‘Rumors are meant to be spread,’ those who actually mislead others with the wrong information, believe this line. That is why they keep on spreading the incorrect information about different things. In case of mutual fund investments too, there is a big confusion among the investors that they should invest in the top ranking funds or not. And, it is because of having incorrect knowledge.
Some investors say that one should not trust the rankings of mutual funds, while some say that investment in top ranking mutual funds can be a good bet. But when we approach them with a question ‘Why?’ they have nothing to explain. It is because people easily believe what they hear from others rather than digging into the facts. Let’s know what our experts say about investing in the top ranking mutual funds:
Neither you should completely believe in the mutual fund rankings, nor you should ignore them. Yes, you can consider investing in them if the investment profile is matching to that of yours. For the best results, it is suggested to consult a financial expert before choosing any scheme. However, it is not that all the top ranking schemes are good for you. There are many blockbuster movies which you don’t like because they do not belong to the category that you enjoy watching. Similarly, all the mutual funds have different style, objective, portfolio, performance, etc. You need to select the one on the basis of your investment profile and objectives. Now, out of those selected ones, you can consider the ratings to know which one has performed superior. Remember one thing that not to compare the schemes of different categories on the basis of star ratings.
What Is Mutual Fund Star Rating?
Mutual fund star rating is an indicator of the overall performance of the scheme. More precisely, it shows that how the scheme has performed over a certain period of time. There are some rating agencies which provide star ratings to the mutual fund schemes considering the various parameters such as performance, asset class, category, etc. CRISIL is one of the rating agencies that rates the mutual fund schemes and provides them star ratings. For instance five stars means 1st rank to the scheme that has performed excellently, for the performance level little down, it gives a four-star rating. And so on till the one star and no ratings if the scheme is unable to match the criteria of the agency.
Here’s the List of Some of the Top Ranking Mutual Funds to Invest in India:
- L&T Emerging Business (G)
- Aditya Birla Sun Life Small&Midcap Fund (G)
- Reliance Small Cap Fund (G)
- Aditya Birla Sun Life Top 100 Fund (G)
- L&T Midcap Fund (G)
- Motilal Oswal MOSt Focused Multicap 35 Fund - Regular Plan (G)
- Sundaram Rural India Fund (G)
- Tata Equity PE Fund (G)
- ICICI Prudential Long Term Fund - Regular Plan (G)
- HDFC Small and Mid Cap Fund (G)
The schemes which mentioned above are the 1st rank holders by the CRISIL for the quarter ended September 2017. In the list, the schemes of different classes and categories are mentioned.
The mutual fund rating agencies rate the different schemes on the various parameters. Still, it is never suggested to depend on them completely. It is better to consult a financial planner. You can check out the top ranking mutual funds on our portal, i.e., MySIPonline, and consider them for investment after consulting with your advisor.
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