cap Fund?

Key Features of Mid-Cap Funds

Pros and Cons of Large Cap Funds

Pros of Large Cap Funds

Cons of Large Cap Funds

Pros and Cons of Mid-Cap Funds

Pros of Mid-Cap Funds

Cons for Mid Cap Funds

Large Cap vs Mid Cap Funds: Key Differences

Which Is Better – Large Cap or Mid Cap Fund?

Conclusion

Frequently Asked Questions (FAQs)

What is a large-cap fund in simple terms?

Which is safer, large cap or a mid-cap fund?

Can I invest in both large-cap and mid-cap funds?

Who should invest in mid-cap funds?

How long should I stay invested in large-cap funds?

What are High Return Mutual Funds?

List of the Top 10 High-Return Mutual Funds in India

Factors to Evaluate Before Investing

1. Risk and Return Go Hand in Hand

2. Look for Consistency

3. The Fund Manager Matters

4. Watch the Expense Ratio

5. Time Is Your Best Friend

How to Choose the Right Fund

1. Decide Your Goal First

2. Know How Much Risk You Can Handle

3. Look at the Fund’s Track Record

4. SIPs Are a Great Place to Start

Common Mistakes to Avoid

1. Chasing Past Performance

2. Ignoring Risk

3. Switching Too Often

4. Not Reviewing Your Investments

5. Lack of Diversification

Conclusion

Frequently Asked Questions (FAQs)

Which mutual fund gives the highest return in India?

Are high-return mutual funds risky?

How long should I stay invested in a mutual fund?

Can I invest in high-return funds through SIPs?

How many mutual funds should I have?

What are Defence Sector Mutual Funds?

Defence Sector Mutual Funds List 2026

1. Motilal Oswal Nifty India Defence Index Fund

2. HDFC Defence Fund

3. Aditya Birla Sun Life Nifty India Defence Index Fund

4. Groww Nifty India Defence ETF FoF Direct Growth

Why Defence Sector Mutual Funds are Gaining Popularity

Advantages of Investing in Defence Sector Mutual Funds

Risks & Challenges Investors Should Know

Conclusion

Frequently Asked Questions (FAQs)

What are defence mutual funds?

Who should invest in defence mutual funds?

What is the minimum SIP to start with?

Are these funds risky?

Can these funds give high returns?

What are Silver Mutual Funds?

Important Points to Consider before Investing

1. Prices Can Be Volatile

2. Returns Might Differ Slightly from Silver Prices

3. Check the Expense Ratio

4. Think Long-Term

5. Use It for Diversification

Conclusion

Frequently Asked Questions (FAQs)

Are silver mutual funds safe to invest in?

What is better, a Silver ETF or a Silver Mutual Fund?

How much do I need to start investing?

Can silver replace gold in my portfolio?

How long should I stay invested?

Step 1–Define Your Investment Objective and Time Horizon

Step 2 – Compare Funds Within the Same Category

Understanding SEBI’s Fund Categories

There are also several types within Equity Funds