Best Mutual Funds to Invest in 2012

In the previous post 'Has the Bull Returned to the Indian Markets', I had outlined the reasons for the sudden bull-run in the Indian stock market and the outlook for the next few months. Investing in the Equity Markets through Mutual Funds is the best Way for Investors, who either do not have the time or the expertise to identify & buy/sell stocks at the right time. As mentioned in that article, below are the top performing Mutual Funds, in each of the various categories.

Large Cap Funds

These are Mutual Funds that invest predominantly in Large-Cap (Blue-Chip) Stocks. The Fund Managers decide on which blue-chip stock to invest and when to buy/sell them. The Best 3 Large Cap Funds as of now are:

1. Franklin India Bluechip Fund
2. HDFC Top 200 fund
3. ICICI Prudential Focused Bluechip Equity Fund

Diversified Equity Funds

These are Mutual Funds that invest in a variety of stock sizes. The Fund Manager decides on the exposure to large-cap, mid-cap and small-cap stocks. Based on the market movement, investment decisions to go heavyweight or underweight on a category of stocks too will be taken. The Best 3 Diversified Equity Funds as of now are:

1. Fidelity Equity Fund
2. Franklin India Prima Plus
3. HDFC Equity Fund

Midcap Funds

These are Mutual Funds that invest predominantly in the small to medium sized company's. They identify potential blue-chip company's and invest in them. The best 3 Mid-cap & Small-cap funds as of now are:

1. DSP BlackRock Small & Midcap Fund
3. HDFC Mid-Cap Opportunities Fund
3. IDFC Premier Equity Fund

Balanced Funds

These are Mutual Funds that have a healthy exposure to Fixed Income Instruments, apart from the equity exposure. They invest around 60% in Equities and the rest is invested in Debt instruments. This gives them a chance to preserve a portion of the capital, while trying to achieve growth through equity exposure. The best 3 Balanced Funds as of now are:

1. HDFC Prudence Fund
2. ICICI Prudential Balanced Fund
3. DSP BlackRock Balanced Fund

Happy Investing!!!

Disclaimer: Mutual Funds are Stock Market based instruments. As with any stock market related instruments, losses are a very real possibility. Past Performance may or may not be sustained in future. The reader is requested to perform his/her own research before taking the Investment decision. The Author does not hold units of the Mutual Funds outlined above.