Best Performing Mutual Funds of 2021
The year 2021 has been an exciting year for mutual funds, with many funds delivering strong returns despite the ongoing pandemic. In this blog, we will look at some of the best performing mutual funds of 2021, based on their returns and consistency.
What are mutual funds?
Before we dive into the best performing mutual funds, let’s first understand what mutual funds are. A mutual fund is a type of investment vehicle that pools money from multiple investors and invests the money in a diversified portfolio of stocks, bonds, or other securities.
By investing in mutual funds, investors can benefit from diversification and professional management, without having to manage their investments themselves.
Best Performing Mutual Funds of 2021
- SBI Small Cap Fund
The SBI Small Cap Fund is a mutual fund that invests in small-cap stocks in India. As of March 2023, the fund has delivered a return of around 96% over the past year, making it one of the best performing mutual funds of 2021. The fund has a strong track record of delivering consistent returns over the long term, making it an attractive investment option for investors looking to invest in small-cap stocks.
- Axis Midcap Fund
The Axis Midcap Fund is another mutual fund that has performed well in 2021, delivering a return of around 85% over the past year. The fund invests in mid-cap stocks in India and has a diversified portfolio of high-quality companies. The fund has a strong track record of delivering consistent returns, making it a good investment option for investors looking for exposure to mid-cap stocks.
- Mirae Asset Emerging Bluechip Fund
The Mirae Asset Emerging Bluechip Fund is a mutual fund that invests in high-quality mid-cap and small-cap stocks in India. The fund has delivered a return of around 80% over the past year, making it one of the best performing mutual funds of 2021. The fund has a strong track record of delivering consistent returns over the long term, making it an attractive investment option for investors looking for exposure to high-quality mid-cap and small-cap stocks.
- ICICI Prudential Technology Fund
The ICICI Prudential Technology Fund is a mutual fund that invests in technology-related stocks in India. The fund has delivered a return of around 70% over the past year, making it one of the best performing mutual funds of 2021. The fund has a strong track record of delivering consistent returns over the long term, making it an attractive investment option for investors looking for exposure to technology-related stocks.
- HDFC Small Cap Fund
The HDFC Small Cap Fund is a mutual fund that invests in small-cap stocks in India. The fund has delivered a return of around 70% over the past year, making it one of the best performing mutual funds of 2021. The fund has a strong track record of delivering consistent returns over the long term, making it an attractive investment option for investors looking for exposure to small-cap stocks.
When investing in mutual funds, it is important to keep in mind that every fund has its own investment objective and strategy, which may not necessarily align with your investment goals and risk appetite. Therefore, it is important to thoroughly understand the investment objective of the mutual fund and assess if it is a good fit for your portfolio.
Additionally, while high returns are certainly attractive, it is also important to consider the risks associated with investing in a particular mutual fund. Higher returns usually come with higher risks, and it is important to assess whether the risks associated with a particular fund are in line with your risk tolerance.
Furthermore, mutual funds come with management fees and expenses that can eat into your returns. Therefore, it is important to understand the expense ratio of a mutual fund before investing, as higher expenses can significantly impact your returns over the long term.
Conclusion
In summary, while the above-mentioned mutual funds have performed well in 2021 and have a strong track record of delivering consistent returns over the long term, it is important to do your research, assess the risks associated with each fund, and consult a financial advisor before making any investment decisions. With proper due diligence and a long-term investment horizon, mutual funds can be an excellent way to achieve your financial goals.
Read more useful content:
- How to invest in mutual funds
- Best Technology Mutual Funds
- All about mutual funds-types & importance
- The Power of SIP Investment in Mutual Funds
Frequently Asked Questions (FAQs)
What is a mutual fund?
A mutual fund is a type of investment vehicle that pools money from multiple investors and invests the money in a diversified portfolio of stocks, bonds, or other securities. By investing in mutual funds, investors can benefit from diversification and professional management without having to manage their investments themselves.
How do mutual funds work?
Mutual funds work by pooling money from multiple investors and investing the money in a diversified portfolio of stocks, bonds, or other securities. The fund is managed by a professional fund manager who buys and sells securities on behalf of the investors in the fund.
What is the difference between a mutual fund and an ETF?
The main difference between a mutual fund and an ETF (Exchange Traded Fund) is that mutual funds are priced once a day at the end of the trading day, while ETFs trade like stocks and can be bought and sold throughout the trading day. Additionally, mutual funds are actively managed, while ETFs are typically passively managed.
What are the benefits of investing in mutual funds?
The benefits of investing in mutual funds include diversification, professional management, access to a wide range of investments, and the ability to invest in a variety of asset classes.
What are the risks associated with investing in mutual funds?
The risks associated with investing in mutual funds include market risk, interest rate risk, credit risk, and liquidity risk. Additionally, mutual funds come with management fees and expenses that can eat into your returns.
What is an expense ratio?
An expense ratio is the annual fee that mutual funds charge their investors for managing the fund. The expense ratio includes the fund’s management fee, administrative expenses, and other costs associated with managing the fund.
What is a load fee?
A load fee is a sales charge that is paid when buying or selling shares of a mutual fund. Load fees can be either front-end loads, which are paid when buying shares, or back-end loads, which are paid when selling shares.
What is a no-load mutual fund?
A no-load mutual fund is a mutual fund that does not charge a sales charge when buying or selling shares. Instead, the fund charges a lower expense ratio to cover the costs associated with managing the fund.
What is a target-date fund?
A target-date fund is a type of mutual fund that is designed to provide a diversified portfolio of investments that gradually becomes more conservative as the target date approaches. The target date is typically the year in which an investor plans to retire.
How do I choose a mutual fund?
When choosing a mutual fund, it is important to consider your investment goals, risk tolerance, and investment horizon. Additionally, it is important to research the fund’s investment objective, performance, fees, and expenses, and consult a financial advisor if necessary.
