Pocketful

Category: Mutual Funds

  • 10 Best Brokers for Mutual Funds 

    10 Best Brokers for Mutual Funds 

    In the earlier times people used to rely on bank managers or local agents to buy mutual funds but times have changed now as digitization is taking place, in today’s time everybody is carrying a supercomputer in their pocket, and with just a few taps you can buy and become an investor. 

    Although access is no longer the problem, selecting the best app from dozens of apps to invest in mutual funds can be a challenge. Finding out the best place to invest in mutual funds is based on the charges, fees for features and even some hidden costs. 

    In this blog, we will analyse the best company to invest in mutual funds based on different factors. Whether you are a seasoned trader or a complete beginner, finding the best broker for mutual funds is the first step towards building your wealth. By the end of this blog you will get to know the best mutual fund brokers that can be aligned to your financial goals.   

    Direct Vs Regular Mutual funds plan

    When you invest in mutual funds, you will notice two versions of the same scheme for example: 

    • HDFC Top 100 Fund – Regular Plan
    • HDFC Top 100 Fund – Direct Plan

    Here the investment is being done in the same funds with the same fund manager but there is one great difference that is The Expense Ratio. 

    Regular Plans: Here the fund is sold by various distributors like banks, agents, and some brokers. The mutual fund company gives these middlemen commission for selling the fund and this commission is deducted from your investment value every year.

    Direct Plans: Here the funds are bought directly from the fund house or the mutual fund platforms. In this no middleman is involved meaning no commission is deducted. 

    Comparison Table for Best Brokers for Mutual Funds in India

    BrokerPlan Type CommissionPlatform/Account FeesAMCHolding FormatSuitable For
    Zerodha CoinDirectRs.0FreeRs.300+GST/yearDematActive Traders who want stocks & MF in one place
    Paytm MoneyDirectRs.0FreeRs.0 (lifetime free)Demat Mobile first investors looking for zero costs
    ET MoneyDirectRs.0Free (Genius is a paid plan)Rs.0 (No Demat Required)SOAInvestors who prefer “Statement of Account” 
    KuveraDirectRs.0FreeRs.0 (No Demat Required)SOALong term goal based investors & family account
    IND MoneyDirectRs.0FreeRs.0DematInvestors tracking US stocks & Indian MFs together 
    Pocketful DirectRs.0FreeRs.0Demat Users looking for a simple, zero-AMC Demat app 
    Angel OneDirectRs.0FreeRs.240+GST/yearDematInvestors who already use Angel One for trading
    5paisaDirectRs.0FreeRs.300+GST/yearDematExisting 5 paisa traders
    FisdomDirectRs.0FreeRs.299+GST/year (1st year free)DematInvestors comfortable with standard broker fee structure 
    ScripboxDirect/RegularRs.0Free for Regular, Paid for DirectRs.0 (No Demat required)SOABeginners needing automated guidance (Regular Plan)

    Read Also: Top 10 Mutual Fund Distributors in India

    Top 10 Mutual Fund Brokers in India 

    1. Zerodha Coin

    This is one of the biggest broking platforms in India and their Coin platform is specifically dedicated for sale and purchase of mutual funds. Unlike most of the other platforms that use the “Statement of Account” (SoA) mechanism, Zerodha holds your mutual fund units Demat form, meaning the mutual funds sit in the same account where your stocks and bonds are placed. 

    Key Features:

    Unified Portfolio: One place to view all your investments may be stocks, gold bonds, ETFs, and mutual funds.  

    Pledging for Margin: If you are F&O investors you can pledge your mutual fund holdings to get the margin limit. 

    Step-Up SIP: Here you can automate your wealth building process by instructing the app to increase the SIP amount by 10% depending upon when you want to increase it. 

    Costs: 

    Commission: Rs.0 (Direct Plan)

    Platform Fee: Rs.0

    Demat AMC: Zerodha charges Rs.300 + GST per year as Annual Maintenance Charge (AMC) for the Demat account.

    2. Paytm Money

    This brought “Direct Mutual Fund” for the masses, their main focus was to remove the jargon from finance.  

    Paytm Money operates as a registered Investment Advisor (RIA) and offers the public an Execution Only Platform (EOP) services. Here the SoA model is used meaning Demat account is not required to start investing, although now they offer Demat for stocks. 

    Key Features: 

    • Easy Entry: Paytm money pushed funds where investments as low as Rs.100 is accepted, making it friendly for students or first-time earners. 
    • Portfolio Switch: If you have old mutual funds bought via a bank or agent (Regular plans), using Paytm Money can help you switch them to Direct Plans in just a few clicks, showing the exact amount of money you will save. 
    • Voice Trading & Nudges: The app uses smart nudges to remind you of SIPs or alert if the fund rating is dropping. 

    Costs: 

    • Commission: Rs.0 (Direct Plans)
    • Platform Fee: It is mostly free for mutual funds, though charges are there for brokerage of stocks. 

    3. ET Money

    This is backed by the Times Group and has recently shifted its strategy from a transaction based app to a wealth management platform. 

    Earlier it was a free platform but now new users have to take the subscription  for the premium model known as “ET Money Genius”.

    Key Features: 

    Genius: This is the premium model where you not only get to know which fund you need to buy but also when you need to buy or sell. Here your money moves dynamically between equity, debt, and gold based on market valuations. It also helps you during the market downturn. 

    Portfolio Health Check: It is an analytical tool, scans your external portfolio and provides a report card highlighting high fees, poor diversification, or underperforming funds.

    The “Free” Caveat: New users can access the Direct plans if they have the Genius membership or come with some restrictions. Free users get to access the Regular plans that have limited features. 

    Costs:

    • Commission: Rs.0
    • Fees: Rs.0 for mutual fund investing

    4. Kuvera

    Kuvera is a self using platform where you do things yourself, due to this it has zero conflict of interest and has built features that genuinely help the investors.

    Kuvera has been recently acquired by CRED, but still it follows its core philosophy by providing Direct Plans only with zero commission fees and high end features for free. 

    Key Features: 

    Tax Harvesting: This is a feature that is specially created for High Net Worth Individuals (HNIs). The platform has an algorithm that alerts you to sell and rebuy your funds to utilise the Rs.1.25 lakh Long Term Capital Gains tax exemption, helping you to save the substantial taxes over decades. 

    Family Account: You get a family account in this where you can manage your account, your spouse’s, and even your parents account all under one login. 

    Trade Smart: It gives you the warning if a redemption will trigger an exit load or short-term capital gains tax. 

    Costs:

    • Commission: Rs.0
    • Fees: Rs.0 for mutual fund investing

    5. 5paisa

    5paisa is a discount broker which caters to the value conscious trader and investors. This platform charges a flat fee for trading services and a zero commission for mutual funds services. 

    Key Features: 

    All in One App: In this mutual funds are heavily integrated with stocks, commodities, and currency trading.   

    Research & Advisory: 5paisa helps the traders by recommending them stocks and funds.

    Auto-Investor: This platform offers investors a robo-advisory tool that can help in building your portfolio according to the risk and goals of your profile.  

    Cost: Commission: Rs.0 on Direct Mutual Funds 

    Trading: A flat fee is charged for stock orders, that can be further less if you prefer the “Power Investor” packs. 

    6. Angel One

    Angel One was a traditional broker earlier known as Angel Broking, has transitioned now by introducing digitization and becoming a digital fintech giant.  

    It has a low cost being a digital broker with an assurance of a massive offline network.

    Key Features: 

    • ARQ Prime: This is a secure search engine tool where quantitative analysis (rule-based investing) is done recommending funds and stocks that can be bought by the investors. 
    • Offline Presence: It has thousands of offline brokers across India, if the user faces any issue you can connect with these offline brokers. 
    • Smart API: If you are a tech savvy user, this platform offers robust APIs to build custom investment platforms. 

    Cost: 

    • Commission: Rs.0 on Direct Mutual Funds

    7. Pocketful 

    This is a rising star in the fintech space where aggressive targeting is done on things like cost and usability.

    Pocketful is a modern day platform which helps in creating a tech savvy financial ecosystem for the investors. While most of the brokers focus only on the transaction, Pocketful focuses on the cost of holding and ease of selection. 

    Key Features: 

    • Lifetime Zero AMC: Most of the brokers charge Rs.300-Rs.700 per year as the annual maintenance charge but Pocketful removes this entirely. 
    • Thematic “Pockets”: This platform offers a curated basket of stocks and ETFs known as “Pockets” (E.g.: Green Energy, EV, Digital India). Investors can start their SIP via “Pocket” just like the mutual funds.  
    • Direct Mutual Funds: Investors can execute Direct Mutual Funds without paying any commission.
    • TradingView Integration: For investors who rely on data and charts, Pocketful helps in providing it with integrated premium charting tools. 

    Costs: 

    • Commission: Rs.0 on Mutual Funds
    • AMC: Rs.0 (Lifetime Free)
    • Delivery Brokerage: Rs.0 for stocks 

    8. IND Money 

    This was introduced in the market as a portfolio tracker and with time it has evolved as a “Super Finance App”. 

    It behaves like Google for your finances as it can track your credit card bills, EPF, PPF, insurance, and investments all in one dashboard. 

    Key Features: 

    • US Stocks: IND Money helps the investor with not only the domestic market but also the US markets where you can easily invest in stocks like Apple, Tesla, Microsoft etc. Here you can even manage both the stocks in the same platform. 
    • Family Office: It helps in tracking the family’s net worth across multiple platforms and brokers and gives you an auto update email to update your portfolio (though you need to give privacy permission). 
    • Switch to Direct: By this feature you can switch your regular plans to direct plans helping you to save on commissions. 

    Costs:

    • Commission: Rs.0 on mutual funds.
    • US Trading: Charges are applied as per forex transfer and US brokerage. 

    9. Fisdom 

    This is a platform that is less linked directly to the consumer brand and acts more like a Bank Partner. This platform is the power house for investment sections of many major banks like Indian Bank, UCO Bank, etc.  

    Key Features: 

    • Bank Integration: If you are investing using this platform, it often acts as an extension of your savings account. 
    • Pension Products: There is a strong focus on NPS (National Pension System) and retirement planning. 
    • Higher Touch: There is an intense focus on “solution-oriented” advice such as Children’s Education funds rather than giving users multiple schemes. 

    Costs:

    • Commission: Rs.0
    • Fees: Rs.0 for mutual fund investing

    10. Scripbox 

    This is one of India’s first Robo-Advisors for the investors, here it focuses on lowering down the choices and giving users a more accurate product as per their financial plans. 

    Here the users can add filters of their own choice and rather than showing you thousands of funds it selects a basket of 2-4 funds for the investors. 

    Key Features: 

    • Algorithmic Selection: Here you get a “Scripbox Portfolio” where you can pick your goal like “Long Term Wealth” or “Emergency Fund” and accordingly this platform will curate a basket for your needs. 
    • Automated Review: The platform reviews your portfolio and if there are underperforming funds you get the advice to either exit or switch to a better option. 

    Costs:

    • Hybrid Model: Regular plans investing is free of cost, although if you want to invest in Direct Plans, you need to have a subscription or advisory fee charged. 

    Key Factors to Select the Best Broker for Mutual Funds Investing

    1. Costs and Fees: Always look for the fees and charges like AMC, brokerage, etc, as this in the long term can eat up your profits. 
    2. Options: Look what you want to invest in, is it just the mutual funds or stocks or global stocks or you want an all in one app.
    3. Ease of Use and Accessibility: The app should have a good interface with easy tracking and order placing. One such app is pocketful that is one of the best user friendly apps for new investors. 
    4. Research and Analysis: If you are into data and analytics you need to look for an app that helps you with R&D on your behalf. 

    Read Also: Best Mobile Trading Apps in India

    Conclusion

    The Indian mutual fund market is evolving and now you don’t have to pay 1% commission to a bank agent. If you are a trader who wants to pledge mutual funds for margin then an app like Zerodha Coin can be helpful. If you are looking for a very low cost platform for a diversified portfolio (Stocks + Mutual Funds) even without paying extra charges and AMC then Pocketful can be a reliable option. Start investing Mutual Fund today, complete your KYC, and start investing.  

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    Frequently Asked Questions (FAQs)

    1. Can an investor have multiple accounts with multiple brokers? 

      Yes, you can have multiple accounts for stocks you can rely on Zerodha, Kuvera for mutual funds and for ease of tracking and everything at one place then Pocketful is a trusted option. 

    2. Is it safe to invest through online platforms like Pocketful or Paytm Money?

      Yes, these apps are SEBI-registered and your units are safely put with the mutual fund company or in your Demat account (CDSL/NSDL). 

    3. Is it advantageous to have a “Zero AMC” charging platform?

      Most of the brokers charge Annual Maintenance Charge (AMC) which can collectively lower down your accumulated profits. But platforms like Pocketful help users to trade without any AMC. 

    4. Can I switch from a Regular Plan to a Direct Plan?

      Yes, most of the apps have a “Switch” feature where you can directly switch to the direct plan. 

    5. Why do some apps charge a subscription fee for Direct Plans?

      Platforms like ET Money (Genius) or Scripbox act as wealth managers. They charge a fee not for the transaction (which is free) but for the recommended services.

  • Best SWP for Monthly Income in India

    Best SWP for Monthly Income in India

    After retirement, regular monthly inflows through salary came to an end. In this case, individuals are looking to start a new monthly income through different sources. One of such methods is the  Systematic Withdrawal Plan offered by a mutual fund.

    In today’s blog post, we will give you an overview of the best SWP for monthly income in India, along with the factors to consider before choosing a SWP plan.

    What is a Systematic Withdrawal Plan?

    Systematic Withdrawal Plan is an option offered by mutual funds which allows an investor to withdraw a fixed sum of money from a mutual fund scheme at a regular interval, such as monthly, quarterly, etc. It acts as a regular stream of income for a retiree; a certain sum of money is withdrawn, while the remaining amount continues to grow based on market returns. SWP does not guarantee income. Withdrawals continue regardless of market conditions, which can erode capital during prolonged downturns.

    Key Features of Systematic Withdrawal Plan

    The key features of a systematic withdrawal plan are as follows:

    1. Regular Income: SWP allows an investor to withdraw a regular sum of money from their investments at regular intervals, such as monthly or quarterly.
    2. Flexibility: Investors have the option to decide the amount of money which they wish to withdraw based on their needs.
    3. Higher Returns: The amount invested in the fund continues to increase over time, and the returns are linked to the market.
    4. Tax Efficient: Unlike other investment options, such as bank fixed deposits, etc., which are taxed based on the investor’s tax slab, gains from SWP are taxed as capital gain, which makes it a more efficient investment option.

    Best Mutual Funds for SWP in 2026

    1. ICICI Prudential Balanced Advantage Fund
    2. Axis Equity Saving Fund
    3. Kotak Multi Asset Allocation Fund
    4. SBI Equity Hybrid Fund
    5. ABSL Balanced Advantage Fund

    Read Also: Best Annuity Plans in India

    Overview of the Best SWP for Monthly Income in India for 2025

    The overview of best SWP for monthly income in India for 2025 is as follows:

    1. ICICI Prudential Balanced Advantage Fund

    This fund uses an intelligent method of investing by switching dynamically between equity and debt according to market conditions. It lowers equity exposure to control risk when markets are high and it increases equity allocation to capture growth when valuations are lower. The approach does not only minimize volatility but also intends to increase long-term capital appreciation and thus it is well applicable to investors with a moderate risk appetite and long-term investment horizon.

    2. Axis Equity Saving Fund

    Axis Equity Saving Fund was introduced on 14 August 2015 and targets investors seeking a more conservative hybrid fund. It incorporates equity, debt, and arbitrage approach in order to seek consistent and relatively smooth returns which make it appropriate to new investors or seeking to diversify low volatility returns relative to pure equity funds. Through arbitrage opportunities and fixed-income investments, it aims at achieving a small capital growth with an balance risk profile between equity and debt.

    3. Kotak Multi Asset Allocation Fund

    It is a relatively new multi-asset fund in the hybrid category, having been introduced on 22 September 2023. Kotak Multi Asset Allocation Fund manages your money in equity, debt, and commodities (such as gold) so that you are diversified in one portfolio. Since it has significant exposure to various asset classes, it seeks to strike a balance between growth prospects and risk control, which makes it suitable to investors who desire widespread diversification and do not want to operate multiple funds individually.

    4. SBI Equity Hybrid Fund

    SBI Equity Hybrid Fund has a long history, having existed since December 1995, a fact that makes it one of the oldest hybrid mutual funds in India. It is a mix of equity and debt investments with a view to long term capital growth at reduced volatility compared to pure equity funds. The fund suits investors with a balanced portfolio strategy by investing most of their funds in growth stocks and some in fixed-income securities over the long-term and the medium-term.

    5. ABSL Balanced Hybrid Fund

    ABSL Balanced Hybrid Fund with its inception date in April 2000 and is also among the oldest hybrid mutual funds in India. It is a mix of equity and debt investments with a view to long term capital growth at reduced volatility compared to pure equity funds. The fund will suit investors looking to pursue a balanced portfolio strategy over the medium-to-long term by investing a greater percentage in growth stocks and a smaller percentage in fixed-income securities. 

    FundsNAV (INR)AUM (INR Cr.)1 Yr CAGR Return3 Yr CAGR Return5 Yr CAGR ReturnExpense Ratio
    ICICI Prudential Balanced Advantage Fund76.3570,50011.62%13.10%12.03%1.43%
    Axis Equity Savings Fund22.439255.50%9.79%8.15%2.27%
    Kotak Multi Asset Allocation Fund16.149,85029.83%––1.70%
    SBI Equity Hybrid Fund301.4582,85011.22%13.75%12.28%1.38%
    ABSL Balanced Advantage Fund107.688,8008.99%12.35%10.64%1.76%

    Read Also: 10+ Best Investment Plan for Monthly Income in India

    Benefits of SWP for Monthly Income in India

    The key benefits of SWP for monthly income in India are as follows:

    1. Regular Income : It provides a pre-defined monthly withdrawal cash flow, which makes it easy for an investor to manage their expenses.
    2. Growth Potential : The withdrawals are made from the initial investment by the investors. However, the remaining amount left after the monthly withdrawal kept on increasing based on market returns over time.
    3.  Liquidity : SWPs also offer liquidity, as the remaining corpus can be withdrawn anytime by the investor.
    4. No TDS : In SWPs, no taxes are deducted by the asset management at the source of income. All the gains are taxable based on the capital gain tax rate.

    Risk of SWP for Monthly Income in India

    The key risks of investing in SWP for monthly incomes in India are as follows:

    1. Market Risk : The returns in SWP are linked with the market. If the market is underperforming, the funds will not perform well, and their value can decline for a particular period of time.
    2. Interest Rate and Credit Risk : If you are investing in a debt fund for SWP, there might be risk related to interest rates and credit.
    3. Capital Erosion : If the systematic withdrawals are not planned properly, then the initial capital will be eroded or exhausted over time.

    Factors to consider before investing in SWP

    The key factors that an investor should consider before investing in a SWP for monthly income are as follows:

    1. Withdrawal Amount : The investor should withdraw a sustainable amount; if the withdrawal amount exceeds the average return of the fund, it will erode capital.
    2. Frequency of Withdrawal : One should select the frequency of withdrawal based on their income needs. The frequency can vary from monthly, quarterly, half-yearly, etc.
    3. Expense Ratio : If the fund is having a higher expense ratio, then it will reduce the overall return over time. Hence, one should select the fund which has a lower expense ratio.

    Read Also: Types of Investment in the Stock Market

    Who should invest in SWP?

    The SWP plan for monthly income is suitable for the following investors:

    1. Retired Individuals : SWP for monthly income is suitable for retirees who are looking for a regular monthly income even after retirement. 
    2. Tax-Efficient Income Option : Investors who are looking for tax-efficient investment options can consider SWP, as they are taxed based on capital gain rules, instead of the tax slab of an individual.
    3. Liquidity : Investment in SWP offers liquidity for an investor as they can withdraw the remaining corpus at anytime based on their need.

    Conclusion

    On a concluding note, a systematic withdrawal plan helps an individual in planning their retirement efficiently by allowing them to withdraw a fixed sum of money at a regular interval. There are various schemes in mutual funds from which you can withdraw money through SWP, but choosing the right fund depends on the investor’s risk profile and the requirement for money. A well-planned SWP helps an investor in planning their retirement efficiently without exhausting their capital. However, it is advisable to consult your investment advisor before choosing a fund for SWP withdrawals.

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    Frequently Asked Questions (FAQs)

    1. What is the full form of SWP in a mutual fund?

      The full form of SWP is Systematic Withdrawal Plan, offered by mutual fund companies, through which one can withdraw a fixed sum of money at a regular interval.

    2. How are SWPs taxed in India?

      In India SWPs withdrawals are taxed as per capital gain, not based on the income tax slab of an individual.

    3. Can I stop or change the amount of withdrawal from SWP?

      Yes, you can stop or change the amount of withdrawal from SWP anytime. 

    4. Is it possible that the capital gets exhausted in an SWP?

      Yes, if the monthly withdrawal amount is high and the market is not performing well, then in the longterm the capital gets exhausted. 

    5. Can I start SWP immediately after investing in a mutual fund?

      Yes, you can start SWP immediately after investing in a mutual fund. However, it is advisable to initiate SWP after one year of investment to avoid short-term capital gain and exit loads, if any.

  • 10 Best Small Cap Mutual Funds in India 2026

    10 Best Small Cap Mutual Funds in India 2026

    Small cap mutual funds often come into the picture when you want higher growth and are ready to stay invested for the long term. These funds invest in smaller companies that are still finding their space in the market. Some grow steadily, while others grow fast after years of struggle. This is why many investors track the top performing small cap mutual funds before making any decision.

    When you look for the best small cap funds, returns alone should not guide you. You also need to understand the fund’s strategy, how the manager handles market volatility, and whether the portfolio is spread across sectors. Small cap investing is about patience and discipline. 

    In this guide, let us explore the top 10 small cap mutual funds and their details.

    What Are Small Cap Funds?

    Small cap funds are mutual funds that invest mainly in companies with a smaller market value. These companies are usually in the early stages of growth. These are the ones that are still building their business presence. Many of them operate in niche areas or emerging sectors.

    Since these businesses are still growing, their stock prices can fluctuate more than large companies. This leads to higher short-term volatility. At the same time, small cap funds offer strong long-term growth potential. They are suitable for investors who have patience, a higher risk appetite, and a long-term investment horizon.

    Features of Small Cap Funds

    • Invest mainly in companies with a smaller market value.
    • Focus on businesses in early or expansion stages.
    • Higher exposure to emerging sectors and new ideas.
    • Managed actively to identify growth opportunities.
    • Suitable for long-term investment horizons.

    Pros of Small Cap Funds

    • Offer higher growth potential over the long term.
    • Help in portfolio diversification beyond large stocks.
    • Can benefit early from rising companies.
    • Opportunity to invest in future market leaders.

    Cons of Small Cap Funds

    • High short-term volatility and price swings.
    • Higher risk during market downturns.
    • Returns may be uneven year to year.
    • Not suitable for short-term goals.

    Top 10 Small Cap Mutual Funds

    Small cap funds offer you an opportunity to invest in companies that are in the growing stage. This offers investors a chance to not just gain benefits but also ensure that they have managed risk. So, here is the list of the top 10 small cap mutual funds that you should consider investing in.

    Fund NameAUM (₹ Cr)NAV (₹)1Y Return (%)2Y Return (%)5Y Return (%)Expense Ratio (%)
    Nippon India Small Cap Fund – Direct Growth68,287.15181.51-1.817.7926.540.63
    HDFC Small Cap Fund – Direct Growth37,753.13154.322.27.6424.240.67
    SBI Small Cap Fund – Direct Growth36,268.45186.97-2.396.6218.330.75
    Quant Small Cap Fund – Direct Growth29,784.55265.17-2.315.3327.920.75
    Axis Small Cap Fund – Direct Growth26,546.88119.261.299.7521.990.57
    Bandhan Small Cap Fund – Direct Growth18,990.2850.254.6317.4326.230.42
    Kotak Small Cap Fund – Direct Growth17,257.64284.45-6.585.1420.040.55
    DSP Small Cap Fund – Direct Growth16,934.59211.032.059.1422.340.79
    HSBC Small Cap Fund – Direct Growth15,968.7084.48-8.094.6923.860.7
    Franklin India Small Cap Fund – Direct Growth13,238.40184.85-2.965.0322.320.92

    Note: The information is as of 17 January 2026. It is for educational purposes only. Check everything well before investing.

    Read Also: Top 10 High-Return Mutual Funds in India

    1. Nippon India Small Cap Fund

    This fund follows the Nifty Smallcap 250 TRI and focuses on diversification to manage liquidity risks common in small caps. It spreads exposure across a large number of stocks, which helps reduce concentration impact during volatile phases. The investment approach balances growth and stability within the small-cap space. It suits long-term investors who can stay invested through cycles. Many investors track it while researching top performing small cap mutual funds for sustained growth potential.

    2. HDFC Small Cap Fund

    It is benchmarked to the S&P BSE 250 SmallCap TRI. It follows a quality-driven and bottom-up investment style. It focuses on companies with strong governance, stable earnings visibility, and long-term scalability. Portfolio turnover remains controlled. It is mainly because of the easy access approach. The fund avoids chasing short-term momentum and instead prioritizes fundamentals. It is often preferred by investors looking for the best small cap funds with consistency and disciplined execution.

    3. SBI Small Cap Fund

    This fund is benchmarked to the S&P BSE 250 SmallCap TRI and is known for its cautious capacity management. It focuses on protecting existing investors by limiting inflows and maintaining portfolio discipline. Stock selection emphasizes balance sheet strength and earnings visibility. The portfolio is selective rather than widely spread. It suits investors who prefer risk control within small caps. Many consider it a reliable best small cap option for long-term investing.

    4. Quant Small Cap Fund

    Tracking the Nifty Smallcap 250 TRI, this fund follows a highly active and adaptive investment framework. Portfolio decisions are driven by valuation comfort, liquidity signals, and market timing. The strategy allows frequent shifts based on changing conditions, which can lead to higher volatility. It suits investors with a higher risk appetite and tactical mindset. It is often shortlisted among the top 10 small cap mutual funds for aggressive growth seekers.

    5. Axis Small Cap Fund

    Axis Small Cap Fund tracks the Nifty Smallcap 250 TRI and follows a selective investing style. The fund prefers businesses that can grow without heavy capital needs and show steady earnings visibility. Portfolio choices reflect patience rather than fast rotation. Exposure is spread across financials, healthcare, and industrial segments to avoid overdependence on one theme. This approach suits investors who want controlled participation in small caps and often search for the best small cap funds with balance.

    6. Bandhan Small Cap Fund

    Benchmarked to the S&P BSE 250 SmallCap TRI, this fund emphasizes downside protection alongside growth. It maintains a broad stock spread. This helps to manage volatility and liquidity challenges. The portfolio tilts towards financial services, construction, and consumption-driven sectors. The approach suits investors who want smoother participation across market cycles. Over time, it has gained attention among top performing small cap mutual funds with a risk-aware structure.

    7. Kotak Small Cap Fund

    This fund follows the Nifty Smallcap 250 TRI. It adopts a research-driven and bottom-up approach. It focuses on identifying emerging businesses. These are the ones with long growth runways and improving fundamentals. Sector exposure is diversified. The main tilt is towards healthcare, industrials, and consumer segments. Investment decisions are driven by fundamentals rather than market noise. It suits patient investors and is often discussed among the top 5 small cap mutual funds.

    8. DSP Small Cap Fund

    It is a fund that follows the S&P BSE 250 SmallCap TRI. This fund follows a buy-and-hold investment philosophy. It targets under-researched companies. These are companies with good models and better potential. Portfolio turnover remains relatively low, supporting long-term compounding. Sector exposure leans towards consumer cyclicals and industrials. It suits investors who value patience and conviction. Many investors shortlist it while evaluating the best small cap funds for long-term holding.

    9. HSBC Small Cap Fund

    This fund uses the Nifty Smallcap 250 TRI as its benchmark and follows a blend of growth and value investing. It focuses on niche and undervalued businesses with improving fundamentals. Portfolio construction emphasizes diversification to manage volatility. The strategy suits investors comfortable with short-term fluctuations. Over time, it has featured in several discussions on top performing small cap mutual funds for diversified exposure.

    10. Franklin India Small Cap Fund

    Benchmarked to the S&P BSE 250 SmallCap TRI, this fund follows a conservative and research-led investment style. It focuses on under-owned companies. Portfolio diversification helps manage liquidity risks. Also these companies have growth potential. The fund suits investors who prefer a measured approach rather than aggressive positioning. It is often considered among the top 10 small cap mutual funds for steady participation.

    Top 5 Small Cap Mutual Funds With Consistent Performance

    Now that you know the best small cap funds, it is time to explore the ones that have a considerable AUM and have generated positive returns over the last 10 years. These are as follows:

    Fund NameAUM (₹ Cr)NAV (₹)1Y (%)2Y (%)5Y (%)10Y (%)Expense Ratio (%)
    HDFC Small Cap Fund37,753.13154.322.207.6424.2419.660.67
    Axis Small Cap Fund26,546.88119.261.299.7521.9919.690.57
    DSP Small Cap Fund16,934.59211.032.059.1422.3417.580.79
    ICICI Prudential Smallcap Fund8,427.6494.481.796.0322.0517.380.77
    Aditya Birla Sun Life Small Cap Fund4,937.5295.041.116.818.2114.480.90

    Note: The information is as of 17 January 2026. It is for educational purposes only. Check everything well before investing.

    Read Also: Best Performing Mutual Funds of the Last 10 Years

    1. HDFC Small Cap Fund

    It has remained consistent because it sticks to fundamentals. This is even when markets turn volatile. The fund manager avoids chasing trends. The main focus is on businesses with stable cash flows and clear growth paths. This discipline has helped the fund stay positive across time periods without sharp swings.

    2. Axis Small Cap Fund

    This shows consistency by being selective rather than aggressive. It prefers companies that can grow steadily. The focus on heavy capital pressure is low. The fund does not react quickly to market noise. It helps control downside during corrections and supports smoother long-term return delivery.

    3. DSP Small Cap Fund

    It benefits from a patient investment style. Instead of frequent buying and selling, it holds businesses through cycles once conviction is built. This approach reduces unnecessary churn. It allows compounding to work over time, which explains its stable performance across different market phases.

    4. ICICI Prudential Smallcap Fund

    The fund maintains consistency through diversification and careful stock sizing. No single theme dominates the portfolio. This balance helps cushion the fund during weak phases. The fund is still participating in growth periods. This makes it one of the best for a return profile creation and for steadier growth compared to many peers.

    5. Aditya Birla Sun Life Small Cap Fund

    It stays consistent by spreading risk across sectors. This helps in avoiding concentrated bets. The fund focuses on business durability rather than short-term excitement. This measured approach has helped it remain positive over longer horizons despite regular small-cap volatility.

    Who Should Invest in These Small Cap Funds?

    • Investors with a long-term horizon of at least 7 to 10 years.
    • Those who already have exposure to large-cap or index funds.
    • Investors who can handle short-term volatility without panic selling.
    • Individuals investing for wealth creation, not short-term goals.
    • SIP investors who prefer disciplined and gradual allocation to equities.

    Read Also: Best SIP Mutual Funds in India

    Conclusion

    Small cap funds are not about quick wins. They reward investors who stay patient during weak phases and allow compounding to work over time. The funds discussed here have shown consistency across different market cycles, which matters more than temporary spikes in returns. If your goals are long-term and your risk appetite allows some volatility, these funds can add meaningful growth potential to your portfolio.

    Start your investment journey with Pocketful, where you can compare funds, set up SIPs, and track performance easily in one place. Pocketful helps you invest with clarity, not guesswork.

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    Frequently Asked Questions (FAQs)

    1. Are small cap funds risky?

      Yes, small cap funds are volatile in the short term, but they can offer higher growth over the long term if you stay invested.

    2. Is SIP the right way to invest in small cap funds?

      SIP is usually preferred because it spreads investment over time and reduces the impact of market timing.

    3. How long should I stay invested in small cap funds?

      Ideally, you should stay invested for at least 7 to 10 years to handle volatility and benefit from growth.

    4. Can I invest lump sum in small cap funds?

      Lump sum investments are possible, but SIPs are generally safer during volatile market conditions.

    5. What percentage of my portfolio should be in small cap funds?

      For most investors, allocating around 10% to 20% of the portfolio to small caps is considered reasonable.

  • Best Mid-Cap Mutual Funds in India

    Best Mid-Cap Mutual Funds in India

    Investing is not just about chasing returns, it is about finding the right balance between growth and comfort. Many investors feel large cap investments move too slowly, while aggressive strategies can bring sleepless nights. As markets evolve, the need for a middle path becomes clear. This is where mid cap investing gains importance. It offers exposure to faster growing businesses while avoiding extreme uncertainty. For investors looking to participate in India’s long term growth story without taking outsized risks, mid cap funds deserve serious attention. That is where mid-cap mutual funds step in.

    What are Mid-Cap Mutual Funds

    Mid-cap funds invest in companies that are past the survival stage but still hungry to grow. They are expanding capacity, entering new markets, and moving toward becoming tomorrow’s large-cap. For investors who can stay patient and disciplined, mid-cap funds are often a good option to consider higher growth potential.

    Mid-cap mutual funds invest in companies ranked roughly between 101 and 250 by market capitalisation, as defined by SEBI. These companies are not unknown startups. They already have products, customers, and revenues. Mid-caps are businesses in the middle of a growth journey.

    How to Choose the Best Mid-Cap Mutual Fund 

    Choosing a mid-cap fund is less about chasing returns and more about trusting the process.

    1. Look Beyond One-Year Performance – Top-performing mid-cap funds change frequently. Focus instead on consistency across market cycles, especially how the fund behaved during corrections.
    2. Pay Attention to the Fund Manager – Mid-cap investing requires judgment. A steady fund manager with a sound investment philosophy matters far more than fascinating short-term numbers.
    3. Check Portfolio Quality – A good mid-cap fund prefers fundamentally strong businesses with growing revenue and expanding margins over momentum-driven stocks.

    Read Also: Top 10 High-Return Mutual Funds in India

    List of Best Mid-Cap Mutual Funds in India

    S. NoFundsCurrent NAVFund Size (INR Crores)Expense RatioExit Load (Period)
    1ICICI Prudential Midcap Fund319.7970501.85%1.00% (1 year)
    2Mirae Asset Midcap Fund 38.44183501.65%1.00% (1 year)
    3HDFC Mid Cap Fund 205.47922001.36%1.00% (1 year)
    4Tata Mid Cap Fund 457.3354501.84%0.50% (30 days)
    5Invesco India Mid Cap Fund 184.52103001.72%1.00% (1 year)
    6WhiteOak Capital Mid Cap Fund 20.3544501.85%1.00% (30 days)
    7Canara Robeco Mid Cap Fund17.5340501.87%1.00% (1 year)
    8ITI Mid Cap Fund 22.4713002.05%0.50% (90 days)
    9Nippon India Growth Mid Cap Fund4,296.43421001.53%1.00% (30 days)
    10Aditya Birla Sun Life Mid Cap Fund 813.9262501.87%1.00% (90 days)
    (As of 7th Jan 2026)

    Overview of Best Mid-Cap Mutual Funds

    1. ICICI Prudential Midcap Fund 

    ICICI Prudential Midcap Fund is known for its balanced approach to mid-cap investing. Instead of chasing short-term market trends, it focuses on identifying companies with sustainable business models and long-term growth potential.

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    13.79%82.61%157.35%90Nifty Midcap 150 TRI

    2. Mirae Asset Midcap Fund

    Mirae Asset Midcap Fund follows a quality-focused strategy, investing in mid-cap companies with strong balance sheets and earnings visibility. It avoids excessive risk-taking and prefers businesses with clear competitive advantages. 

    1-Year Return3-Year Return5-Year ReturnNo. of StocksBenchmark
    11.40%72.12%148.80%72Nifty Midcap 100 TRI

    3. HDFC Mid Cap Fund

    One of the most well-known names in the category, HDFC Mid Cap Fund, focuses on fundamentally strong mid-sized companies with long growth runways. Its large asset base brings stability and works well for long-term investors

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    9.85%95.41%193.19%78Nifty Midcap 150 TRI

    4. Tata Mid Cap Fund

    Tata Mid Cap Fund takes a relatively disciplined approach, balancing growth opportunities with valuation comfort. It spreads investments across sectors instead of making aggressive thematic bets, which helps control downside risk.

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    8.23%81.05%141.09%69Nifty Midcap 150 TRI

    5. Invesco India Mid Cap Fund 

    Invesco India Mid Cap Fund focuses on identifying emerging businesses early in their growth cycle. The fund maintains a research-driven approach and avoids excessive churn

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    8.23%101.23%171.52%51BSE 150 Midcap TRI

    6. WhiteOak Capital Mid Cap Fund 

    WhiteOak Capital Mid Cap Fund follows a clean, process-oriented investing style, combining growth potential with risk awareness. The fund prefers companies with strong fundamentals and avoids overly leveraged or speculative bets

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    8.06%96.39%–146BSE 150 Midcap TRI

    7. Canara Robeco Mid Cap Fund

    Canara Robeco Mid Cap Fund has gained attention for its consistent performance and disciplined stock selection. The fund leans toward quality businesses and avoids chasing hot sectors blindly. 

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    6.98%73.93%–62BSE 150 MidCap TRI 100

    8. ITI Mid Cap Fund 

    The ITI Mid Cap Fund is a smaller and relatively less-discussed fund in the category. It invests across a broad range of mid-cap companies, aiming to capture growth while managing risk.

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    6.83%89.28%–85Nifty Midcap 150 TRI

    9. Nippon India Growth Mid Cap Fund

    Nippon India Growth Mid Cap Fund is among the older funds in this category and follows a growth-oriented investing style. Over full market cycles, it has rewarded investors who stayed invested and avoided reacting to short-term underperformance.

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    7.51%93.98%179.98%100Nifty Midcap 150 TRI

    10. Aditya Birla Sun Life Mid Cap Fund 

    Aditya Birla Sun Life Mid Cap Fund focuses on identifying mid-sized companies with improving fundamentals and scalable business models. 

    1-Year Return3-Year Return 5-Year Return No. of StocksBenchmark
    6.72%75.67%135.23%81Nifty Midcap 150 TRI

    Read Also: Best Performing Mutual Funds of the Last 10 Years

    Conclusion 

    Mid-cap mutual funds are not shortcuts to quick profits. They are a source of wealth creation with patience. If you invest regularly, stay disciplined during volatility, and allow time for compounding, mid-cap funds can become the growth engine of your portfolio. The real edge doesn’t come from picking the “best” fund. It comes from staying invested when it is difficult to do so.

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    Frequently Asked Questions (FAQs)

    1. Are mid-cap mutual funds risky?

      They carry more risk than large-cap funds but are generally less volatile than small-cap funds, especially when held for the long term. 

    2. What is the ideal investment horizon for mid-cap funds? 

      A minimum investment horizon of 7-8 years is recommended to ride out market volatility.

    3. Can beginners invest in mid-cap mutual funds? 

      Beginners can invest, but it is suggested to start with SIPs and limit the exposure they are comfortable with. 

    4. How many mid-cap funds one should hold? 

      Usually, one or two well-chosen mid-cap funds are enough for diversification.

    5. Is a lump-sum investment suitable for mid-cap funds?

      Lump-sum investments can be effective if you have a long investment horizon, but staggered investing is generally considered safer.

  • Best Children’s Mutual Funds in India 2026

    Best Children’s Mutual Funds in India 2026

    The cost of education is increasing aggressively and way ahead of the return you get on traditional savings like Fixed Deposits. You require an investment option that should offer superior returns along with consistent and disciplined growth.

    Children’s Mutual Fund is specially created to cope with such a challenge. It holds the high growth capability of the stock market, which is required for wealth creation, along with a lock-in period, which encourages disciplined long-term investing and benefit from the power of compounding over time.

    This strategic investment will help your money grow at a rate that outperforms the increasing college fees, thus ensuring the substantial corpus is achieved in the next 10 to 15 years in order to give the best possible future to your child.

    The Need for Growth

    You must have read about inflation. It is the rate at which the prices rise. In India, the normal inflation rate is 5% or 6%. But the inflation rate in education is different. It rises by 10% to 12% on a yearly basis.

    This means an Rs.10 Lakhs college education will cost Rs.30 Lakhs or more once the new-born turns 18 years old. If your savings are in a Fixed Deposit, it might not grow at a rapid enough rate to keep up with this large figure. You require market-linked growth, which means your investments should grow as the Indian economy flourishes.

    What are Children’s Mutual Funds?

    These are specific mutual funds and are classified by the market regulator SEBI as ‘Solution Oriented Schemes’. The ‘solution’ here may be financing your child’s major life events such as further studies or his/her marriage.

    Unlike ordinary funds, these come with a special rule which will help you cut costs. There is a mandatory ‘lock-in’ period. This means that once you have deposited money, you cannot withdraw it for a period of 5 years or until your child is an adult 18 years.

    This lock-in effect is actually an advantage. It prevents you from withdrawing this money for such things as buying a car or going for a holiday vacation. It holds your money inside and lets it grow.

    Read Also: How to Compare Mutual Funds in India?

    Top Mutual Funds Plan for Children 

    1. SBI Children’s Fund- Investment Plan

    This fund has shown a very good performance and has given investors a return of 23% in the last 3 years. This mutual fund is volatile but powerful as well, in this the fund manager invests large amounts in equities and focuses on high growing sectors like finance and consumption. It is very high risk and is best suitable for long term investment (7+ years). 

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    22.77%27.93%32.73%

    2. ICICI Prudential Child Care Fund (Gift Plan)

    It has shown a strong performance with an annual return of 18% in the last 3 years and around 15% in the last 5 years. This is a balanced mutual fund which follows a dynamic asset allocation strategy that jumps between equity and debt to protect you during the market downturn. It is highly risky but it is reliable for long term investment of about 7-10 years.

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    18.33%15.58%15.49%

    3. HDFC Children’s Gift Fund

    This fund has a stable and consistent performance and has delivered 15% returns in a year for the last 3 years and about 16.5% in the last 5 years. This is a highly stable equity fund and here the manager maintains a large cap bias (stable players like HDFC Bank, ICICI bank), this helps in reducing the volatility. This is an aggressive hybrid fund that is highly risky and best suitable for parents that are looking to compound steadily. 

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    15.82%15.92%15.47%

    4. Tata Young Citizens Fund

    It has a moderate performance with returns of 13% per annum over the last 3 years and about 14% for the last 5 years. This fund has about 96% exposure to the equity and behaves like a Flexi-Cap fund where investment is done across different companies. This fund is highly risky with no debt cushion and is much riskier than the hybrid options available in the market.

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    13.41%13.83%5.61%

    5. SBI Children’s Fund – Savings Plan

    This fund has given a return of 12% per annum in the last 3 years. You can get maximum stability in this as this is a debt based fund where investments are mainly in bonds which give fixed income with small investments in stocks. Here the risk is between moderate to high and it is best suited to save your capital rather than purely focusing on the growth.

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    12.26%12.68%10.63%

    6. Aditya Birla Sun Life Bal Bhavishya Yojna

    This fund has shown a moderate performance with 15% annual returns in the last 3 years. The fund focuses on growth and operates as a diversified equity fund that has a mix of large cap and mid cap stocks. It is high and is best suitable if you are looking for an equity based portfolio for your child’s future.

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    16.99%12.67%13.09%

    7. LIC MF Children’s Fund

    This fund has given a return of 11% in the last 3 years making it behind the other similar mutual funds. It has low AUM risk and even the size of the fund is small, which can result in liquidity problems or even expense ratio fluctuations. It is a very risky fund although the AUM is low with lower returns but other options in the market. 

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    12.45%10.01%10.20%

    8. UTI Children’s Equity Fund

    This has shown a stable performance and has delivered 15% returns in the last 3 years and about 14% in the last 5 years. The fund manager follows a “Growth at Reasonable Price” (GARP) strategy, avoiding overly expensive stocks. This is a high risk based fund which has pure equity funds best suitable for aggressive investors.

    3 Year Return (CAGR)5 Year Return (CAGR)Returns Since Inception (CAGR)
    15.43%14.07%13..75%

    Overview of Best Mutual Funds Plan for Children 

    Fund NameCategoryAUM (Rs.Cr)Expense RatioNo. of StocksBenchmark
    SBI Children’s Fund- Investment PlanAggressive Hybrid5,0531.83%38CRISIL Hybrid 35+65 Aggressive Index
    ICICI Prudential Child Care Fund (Gift Plan)Aggressive Hybrid1,4242.17%91NIFTY 50 Hybrid Composite Debt 65:35 Index
    HDFC Children’s Gift FundAggressive Hybrid 10,6321.74%44NIFTY 50 Hybrid Composite Debt 65:35 Index
    Tata Young Citizens FundFlexi Cap/Solution3672.59%51NIFTY 500 TRI
    SBI Children’s Fund – Savings PlanConservative Hybrid 3,2251.24%35NIFTY 50 Hybrid Composite Debt 15:85 Index
    Aditya Birla Sun Life Bal Bhavishya YojnaFlexi Cap/Solution1,2032.15%72NIFTY 500 TRI
    LIC MF Children’s FundFlexi Cap/Solution162.45%64CRISIL Hybrid 35+65 Aggressive Index
    UTI Children’s Equity FundFlexi Cap/Solution1,1802.22%61NIFTY 500 TRI

    Read Also: Best Investment Options in India

    Key Features of Mutual Funds for Children

    • Equity (Stocks): A major portion of it is invested in stock of companies. It is the portion that helps multiply your money quickly in a matter of years.
    • Debt (Bonds): Some portion of the money goes to safe government bonds or to safe businesses. This portion functions as a safety cushion. If your stock goes down, this portion holds your entire money intact.

    Aggressive and Conservative Plans

    • Aggressive Plans: In these plans, the portfolio is mainly invested in the stock market (approximately 65% to 80%). It is suitable for the child if he/she is very young, as you will have more than 10 years to grow the savings. Higher growth is associated with higher risk, and time helps to overcome the risk.
    • Conservative Plans: Money is mostly invested in secure bonds and a comparatively lower amount in stocks. This is ideal for your child if he or she is 15 years old already and the money is needed immediately. There is less point in risking the money if the target is achieved.

    Advantages of Children’s Mutual Fund Plans

    Replacing Your Future Self With Your Bigger Present Self

    Compounding is simple arithmetic where your interest earns even more interest. By investing Rs.10,000 every month for 15 years at a 12% return, you can walk away with about Rs.50 Lakhs. The total amount that the principal put in was only Rs.18 Lakhs. The rest was house money, the money that your money made for you. Time is the best ingredient for this magic formula.

    Lock-in Induced Discipline

    We always tend to dip into our savings for short-term requirements. The 5-year lock-in in these funds rules that out. It legally assures that the money intended for your child’s college fees is not touched. We are told how the enforced discipline is the reason many parents opt for this over open-ended funds.

    Education at High-Rate

    The rate of inflation in education is well known to be on the order of 10% to 12%. Traditional savings like PPF give around 7.1%. The PPF’s actual purchasing power is falling relatively as the cost of education is rising. 

    Tax Benefits

    You pay taxes your gains are taxed favorably even as you invest with your post-tax income. In case you sell the fund after a year, profit exceeding Rs.1.25 Lakh is at 12.5%. This is much lower than the 30% tax you might pay on Fixed Deposit interest if you are in the highest tax bracket.    

    Things to Consider Before Investing in Children’s Mutual Fund Plans

    Assessing Time Horizon

    The investment choice depends entirely on how many years remain until you need the money. If your child is 0 to 5 years old, you have a long horizon and should choose aggressive funds rich in stocks for maximum growth. If the child is 10 to 12 years old, a balanced approach is safer. However, if the child is over 15, you have very little time to recover from market crashes, so you must avoid risky equity funds and stick to safer debt funds or conservative plans.

    Risk

    Think about whether you can bear what happens when the investment value goes down temporarily. The stock market fluctuates and goes down and up. In the end, it goes up. However, for a short period, it can be alarming. If you tend to panic, select a fund that holds a larger amount of debts such as HDFC Children’s Fund.

    Minimizing Costs

    Every mutual fund incurs an expense ratio. Always select the Direct Plan while making an investment. This is possible through apps like Zerodha or Groww. The Direct Plan incurs lower expense ratios (approximately 0.8% to 1%) in contrast to the Regular Plan (approximately 2%). The difference of 1% in 15 years results in a massive difference.   

    Regulatory and Tax Implications

    Opening the Account

    These funds are opened in the name of the Minor Child. You will be the Guardian. You cannot add a joint holder. The investment belongs to the child. You need the child’s birth certificate and your own KYC documents (PAN/Aadhaar) to open the account. The money can come from your bank account or the child’s bank account.    

    Clubbing of Income

    Income earned by a minor is added to the parent’s income for tax purposes (“Clubbing”). You get a small exemption of Rs.1,500 per child per year. However, you only pay tax on mutual funds when you sell. If you hold until the child turns 18, you defer the tax liability.

    Child Turning 18 (Minor to Major)

    When the child turns 18, the account freezes. You must submit a “Minor to Major” application. The child (now adult) needs their own PAN card, bank account, and KYC. The control of the money legally shifts to the child.

    Read Also: Best Safe Investments with High Returns in India

    Conclusion 

    Future security is the best gift you can give a child. When you plan now, you help make sure that money won’t stand in the way of your child’s education or career.

    A child mutual fund gives you the discipline of a lock-in and the benefit of market-linked gains. The same effect can be noticed in funds like the SBI Magnum Children’s Benefit Fund which has proved that one can significantly beat inflation with right strategy. Keep that in mind, start early. Even if you can’t start big, start investing now. Small sacrifices now will build a mountain for you child to stand on tomorrow.

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    Frequently Asked Questions (FAQs)

    1. Can the invested amount be withdrawn before the lock in period is over? 

      No, the lock-in period is a mandatory factor in these funds. You cannot withdraw the money before the lock in period or until the child turns 18.

    2. Who pays the tax on the gains?

      As long as the child is a minor the parent (guardian) pays the tax on the gains. The income is clubbed with the parent who earns more. Once the child turns 18 they become responsible for the tax on any future gains.    

    3. What documents are required before opening the minor account?

      A child’s birth certificate or passport is the primary document that is required as this is the age proof, also PAN card and Aadhar card of the parents or guardian is required.    

    4. Can I invest the money on my name or is it mandatory to do the investment on a child’s name?

      You can invest in either of them as it is totally your choice and there is no tax benefit if you do it on a child’s name due to the clubbing provision.    

    5. What happens if I die? 

      If the guardian passes away a new guardian (usually the other parent or a court-appointed legal guardian) must be registered with the fund house.    

  • What is Expense Ratio in Mutual Funds?

    What is Expense Ratio in Mutual Funds?

    When two people invest in the same mutual fund but get different returns, the reason is often not immediately obvious. This reason is the expense ratio. It’s a fee in mutual funds that is deducted silently every day. In this blog, you will understand what an expense ratio is in a mutual fund, how it is charged, and why the expense ratio in mutual funds affects your returns in the long run.

    What Is Expense Ratio in Mutual Funds?

    The total cost of managing a mutual fund is called the expense ratio. The fund house charges this fee for various services, including deciding where to invest your money, when to buy and sell, conducting research, and maintaining records. This cost, expressed as a percentage, is the expense ratio.

    For example, if you invest ₹1,00,000 in a mutual fund with an expense ratio of 1%, approximately ₹1,000 will be deducted annually as management fees. This deduction happens gradually and is reflected in the NAV. This is why, over the long term, the expense ratio impacts your overall returns, even if it seems small in percentage terms.

    What Does the Expense Ratio Actually Pay For?

    1. Fund Manager and Research Team Expenses : Investment decisions in mutual funds are made by the fund manager and their research team. The costs associated with company analysis, portfolio review, and market tracking are included in the expense ratio.
    2. Portfolio Management and Technology Costs : Managing a fund requires data systems, analytics tools, and trading infrastructure. The expenses incurred on these technical resources are also part of the expense ratio.
    3. Record Keeping and Regulatory Compliance : Maintaining investor records, calculating NAV, conducting audits, and complying with SEBI regulations are essential. These administrative costs are also included in the expense ratio.
    4. Distribution and Marketing Costs (Regular Plans) : In regular mutual fund plans, commissions are paid to distributors and advisors. This is why the expense ratio of regular plans is higher than that of direct plans.

    Read Also: How to Compare Mutual Funds in India?

    How Expense Ratio Is Charged ? 

    The expense ratio is not deducted by the mutual fund all at once at the end of the year. This expense is deducted daily in small increments from the fund’s value throughout the year. This is why investors never see a separate charge.

    DescriptionStatistics
    Your investmentRs 1,00,000
    Fund’s Expense Ratio1% annually
    Total annual expensesRs 1,000
    Daily expensesApproximately Rs 2.74

    This means that the mutual fund adjusts its Net Asset Value (NAV) by approximately ₹2–3 every day. This amount is so small that it’s not noticeable on a daily basis, but by the end of the year, this expense adds up to ₹1,000.

    Now imagine if this investment continues for 10–15 years. Then this expense is not limited to just ₹1,000; due to compounding, it also reduces your potential returns.

    This is why, even though the expense ratio may seem small, its impact can be quite significant in the long run.

    Direct Plan vs Regular Plan: Expense Ratio 

    PointDirect PlanRegular Plan
    Expense RatioIt is lessIt is higher than direct plan
    CommissionNo commissionCommission to Distributor/advisor
    How does investing work?Directly from AMCThrough a broker or advisor or distributor
    Right for whom?Those who have an understanding of investing themselvesNew investors who need guidance

    How Expense Ratio Impacts Long-Term Returns ? 

    For example, there are two mutual funds. Both have an annual gross return of 12%, the only difference being the expense ratio.

    DescriptionFund AFund B
    Annual Return (before expenses)12%12%
    Expense Ratio0.5%1.5%
    Net Return11.5%10.5%
    Initial investment1,00,0001,00,000

    Estimated value after 10 years:

    • Fund A: Approximately ₹2.97 lakh
    • Fund B: Approximately ₹2.72 lakh

    Estimated value after 20 years:

    • Fund A: Approximately ₹8.73 lakh
    • Fund B: Approximately ₹7.33 lakh

    The difference here is only a 1% expense ratio, but over 20 years, it amounts to a difference of approximately ₹1.4 lakh.

    Read Also: Mutual Fund Fees & Charges in India

    Common Myths About Expense Ratio

    Myth 1: Low Expense Ratio = Best Fund

    A low expense ratio can be a good sign, but choosing a fund solely based on this is not advisable. Sometimes, a fund with a slightly higher expense ratio can deliver better returns in the long run due to a superior strategy and disciplined management. 

    Myth 2: If the Returns are Good, the Expense Ratio Doesn’t Matter

    This is a common misconception. The expense ratio is deducted from your returns every year. While the returns might look good today, if the expenses are high, those expenses will slow down your compounding over the long term.

    Myth 3: The Impact of Expense Ratio is Less on One-Time Investments

    Whether it’s a Systematic Investment Plan (SIP) or a lump sum investment, the expense ratio applies to both. The longer the investment is held, the more pronounced its impact will be. Therefore, the expense ratio should not be taken lightly even in the case of a one-time investment.

    Conclusion

    The expense ratio seems small, so people often don’t take it seriously. The difference isn’t noticeable at first, but over time, these expenses gradually reduce your returns. Therefore, when choosing a mutual fund, don’t just focus on high returns; understand how much you’re paying for those returns. That’s the smart approach.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1Types of Mutual Funds in India
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    4What Is An IPO Mutual Fund? Should You Invest?
    5Who Regulates Mutual Funds in India?

    Frequently Asked Questions (FAQs)

    1. What is the expense ratio in a mutual fund?

      It’s the cost of running the fund, which is adjusted from your investment.

    2. Does the expense ratio get deducted from my bank account?

      No, it’s gradually included within the NAV (Net Asset Value).

    3. Is a low expense ratio always good?

      Often yes, but it’s also important to consider the fund’s performance and management.

    4. Does the expense ratio really matter in the long term?

      Yes, its impact becomes clearly visible over time.

    5. Why is the expense ratio higher in regular plans?

      Because it includes the advisor’s or broker’s commission.

  • Best Long-Term Mutual Funds to Invest in India for 2026

    Best Long-Term Mutual Funds to Invest in India for 2026

    It takes patience, time, and a realistic plan to grow your money. Mutual funds can help with that. They provide an easy and efficient way for investors to contribute to the growth of the economy over the long run. Selecting the right mutual funds can have a significant impact on your long-term financial security, retirement, or your child’s future.

    We will discuss some of the top long-term mutual funds available in this blog and explain how to choose the ones that best fit your objectives.

    Factors to Consider Before Choosing a Long-term Mutual Fund 

    Here are factors that  to be considered before choosing a Long-Term Mutual Fund:

    1. Begin by finding a clear objective

    Clearly defining the purpose of your investment (retirement, education for children, accumulation of wealth over time, etc.) helps you stay focused on your blogs and reduces the chances of emotional decision-making during market fluctuations.

    2. Take your time to think

    If you want to make money over the long term, staying invested for at least 5–10 years is generally recommended. More time helps smooth out market ups and downs.

    3. Consider Risks

    Choose a fund that matches with your risk tolerance level. If you don’t like volatility, stick with large-cap or index funds. Mid- and small-cap funds may offer higher growth potential over time but come with higher volatility.

    4. Know where the fund invests

    Find out if the fund only invests in large, medium, or small companies, or a mix of all three or mix equities with bonds and commodities. It is more important to have a clear and consistent plan than to have multiple themes.

    5. Never believe the hype; look for consistency.

    Do not run after the best performer from last year. Funds that give you steady returns no matter what the market is doing are better long-term friends.

    The best long-term mutual fund isn’t the one with the most bells and whistles. It’s the one that meets your needs, lets you stay invested for years without worrying about it, and is comfortable with the level of risk.

    List of Best Long-term Mutual Funds to Invest In 

    The following are the top 10 list of Mutuals Funds for long-term investment:

    S. NoFundsLatest NAVAUM (Cr.)Expense RatioExit Load (Period)Sharpe Ratio
    1SBI Focused Fund381.142,7731.53%0.25 (30D)1.08
    2ICICI Prudential Focused Equity Fund97.8614,1461.70%1.00 (365D)1.27
    3ICICI Prudential Large & Mid Cap Fund1,052.5826,9391.63%1.00 (30D)1.21
    4Kotak Focused Fund 27.033,9421.88%1.00 (365D)0.89
    5HDFC Flexi Cap Fund2,072.3594,0691.35%1.00 (365D)1.36
    6ICICI Prudential Large Cap Fund115.5178,1601.40%1.00 (365D)1.04
    7Aditya Birla Sun Life Flexi Cap Fund1,893.3324,8151.65%1.00 (90D)0.93
    8ICICI Prudential Midcap Fund315.287,0551.85%1.00 (365D)1.00
    9HDFC Focused Fund238.7426,2301.61%1.00 (365D)1.41
    10Tata Flexi Cap Fund24.983,6701.89%0.50 (30D)0.90
    (Data as of 1st January, 2026)

    Read Also: Top 10 High-Return Mutual Funds in India

    Best Long-Term Mutual Funds – An Overview 

    1. SBI Focused Fund

    The fund follows a concentrated investment approach and holds a limited number of high-conviction stocks. Minimum investment in this fund is INR 5,000. Minimum SIP amount is INR 500. The fund was launched on 11 October, 2004. Some of the top holdings of the fund include HDFC Bank, SBI, Muthoot Finance, Bajaj Finserv etc. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    14.20%18.48%16.78%33S&P BSE 500

    2. ICICI Prudential Focused Equity Fund 

    The idea of this fund is to back businesses with strong fundamentals. It is best suited for long-term investors. Minimum investment amount is INR 5,000. Minimum SIP Amount is 100. The launch date of the fund was 28th May 2009. Some of the top holdings of the fund include Infosys, ICICI Bank, HDFC Bank Axis Bank. etc. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    15.15%23.51%22.07%41S&P BSE 500

    3. ICICI Prudential Large & Mid Cap Fund

    The fund has an objective to balance stability and growth by investing in both large and mid-sized companies. Large-cap stocks provide relative stability while mid-caps offer higher growth potential. Minimum Investment amount is INR 5,000, and min SIP amount is INR 100. The fund was launched on 9 July 1998. Some of the top holdings include Axis Bank, SBI Cards, Nykaa, ICICI Bank, etc. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    12.63%21.47%23.17%108S&P BSE 500

    4. Kotak Focused Fund 

    Kotak Focused Fund uses bottom-up stock selection to invest in a small portfolio of top companies. Those with solid balance sheets, competent management, and long-term earnings growth are preferred by the fund. The minimum investment amount is INR 100, and the minimum SIP amount is also INR 100. The fund was launched on 16 July 2019. Some of the top holdings include ICICI Bank, HDFC Bank, Bharti Airtel, Zomato (Eternal Ltd.), etc. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    12.45%17.76%17.27%30S&P BSE 500

    5. HDFC Flexi Cap Fund

    Depending on market conditions, the HDFC Flexi Cap Fund invests in large-cap, mid-cap, and small-cap stocks to provide flexibility. In addition to capturing opportunities across segments, its diversified allocation helps in risk management. The minimum investment amount is INR 100, and the minimum SIP amount is also INR 100. The fund was launched on 1 January 1995. Some of the top holdings include ICICI Bank, HDFC Bank, Axis Bank, and SBI, among others. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    10.55%21.70%23.76%57S&P BSE 500

    6. ICICI Prudential Large Cap Fund

    This fund mostly invests in large-cap companies that are well-known and prominent in their respective sectors. Compared to mid-cap and small-cap funds, this one is less volatile. The minimum investment amount is INR 100, and the minimum SIP amount is also INR 100. The fund was launched on 23 May 2008. Some of the top holdings include ICICI Bank, HDFC Bank, Reliance, Larsen & Toubro, and Airtel, among others. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    10.16%18.51%18.18%88S&P BSE 500

    7. Aditya Birla Sun Life Flexi Cap Fund

    Aditya Birla The Sun Life Flexi Cap Fund invests in a wide range of market capitalizations with a flexible investment approach. The fund focuses on companies that are fundamentally strong and uses both growth and value styles. The minimum investment amount is INR 100, and the minimum SIP amount is also INR 100. The fund was launched on 27 August 1998. Some of the top holdings include ICICI Bank, HDFC Bank, Infosys, Kotak Mahindra, etc. 

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    9.9018.43%16.49%78S&P BSE 500

    8. ICICI Prudential Midcap Fund

    The ICICI Prudential Midcap Fund invests in mid-sized companies. The fund may be volatile in the short term, but it can give you higher returns over the long term. It is good for investors who are willing to take more risk and are willing to wait a long time for their money to grow. The minimum investment amount is INR 5,000, and the minimum SIP amount is also INR 100. The fund was launched on 28 October 2004. Some of the top holdings include Muthoot Finance, BSE, Jindal Steel, UPL, MCX, etc.

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    10.86%23.41%22.71%90S&P BSE 500

    9. HDFC Focused Fund 

    HDFC Focused Fund has a small number of high-quality stocks in its portfolio, added after extensive research. The fund’s primary objectives are to see long-term profits and sustainable companies. Since it is concentrated, performance may change in the short term. The minimum investment amount is INR 100, and the minimum SIP amount is also INR 100. The fund was launched on 17 September 2004. Some of the top holdings include ICICI Bank, HDFC Bank, Axis Bank, and SBI, among others.

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    10.38%21.48%24..31%33S&P BSE 500

    10. Tata Flexi Cap Fund

    The Tata Flexi Cap Fund can invest in large-cap, mid-cap, and small-cap stocks without limitations on how much to invest in each. This lets the manager take advantage of market opportunities. The flexible strategy aims for long-term capital growth while reducing risk by diversifying investments across different assets.

    The minimum investment amount is INR 5,000, and the minimum SIP amount is also INR 100. The fund was launched on 6 September 2018. Some of the top holdings include ICICI Bank, HDFC Bank, Reliance, L&T, Axis Bank, etc.

    1-Year Return3-Year Return (CAGR)5-Year Return (CAGR)No. of StocksBenchmark
    9.23%16.94%14.28%60S&P BSE 500

    Risks Involved in investing in Long-Term Mutual Funds

    The risks related to investing in Long-term Mutual Funds are as follows:

    1. Returns are not guaranteed – Unlike fixed deposits, mutual funds do not give fixed returns. Performance can vary from year to year.
    2. Higher volatility in mid and small-cap funds – These funds can offer strong long-term returns but may see sharper ups and downs in the short run.
    3. Changes in fund management – A change in fund manager or strategy can impact how the fund performs for some time.
    4. Temporary underperformance – Even good funds may underperform the market or peers during certain phases. This is a normal part of long-term investing.
    5. Emotional decisions by investors – Panic selling during market corrections or frequent switching between funds often hurts returns more than market volatility.

    Read Also: Best Thematic Mutual Funds in India

    Conclusion 

    Long-term investing is not about chasing temporary profits or trying to outsmart the markets. It is about being steady, managing your emotions, and being patient with your investments so they have time to grow. If you choose the mutual funds for your financial goals, wealth creation is certain. Develop a strong financial plan, stay disciplined with your investments, and let the magic of compounding work for you.

    For a Seamless investing experience, start your journey with Pocketful now!

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    9What is TREPS & Why Mutual Funds Invest in it?
    10History of Mutual Funds in India

    Frequently Asked Questions (FAQs)

    1. Are long-term mutual funds safe? 

      They carry market risk, but staying invested for long periods helps in reducing volatility and improving returns. 

    2. Is SIP better than a lump sum? 

      SIP is better for investors since it gives them the benefit of rupee cost averaging. 

    3. How many mutual funds should I hold for the long term?

      For more investors, a few well-chosen funds are enough to stay diversified.

    4. Can I stop my SIP during a market fall? 

      It is usually suggested to continue your SIPs during market corrections. 

    5. What if a fund underperforms for a few years? 

      Temporary underperformance is normal. Exit only if there is a clear issue with a fund’s strategy or management. It is suggested to consult your financial advisor before making an investment decision.

  • Best SIP Mutual Funds in India

    Best SIP Mutual Funds in India

    For most people, investing does not start with big amounts or perfect timing. It starts with small, regular steps, and that is where SIPs kick in. With a Systematic Investment Plan, you can invest regularly, no matter what the market goes through, and then gradually build up your wealth over time.

    There are so many mutual funds to choose from these days that it can be hard to know which SIP is right for you. Large cap, mid cap, small cap, sectoral, flexi cap, each serves a different purpose. 

    In this blog, we will break down some of the best SIP mutual funds and explain how to choose the right one based on your goals, risk appetite, and investment horizon.

    How to Choose the Best SIP Mutual Funds

    Choosing the right SIP mutual fund doesn’t have to be complicated. It is not about chasing the highest returns or picking the most commonly discussed fund. Instead, it is about finding a fund that meets your needs, your time frame, and how prepared you are to face ups and downs.

    We have mentioned below some points that an investor can consider before starting their SIP. 

    1. Be Specific About Why You are Investing- Before picking any fund, ask yourself one basic question: What am I investing for?

    It could be for long-term wealth, retirement, your child’s education, or even just building a financial cushion. Choosing the right fund is much easier once you know what you want to do.

    2. Consider how long you can keep your money invested-  Time is one of the biggest advantages in SIP investing.  If you’re investing for the long term, temporary market swings won’t matter much. The more time you have to handle volatility, the better it is.

    3. Be Truthful About How Comfortable You Are with Risk- Some people are comfortable seeing their investments fluctuate. Others get stressed the moment markets fall. There is no right or wrong here. What matters is choosing a fund that lets you stay invested without panic.  

    4. Look for Consistency, Not Just Big Returns- Instead of looking at how a fund did last year, look at how it has done over the years. A good SIP fund should do well in all kinds of market conditions. Consistency over time is far more valuable than occasional spikes in returns.

    5. Understand How the Fund Is Managed- There is a certain style that each fund follows. Some focus on stable companies, some chase growth, and others look for undervalued opportunities. The stability of a fund manager in decision-making often leads to better long-term results.

    6. Keep an Eye on Costs, But Do not Obsess- Expense ratio is important because it affects how much money you make over time. Lower costs are usually better, but they shouldn’t be the only thing you think about. If a fund has consistently done well, it may still be worth it to pay a little more.

    7. Check What the Fund Actually Invests In- Take a quick look at the fund’s top holdings and sector exposure. A well-diversified portfolio lowers risk and keeps you from relying too much on one stock or sector.

    Read Also: Best SIP Apps in India for Investment

    List of Top 10 SIP Mutual Funds

    S. NoFund NameCategoryLaunch DateMin SIPAUM (₹ Cr)NAV (₹)3 Yr SIP Ret (%)5 Yr SIP Ret (%)
    1ICICI Prudential Infrastructure FundEquity – Infrastructure31 Aug 2005₹1008,160194.7817.8824.36
    2Motilal Oswal Midcap FundEquity – Mid Cap24 Feb 2014₹50038,003100.418.8523.66
    3Bandhan Small Cap FundEquity – Small Cap25 Feb 2020₹10018,17446.2322.7223.24
    4HDFC Mid Cap FundEquity – Mid Cap25 Jun 2007₹10092,169202.3320.6822.94
    5Franklin Build India FundEquity -Thematic (Infra)4 Sep 2009₹5003,068141.4517.8922.35
    6ICICI Prudential Value FundEquity – Value Oriented16 Aug 2004₹10060,391498.0819.1620.57
    7Nippon India Growth Mid Cap FundEquity – Mid Cap8 Oct 1995₹10040,042700.7119.4121.48
    8HDFC Focused FundEquity – Flexi Cap17 Sep 2004₹10026,230238.4518.9821.26
    9Motilal Oswal Large & Mid Cap FundEquity – Flexi Cap17 Oct 2019₹10015,14633.3419.9521.13
    10HDFC Flexi Cap FundEquity – Flexi Cap1 Jan 1995₹10094,0692,073.2819.4921.06
    (Data as of 02th Janurary, 2026)

    1. ICICI Prudential Infrastructure Fund

    ICICI Prudential Mutual Fund is a well-known name in India’s mutual fund industry. It began in 1993 and is backed by ICICI Bank and Prudential Plc, a UK-based company. The fund house has built a strong reputation for investing driven by research. It has a diverse range of funds across various categories. Exit Load is 1% for redemption within 15 days. Return since launch is 15.75%. The Fund Manager is Ihab Dalwani. 

    2. Motilal Oswal Midcap Fund 

    Motilal Oswal Financial Services started Motilal Oswal Mutual Fund in 2008 and is based in Mumbai. It manages an array of different mutual fund schemes and tries to add value through extensive research and active fund management. Exit Load is 1% for redemption within 365 days. Return since launch is 21.58%. The Fund Manager is Niket Shah. 

    3. Bandhan Small Cap Fund 

    Bandhan Mutual Fund is one of India’s oldest fund houses and has been managing funds since 2000. Bandhan Financial Holdings bought it and changed its name from IDFC Mutual Fund to Bandhan Financial Holdings. Today, it offers a wide range of equity, debt, and hybrid funds. Exit Load is 1% for redemption within 365 days. Return since launch is 30.21%. Fund Managers of the fund are Kirthi Jain & Manish Gunwani. 

    4. HDFC Mid Cap Fund 

    Founded in 1999, HDFC Mutual Fund is one of the oldest and most well-known AMCs in India. It is part of the prominent HDFC Group. It offers different mutual fund schemes in multiple categories. Exit Load is 1% for redemption within 365 days. Return since launch is 17.67%. The fund manager is Chirag Setalvad.

    5. Franklin Build India Fund 

    As a part of the international investment company Franklin Templeton, Franklin Templeton Mutual Fund has been operating in India for many years. It has long offered a variety of debt, equity, and hybrid funds and is renowned for its long-term, research-driven investment philosophy. Exit Load is 1% for redemption within 365 days. Return since launch is 17.67%. The Fund Manager is Ajay Argal.

    6. ICICI Prudential Value Fund 

    This fund follows a value investing philosophy, focusing on stocks that are undervalued when compared to their intrinsic value. Exit Load is 1% for redemption within 365 days. Return since launch is 20.10%. The Fund Manager is Dharmesh Kakkad. 

    7. Nippon India Growth Mid Cap Fund 

    Nippon India Mutual Fund was founded in 1995 and is among India’s largest and fastest-growing AMCs. It manages a variety of equity, debt, hybrid, and index funds and is backed by Nippon Life Insurance of Japan. Exit Load is 1% for redemption within 30 days. Return since launch is 22.15%

    8. HDFC Focused Fund 

    A fund that follows a focused investing approach and concentrates its portfolio on a select number of companies. Exit Load is 1% for redemption within 365 days. Return since launch is 16.10%. The Fund Manager is Gopal Agarwal. The fund is generally chosen by investors who believe in quality over quantity. 

    9. Motilal Oswal Large & Mid Cap Fund 

    This fund is offered by Motilal Oswal Mutual Fund, a Mumbai-based AMC known for its strong research capabilities. The fund invests in both large-cap and mid-cap stocks, blending stability with growth potential. Exit Load is 1% for redemption within 365 days. Return since launch is 21.60%. The Fund Manager is Ajay Khandelwal.

    10. HDFC Flexi Cap Fund 

    The fund has been in existence for over 30 years. The approach is to balance risk and reward. 

    Exit Load is 1% for redemption within 365 days. Return since launch is 18.80%. The fund manager is Chirag Setalvad. 

    Start your investing journey with Pocketful for seamless, easy, and smarter investing—track, analyze, and invest with confidence, all in one simple platform.

    Read Also: Top 10 High-Return Mutual Funds in India

    Conclusion 

    There isn’t a “best” SIP mutual fund that works for everyone. The right fund is one that fits your financial goals, your risk tolerance, and lets you stay invested calmly through market ups and downs. SIP investing is less about guessing what will happen in the markets and more about being disciplined and patient if you pick the right mix of funds and give your investments enough time.

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    Frequently Asked Questions (FAQs)

    1. What is SIP in Mutual Funds?

      An SIP lets you invest a fixed amount regularly in a mutual fund instead of investing a lump sum at once. 

    2. Are SIPs safe investments? 

      SIPs are market-linked, so returns are not guaranteed, but they help reduce risk through disciplined investing over time. 

    3. Can I stop or pause my SIP anytime?

      Yes, SIPs are flexible and can be paused, modified, or stopped anytime. 

    4. Do SIPs give guaranteed returns? 

      No, SIP returns depend on market performance, but long-term investing improves return potential.

    5. How many SIPs should I have at one time? 

      It is better to have a few well-chosen SIPs aligned with your goals rather than too many overlapping funds. 

  • Best Gilt Mutual Funds in India: Returns, Risks & Top Picks

    Best Gilt Mutual Funds in India: Returns, Risks & Top Picks

    In 2026, India’s bond and interest rate environment has become crucial for investors. Fluctuations in interest rates are being observed due to efforts to control inflation and the policies of the Reserve Bank of India (RBI). In such a scenario, many investors are turning to government-backed mutual funds, where credit risk is virtually non-existent. Gilt mutual funds are considered useful for investors who seek stable returns with a safe option and want to maintain a balanced portfolio. This article will help you understand gilt fund returns, the risks associated with them, and suitable gilt funds for 2026.

    What Are Gilt Mutual Funds?

    Gilt mutual funds are included in the debt mutual fund categories defined by SEBI (Securities and Exchange Board of India). The primary objective of these funds is to invest investors’ money in government bonds to minimize credit risk.

    Best Gilt Mutual Funds to invest in India

    1. SBI Gilt Fund
    2. ICICI Prudential Gilt Fund
    3. HDFC Gilt Fund
    4. Nippon India Gilt Fund
    5. Baroda BNP Paribas Gilt Fund
    6. Tata Gilt Securities Fund
    7. Axis Gilt Fund
    8. UTI Gilt Fund
    9. Quant Gilt Fund
    10. PGIM India Gilt Fund

    Best Gilt Mutual Funds – An Overview

    1. SBI Gilt Fund

    The SBI Gilt Fund is managed by SBI Mutual Fund, which was established on February 7, 1992. This fund invests exclusively in government bonds and exhibits stability due to its large size. The portfolio has a significant allocation to government securities maturing between 2032 and 2055, such as bonds maturing in 2040 and 2035, giving it long-duration exposure. The fund is managed by Sudhir Agarwal.

    Fund Details : 

    DetailsInformation
    Current NAV70.07
    Fund Size11,033.35
    Expense Ratio0.95%
    Minimum Investment₹5,000
    Minimum SIP₹500
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerSudhir Agarwal

    Fund Performance

    MetricValue
    3-year return7.33
    5-year return6.09
    Alpha-0.07%
    Beta1.05
    Sharpe Ratio0.05
    Risk6.83%

    2. ICICI Prudential Gilt Fund

    ICICI Prudential Gilt Fund is a pure government bond-based mutual fund managed by ICICI Prudential AMC, which was launched in 1993. This fund invests its money exclusively in bonds issued by the central and state governments, thus eliminating the risk of credit default. Its portfolio includes long-term G-Secs maturing between 2055 and 2065, along with some State Development Loans, which allows the fund to perform well during periods of falling interest rates.

    Fund Details : 

    DetailsInformation
    Current NAV112.83
    Fund Size92,15.50
    Expense Ratio1.10%
    Minimum Investment₹5,000
    Minimum SIP₹1,000
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerManish Banthia

    Fund Performance

    MetricValue
    3-year return8.21
    5-year return6.69
    Category Average (3Y)6.34%
    Alpha0.02%
    Beta0.62
    Sharpe Ratio0.16
    Risk7.65%

    3. HDFC Gilt Fund

    The HDFC Gilt Fund is managed by HDFC Mutual Fund and was launched on December 10, 1999. This fund invests exclusively in bonds issued by the central government and has been active in the gilt segment for a long time. Its portfolio includes government bonds maturing between 2031 and 2065, making it suitable for medium- to long-term investors. Fund manager Anil Bamboli manages the duration of the portfolio keeping the prevailing interest rate environment in mind.

    Fund Details : 

    DetailsInformation
    Current NAV58.57
    Fund Size2,938.91
    Expense Ratio0.89%
    Minimum Investment₹100
    Minimum SIP₹100
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerAnil Bamboli

    Fund Performance

    MetricValue
    3-year return7.22
    5-year return5.35
    Alpha-0.07%
    Beta0.91
    Sharpe Ratio0.04
    Risk6.77%

    4 . Nippon India Gilt Fund

    The Nippon India Gilt Fund is managed by Nippon India Mutual Fund, which was established on February 24, 1995. This fund invests exclusively in bonds issued by the central and state governments. The portfolio has a significant allocation to long-term G-Secs maturing between 2039 and 2064, along with some State Development Loans (SDLs) and net current assets to maintain liquidity. The fund is managed by Pranay Sinha, who focuses on balancing duration and risk.

    Fund Details : 

    DetailsInformation
    Current NAV42.92
    Fund Size1,862.21
    Expense Ratio1.28%
    Minimum Investment₹5,000
    Minimum SIP₹100
    Exit Load0.25% up to 7 days; Nil thereafter
    Lock-in PeriodNot Applicable
    Fund ManagerPranay Sinha

    Fund Performance

    MetricValue
    3-year return7.04
    5-year return5.44
    Alpha-0.13%
    Beta1.09
    Sharpe Ratio-0.01
    Risk6.20%

    5. Baroda BNP Paribas Gilt Fund

    The Baroda BNP Paribas Gilt Fund is managed by Baroda BNP Paribas Mutual Fund and was launched on November 4, 2003. This fund invests exclusively in government bonds and its portfolio has a significant allocation to G-Secs maturing between 2035 and 2065. The fund focuses on stable duration management to mitigate the impact of interest rate fluctuations. It is managed by Gurvinder Singh Vasan.

    Fund Details : 

    DetailsInformation
    Current NAV46.96
    Fund Size1,326.61
    Expense Ratio0.45%
    Minimum Investment₹5,000
    Minimum SIP₹500
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerGurvinder Singh Wasan

    Fund Performance

    MetricValue
    3-year return7.58
    5-year return5.55
    Alpha-0.04%
    Beta1.02
    Sharpe Ratio0.10
    Risk7.23%

    6. Tata Gilt Securities Fund

    The Tata Gilt Securities Fund is managed by Tata Mutual Fund and was launched on March 15, 1994. This fund focuses entirely on government bonds and invests in bonds issued by the central government as well as some state governments. The portfolio includes long-term G-Secs maturing between 2033 and 2074, making the fund sensitive to changes in interest rates. Additionally, liquidity is maintained through holdings in Repo Instruments. The fund is managed by Akhil Mittal.

    Fund Details : 

    DetailsInformation
    Current NAV87.57
    Fund Size1,288.11
    Expense Ratio1.37%
    Minimum Investment₹5,000
    Minimum SIP₹150
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerAkhil Mittal

    Fund Performance

    MetricValue
    3-year return7.62
    5-year return5.59
    Alpha-0.12%
    Beta1.12
    Sharpe Ratio0.01
    Risk6.53%

    7. Axis Gilt Fund

    The Axis Gilt Fund is managed by Axis Mutual Fund and was launched on January 13, 2009. This fund invests exclusively in central government bonds, thus eliminating credit risk. Its portfolio has a significant allocation to long-term government bonds maturing between 2034 and 2065, making the fund sensitive to interest rate fluctuations. The fund is managed by Devang Shah, who focuses on maintaining a balanced duration in the portfolio.

    Fund Details : 

    DetailsInformation
    Current NAV27.38
    Fund Size599.23
    Expense Ratio0.82%
    Minimum Investment₹5,000
    Minimum SIP₹1,000
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerDevang Shah

    Fund Performance

    MetricValue
    3-year return7.62
    5-year return5.82
    Alpha-0.08%
    Beta0.96
    Sharpe Ratio0.07
    Risk7.17%

    7. UTI Gilt Fund

    The UTI Gilt Fund is managed by UTI Mutual Fund and was established on November 14, 2002. This fund is entirely focused on government bonds and holds a significant portion of G-Secs (Government Securities) maturing between 2031 and 2053 in its portfolio. A portion of the fund is also invested in State Development Loans and net current assets to maintain liquidity. The fund is managed by Pankaj Pathak, who focuses on stable duration and risk control.

    Fund Details : 

    DetailsInformation
    Current NAV65.58
    Fund Size560.78
    Expense Ratio0.93%
    Minimum Investment₹500
    Minimum SIP₹500
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerPankaj Pathak

    Fund Performance

    MetricValue
    3-year return7.06
    5-year return5.44
    Alpha-0.07%
    Beta0.96
    Sharpe Ratio0.05
    Risk6.78%

    8. Quant Gilt Fund

    The Quant Gilt Fund is managed by Quant Mutual Fund, which was established on December 1, 1995. This fund invests exclusively in government bonds and some State Development Loans (SDLs). Its portfolio is spread across government bonds maturing between 2030 and 2064, while also maintaining liquidity and diversification through TREPS and SDLs. The fund is managed by Sanjeev Sharma, who actively manages the duration based on the changing interest rate environment.

    Fund Details : 

    DetailsInformation
    Current NAV12.17
    Fund Size111.73
    Expense Ratio1.41%
    Minimum Investment₹5,000
    Minimum SIP₹1,000
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerSanjeev Sharma

    Fund Performance

    MetricValue
    3-year return6.73
    5-year return–
    Alpha-0.15%
    Beta1.06
    Sharpe Ratio-0.09
    Risk5.76%

    10. PGIM India Gilt Fund

    The PGIM India Gilt Fund is managed by PGIM India Mutual Fund, which was established on September 24, 2008. This fund invests exclusively in government bonds, and its portfolio has a significant allocation to G-Secs maturing between 2034 and 2055.  Liquidity is maintained by holding a portion of the assets in net current assets. The fund is managed by Puneet Pal, whose focus is on duration control and risk management.

    Fund Details : 

    DetailsInformation
    Current NAV32.64
    Fund Size105.01
    Expense Ratio1.38%
    Minimum Investment₹5,000
    Minimum SIP₹1,000
    Exit LoadNil
    Lock-in PeriodNot Applicable
    Fund ManagerGurvinder Singh Wasan

    Fund Details : 

    MetricValue
    3-year return7.28
    5-year return5.79
    Alpha-0.12%
    Beta1.01
    Sharpe Ratio-0.01
    Risk6.23%

    Read Also: Top 10 High-Return Mutual Funds in India

    Risks Associated With Gilt Mutual Funds

    1. Impact of Interest Rate Changes : Gilt funds are directly linked to government bonds, so changes in interest rates affect their Net Asset Value (NAV). When interest rates rise, the value of existing bonds decreases, and the fund’s value may fall.
    2. Short-Term Return Risk : If you invest in gilt funds for a very short period, the returns can be uncertain, especially if the direction of interest rates changes suddenly.
    3. Market Liquidity Conditions : Government bonds are generally easy to buy and sell, but liquidity can decrease somewhat during periods of market stress.
    4. Inflation-Related Risk : If the returns from a gilt fund are lower than the inflation rate, the investor’s real earnings are affected. This is why they are not considered entirely risk-free.

    Conclusion

    Gilt mutual funds can be suitable for investors seeking relatively safe investments through government bonds and who understand the fluctuations in interest rates. Choosing the right gilt fund requires considering the investment horizon, risk tolerance, and the prevailing interest rate environment. In the long run, these funds can help stabilize a portfolio, but investing without understanding the risks is not advisable.

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    Frequently Asked Questions (FAQs)

    1. What is a gilt mutual fund?

      This is a mutual fund that invests exclusively in government-issued bonds.

    2. Are gilt funds completely safe?

      There is no credit risk, but returns can fluctuate due to changes in interest rates.

    3. Can I lose money in gilt funds?

      Yes, in the short term, especially when interest rates rise.

    4. Who should consider investing in gilt funds?

      Investors who want to invest for 3-5 years or longer.

    5. Are gilt funds better than fixed deposits?

      Fixed deposits offer a fixed return, while returns from gilt funds depend on market conditions.

  • How Interest Rates Impact Mutual Funds in India

    How Interest Rates Impact Mutual Funds in India

    A few years ago, fixed deposits felt like the safest answer for most investors. Investors used to lock their funds in a fixed deposit and earn a steady interest. There was limited concern about market fluctuations, as fixed deposits offered predictable returns. But then interest rates started moving and returns changed. Suddenly, many people began looking beyond deposits and towards mutual funds.

    This shift highlights why interest rates and mutual funds are deeply connected. In fact, a change in the interest rate can impact the mutual fund performance, especially over  time. To invest with clarity, it is also important to understandhow interest rates influence mutual funds, rather than treating them as the same thing.

    So, if you are new to investing or have been investing for years now, read this guide. Understand how these two are connected and why you should evaluate the relationship when you plan to invest.  

    Understanding Interest Rates

    Interest rates affect everyday money decisions, even when we do not notice them directly. From loan EMIs to returns on deposits, almost every financial decision is influenced by interest rates. Simply put, interest rates are the cost of borrowing money and the reward for saving it.

    Here is how interest rates work in real life:

    • When the interest rate is low, borrowing rates are low. People can borrow more at a lower cost. This increases the spending capacity of the people. 
    • When the interest rate is high, the earning part of savings becomes more lucrative. This is the time when people spend less and invest more into savings.

    These changes influence markets and investment products, including mutual funds. Understanding this basic cycle helps you see why interest rates matter beyond banks and deposits. 

    RBI Tools That Shape Interest Rates

    Interest rates in India do not move on their own, they are largely influenced by policy decisions and economic conditions.. Behind every interest rate rise or cut, there is a decision taken by the Reserve Bank of India. The RBI’s role is not to chase market returns. It works to ensure that the economy is stable and is helping the banking system work seamlessly.

    The RBI rates that you must know of are as follows:

    1. Repo Rate

    The repo rate is the interest rate at which banks borrow money from the RBI. This is usually for short periods. When the repo rate goes up, banks pay more to borrow. This usually leads to higher loan interest for customers. When the repo rate comes down, loans become cheaper. This is the time when spending quickly picks up.

    2. Reverse Repo Rate

    The reverse repo rate is the opposite. It is the rate banks earn when they park extra money with the RBI. When this rate is high, banks prefer keeping money with the RBI instead of lending. This reduces money flow in the economy and the general interest rate rises. When it is low, banks are in a position where they can lend more and interest rates fall.

    3. Cash Reserve Ratio (CRR)

    This is the amount that the banks keep with the RBI for safekeeping. It is the amount that the bank cannot use for lending to customers. A rise in CRR means that banks have less money to lend, and so rates will rise. At the same time, when CRR falls, the money with banks increases to give out loans to customers. Now banks can lend more at lower rates. 

    With the help of these, the RBI controls the money supply and the credit growth. Also, the overall interest rate direction is determined without directly setting loan rates.

    Read Also: Impact of Interest Rate Change on Financial Markets

    Factors Affecting Interest Rates

    Interest never moves in a straight line. It works in cycles. This is why it is very important to know all the factors that impact the interest rates and how you can actually manage them better. So, the key factors are as follows:

    1. Inflation Pressure

    When everyday costs like food, fuel, and services rise quickly, interest rates are increased. Higher rates make borrowing costly. This reduces the amount that people seek as a loan. This also reduces the purchasing parity as well and so the consumption as well.

    2. Pace of Economic Activity

    If businesses are expanding and people are spending freely, demand for loans increases. This pushes interest rates upward. When economic activity slows, lower rates are used to encourage borrowing and revive demand.

    3. Availability of Money With Banks

    When banks have excess funds, lending becomes easier and interest rates remain low. If funds dry up, banks raise rates to manage risk. Central bank actions often control this flow of money using various monetary tools.

    4. Government Spending and Borrowing

    Large government borrowing increases demand for funds in the market. This can lead to higher interest rates. Lower borrowing eases pressure and supports stable rates.

    5. Global Market Influence

    Interest rate moves in other major economies affect capital movement. If global rates rise, domestic rates may also increase to retain foreign investment. When global rates fall, there is room to cut rates locally.

    All these factors work together and create a positive or negative impact on the interest rates. This thereby creates pressure on the investment plans as well. 

    How Interest Rates Impact Mutual Funds

    Interest rate changes gradually make their way into mutual fund performance over time. The effect is not instant, but it becomes clear over time. The impact also depends on the type of mutual fund you hold. Debt funds react faster, equity funds react gradually, and hybrid funds fall somewhere in between.

    1. Impact on Debt Mutual Funds

    Debt mutual funds are the ones that are impacted by the interest rates directly. This is mainly because these funds invest in bonds and other debt instruments.

    When interest rates rise, new bonds offer higher yields. Existing bonds with lower rates lose value, which can pull down debt fund NAVs. When interest rates fall, older bonds with higher coupons become more attractive and the bond value rises. So debt fund NAVs usually rise.

    Long-duration debt funds are more sensitive to rate changes. Short-term and liquid funds are less affected.

    2. Impact on Equity Mutual Funds

    Equity mutual funds are affected indirectly as it has an impact on the company’s financials, profits and its investment decision. This impacts the market liquidity as well.

    Lower interest rates reduce borrowing costs for companies. This supports expansion and improves earnings. This is positive for equity funds. Higher interest rates increase borrowing costs and slow economic growth. This can pressure stock valuations and its profitability.

    The impact is not uniform. Rate-sensitive sectors feel it more, while defensive sectors remain relatively stable.

    3. Impact on Hybrid Mutual Funds

    Hybrid mutual funds hold both equity and debt. Their reaction to interest rate changes is more balanced.

    The debt portion reacts directly to rate movements. The equity portion reacts based on growth expectations. Because these funds combine equity and debt, the overall impact is more balanced. This is why the same shows a relatively smoother and gradual performance across the interest rate cycles.

    This makes them suitable for investors who want stability during changing rate environments.

    In conclusion, interest rates influence mutual fund performance in different ways across fund categories. But in reality, they affect return direction and volatility, which are key factors in mutual fund performance analysis. So, there is an indirect relationship between interest rates and mutual funds.

    Read Also: How Interest Rate Changes Affect the Stock Market

    Interest rates influence mutual funds in different ways, depending on what the fund invests in. A simple comparison helps make this link clearer. Instead of tracking every rate change, it is better to understand the pattern and how each fund type usually reacts.

    The table below explains this connection in a practical way.

    Interest Rate MovementDebt Mutual FundsEquity Mutual FundsHybrid Mutual Funds
    Rates increaseBond prices fall. Debt fund NAVs may decline, especially in long-duration funds.Borrowing costs rise. Profit expectations may reduce, affecting market sentiment.The debt portion may face pressure. The equity portion may turn cautious.
    Rates decreaseBond prices rise. Debt fund NAVs generally improve.Lower borrowing costs support growth and valuations over time.Debt gains support. Equity benefits gradually from growth optimism.
    Stable ratesReturns come mainly from interest income. Volatility stays low.Markets focus on earnings and fundamentals.Balanced performance with limited volatility.
    Sharp rate changesHigh impact on long-duration funds. Short-term funds stay safer.Short-term volatility increases before markets adjust.Asset allocation helps smooth the impact.

    Tips to Protect Your Mutual Fund Investments During Interest Rate Changes

    Interest rate cycles are unavoidable. But understanding how to invest during these cycles can help you manage risk more effectively. So, you need to work on logic and not emotions and it requires a disciplined approach. Some of the tips for you to follow are as follows:

    1. Match Fund Type With Rate Direction

    When interest rates are rising, prefer short-duration or low-duration debt funds. They face less price pressure. When rates are expected to fall, longer-duration debt funds may benefit more.

    2. Avoid Frequent Switching

    Constantly moving between funds based on rate news often hurts returns. Interest rate impact plays out over time. Staying disciplined works better than trying to time every move.

    3. Keep Equity Investments Goal Focused

    Equity mutual funds should be aligned with long-term goals. Short-term changes can lead to volatility, but you should not panic. It is generally better to stay invested over the long-term  to absorb short-term rate-driven volatility.

    4. Use Asset Allocation to Reduce Risk

    You must spread your investment across different assets. This will work best when there are market fluctuations and reduce overall portfolio risk. When one asset reacts negatively to rates, another may offer stability.

    5. Review, Do Not Panic

    Rate changes are normal. Review your portfolio periodically based on goal and time horizon. These small corrections lead to better results and can improve outcomes over time without unnecessary disruption.

    These steps help you stay invested with confidence, even when interest rates move against expectations.

    Read Also: Best Safe Investments with High Returns in India

    Conclusion

    Interest rates are never the same. They change with time and can create varied impacts on investments. This is why it becomes really important for investors to keep an eye on the investment options as well as the interest rate.

    Mutual funds react to these changes in different ways. And once you know and understand this, you will be working for investments based on logic. This will remove all the noise from between.

    If you want to track interest rate trends and choose mutual funds that match your goals, platforms like Pocketful can help you invest with clarity and confidence.

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    Frequently Asked Questions (FAQs)

    1. o mutual fund returns change immediately when interest rates change?

      Debt mutual funds may react quickly, especially long-duration funds. Equity mutual funds usually respond gradually as company earnings and market sentiment adjust.

    2. Are debt mutual funds safe when interest rates are rising?

      Short-duration and liquid debt funds are relatively safer during rising interest rate phases. Long-duration funds carry higher interest rate risk.

    3. Should I stop SIPs in equity funds when interest rates rise?

      No. Rising interest rates can cause short-term volatility, but long-term equity investing works best when SIPs are continued without interruption.

    4. Which mutual funds benefit most when interest rates fall?

      Long-duration debt funds and dynamic bond funds usually benefit more when interest rates decline, as bond prices tend to rise.

    5. Can interest rates alone decide mutual fund performance?

      No. Interest rates influence returns. But if you consider the overall performance, there are other factors as well that can create a varied impact. Analysing all will help you invest better.

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