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Our list of top mutual fund schemes that you may consider to invest in 2019.

Which are the bestmutual fundstoinvest? Most investors have this query before they start investing in mutual funds. Curiously, it is the first question most investors ask or type on a search engine. Sadly, it is also the main reason why many investors keep on postponing their investments forever.

Even when the online search show some results, most investors dont proceed further. They are still unsure about the dependability of the list. That is why we atthought about putting together a list of mutual fund schemes to help investors who are struggling with this question.

Here iss list of best or top mutual fund schemes that you may consider investing in 2019. We have included almost every important category of schemes in our recommendation list: equity schemes, hybrid schemes, and debt schemes. You can scroll down to take a look at the complete list.

However, before proceeding further, here are a few pointers you must keep in mind. One, you should always choose your mutual funds based on your financial goals,investmenthorizon, and risk profile.

If your goals need to be met within less than five years, you may consider investing in debt mutual fund schemes. If you are investing for long-term goals of over five years, you may consider hybrid or equity schemes.

Note, it is extremely important to choose a debt mutual fund scheme that matches your investment horizon. Even while choosing equity mutual fund schemes, you should not overlook this aspect. For example, you should have a minimum investment horizon of five to seven years to invest in an equity scheme. However, if you are investing in mid cap or small cap schemes, you should have a longer investment horizon (seven to 10 years).

However, you should keep in mind that all debt or hybrid orequity mutual fundsdo not have the same element of risk. Some schemes are riskier than the others. For example, overnight funds and liquid mutual fund schemes are the least risky amongdebt mutual funds, whereas credit risk schemes can be highly risky. Similarly, a small cap scheme is riskier than a largecap or multicap scheme.

That is why it is extremely important for investors to keep their risk appetite in mind while choosing a mutual fund scheme. Any mismatch could cause a lot of heartburn later. If you do not have the appetite for the risk associated with your investments, you may find it extremely difficult to hold on to your investments during trying times.

Here is the list of best mutual fund schemes across categories:

Methodology for equity funds:

< Mutual Funds has employed the following parameters for shortlisting the equity mutual fund schemes.

1. Mean rollingreturns: Rolled daily for the last three years.

2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.

i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.

ii) When H is less than 0.5, the series is said to be mean reverting.

iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series

3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.

Z = Y/number of days taken for computing the ratio

4. Outperformance: It is measured by Jensens Alpha for the last three years. Jensens Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.

[Risk Free Rate + Beta of the MF Scheme * (Average return of the index – Risk Free Rate

5. Asset size: For Equity funds, the threshold asset size is Rs 50 crore

Methodology for debt funds:

1. Mean rolling returns: Rolled daily for the last three years.

2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.

i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.

ii) When H is less than 0.5, the series is said to be mean reverting.

iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series

3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.

Z = Y/number of days taken for computing the ratio

4. Outperformance: Fund Return Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund.

Asset size: For Debt funds, the threshold asset size is Rs 50 crore

ET.com Mutual Funds has employed the following parameters for shortlisting the hybrid mutual fund schemes.

1. Mean rolling returns: Rolled daily for the last three years.

2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.

i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast.

ii) When H 0.5, the series is said to be mean reverting.

iii) When H0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series

3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.

Z = Y/number of days taken for computing the ratio

i) Equity portion: It is measured by Jensens Alpha for the last three years. Jensens Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.

[Risk Free Rate + Beta of the MF Scheme * (Average return of the index – Risk Free Rate

ii) Debt portion: Fund Return Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund.

5. Asset size: For Hybrid funds, the threshold asset size is Rs 50 crore

(%)Mirae Asset Tax Saver Direct-G6.766.5513.1112.3321.35Invest NowMirae Asset Tax Saver Reg-G6.586.0312.0910.6319.70Invest NowMotilal Oswal Long Term Equity Fund Direct-Growth

ELSS5.543.838.68-2.1416.91Invest NowFeatured

ELSS5.766.4314.189.0714.99Start SIP/topmutualfunds_fscheme.cms?primaryobj=feature&utm_campaign=MFSec_ArticleShow_Widget&utm_content=MFSec_Widget_Article&secname=mf/analysis

– Returns less then 1 year are absolute and above 1 year are annualised.

– Returns of 1 year are absolute and above 1 year are annualised..

All you need to know about filing ITR this year

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