For many years, investing in mutual funds has been the go-to strategy for anyone wishing to boost their wealth while benefiting from professional fund management. In 2023, the Indian mutual fund sector will keep expanding and giving investors various options.
When we look at the top 5 mutual funds in India by assets under management (AUM), it is evident that these financial products have cemented their status as a popular choice for investors looking to capitalise on the potential of the Indian stock and bond markets.
These funds have proven adept at negotiating the financial environment’s complexity, making them standout options for investors looking for reliable returns and diverse portfolios.
Mutual funds are a financial investment option that professional fund managers manage. These fund managers invest the investors’ money in stocks, shares, and bonds. It is among the most straightforward and dependable methods for boosting wealth. Investments in mutual fund schemes can generate substantial returns.
Top 5 Mutual Funds in India 2023
There are various ways of finding the top mutual funds to invest in; however, we are disclosing the best ones per AUM. AUM, or asset under management, is the total market value of the investments managed by an entity or a person on behalf of the investors.
A high AUM is often considered a good sign indicating that there will be a better distribution of fixed fund expenses between its investors. It will further mean a lower expense ratio and, thus, higher returns.
| Fund | AUM (in cr) | Expense Ratio | 3-year return | 5-year return |
| SBI Liquid Fund Direct Plan-Growth | 54,434 | 0.18% | 4.79% | 5.24% |
| Aditya Birla Sun Life Liquid Direct Plan-Growth | 32,542 | 0.21% | 4.85% | 5.35% |
| HDFC Corporate Bond Fund – Direct Plan – Growth Option | 26,855 | 0.35% | 5.2% | 7.72% |
| Aditya Birla Sun Life Corporate Bond Fund Direct Plan-Growth | 17,915 | 0.31% | 5.31% | 7.67% |
| Kotak Bond Short-Term Plan Direct-Growth | 13, 184 | 0.36% | 5.05% | 7.44% |
The above comparison shows that the Liquid Fund by SBI mutual fund with the highest AUM has the lowest expense ratio. Hence, the fund’s expenses will be divided better among all the investors. It will further show a positive impact on their overall returns.
Top Things to Consider Before Choosing a Fund
It might be exhilarating if this is your first time investing in mutual funds. Having so many options available could be intimidating. Therefore, before selecting a specific fund, it is necessary to consider two crucial factors.
It is the amount that is charged by the asset management to manage your fund. For instance, the lowest expense ratio in the top 5 funds above is the SBI liquid mutual fund, making it the most affordable. The expense ratio includes the amount that goes towards the fund manager’s salary, advertising, and other general expenses. Hence, choose wisely.
These are additional amounts that investors might have to pay. Entry load is the amount to be paid while investing in the fund. In contrast, exit load is the amount you will pay if you sell your mutual fund. There are many funds where the fee could be more minimal. So, explore your options carefully.
The top 5 mutual funds in India by AUM are beacons of stability, performance, and dependability for investors in a volatile and constantly shifting financial landscape. They illustrate the importance of diversification, skilled fund management, and wealth-building potential.
Investors should exercise caution, consider their risk tolerance, and match their investment strategy to their financial objectives because previous performance does not guarantee future results.