10 Best SIP Mutual Funds in India to Invest in 2020

The time has come to review your mutual fund portfolio to weed out the under former and add new funds to boost and balance your portfolio.

Top Rated Mutual Funds to Invest in 2016

Mutual funds are as risky as investing in the stock market and tends to provide good returns in the long term only but you can minimize the risk by following the SIP (Systematic Investment Plan) method.

Read: Best Investment Plans in India

I will throw light on all the aspects of SIP and will also tell you how SIP is better than lump sum investment. After that you will get to know the best SIP investment schemes in 2020 in India.

Let’s start…

What is SIP?

Systematic Investment Plan (SIP) is a method for investing a fixed sum in mutual funds at regular intervals, say weekly, monthly, or even quarterly. You can create a financial discipline in your life along with a passage for wealth building.

SIP is a hassle-free investment. Because the SIP amount is auto-debited from your bank account and invested in your mutual fund scheme. On every SIP some additional units of the mutual funds are purchased at the current Net Asset Value (NAV) and added into your account. The major benefits of SIP are Rupee Cost Averaging and the power of compounding.

How is SIP Better than Lump Sum?

You can invest in mutual funds in two ways – either SIP or lump sum. Both SIP and lump sum investments have their own pros and cons.

In the SIP, you invest fixed sum at regular intervals regardless of the market conditions and you are able to buy more units when the market is low automatically. This results in a lower average price leading to higher returns. With the lump sum investment, that doesn’t happen because you have already blocked your amount at a fixed price in the past.

With this advantage to invest at an average price over time makes SIP a better option. SIP is a safe option in volatile markets as you invest with no worries of the markets, in case of lump sum investment, the market movements are highly important.

Read: Best ELSS Tax Savings Mutual Funds in India

How to Choose Best Mutual Fund Scheme

You should consider the parameters below while choosing any mutual fund scheme.

  • Standard Deviation measures the deviation of the mutual fund return from the average. Lower the deviation; lower the volatility, which is good.
  • Sharpe Ratio calculates the average of the return of the fund over and above the risk free return and standard deviation of the excess return. Higher the Sharpe ratio, better the performance of the fund.
  • Sortino Ratio works similar to sharpe ratio but sortino ratio takes into account only the negative returns of the fund over and above the risk free return. Higher the Sortino Ratio, better the performance of the fund.
  • Beta is the measurement of volatility of the fund from its benchmark index. A beta of 1 implies that fund movement is symmetry with the index movement. Lower the Beta, lower the risk which is good for fund.
  • Alpha measures the ability of the fund manager in generating positive return wrt to risk free returns and index return. Higher the alpha, better the risk taking ability of the fund manager.
  • R-Squared measures the correlation of NAV with its benchmark index. Similar to Beta, 1 implies a perfect correlation.
  • Expense Ratio is the expense burden which is borne by the investor. Lower the expense ratio, higher the returns of the fund.
  • Fund having Fund Manager associated with longer tenure is given preferences.
  • Only top 15 recognized Fund Houses are considered while best selecting mutual fund scheme.
  • Higher Net Assets (AUM) under the fund shows the confidence of the investors.

Read: How to invest in mutual funds

Best SIP Mutual Funds to Invest in India 2020

I have curated the lists under 2 categories – equity and debt.

Best Equity SIP Mutual Funds

Fund Name1-year Return3-Year Returns
Axis Bluechip Fund18.78%17.97%
SBI Magnum Multicap Fund11.58%11.29%
Mirae Asset Large Cap Fund15.13%13.21%
ICICI Prudential Bluechip Fund10.53%10.97%
SBI Bluechip Fund10.90%9.84%

Best Debt SIP Mutual Funds

Fund Name1-year Return3-Year Returns
Aditya Birla Sun Life Savings Fund5.58%4.37%
HDFC Short Term Debt Fund10.26%7.75%
Nippon India Low Duration Fund7%7%
Aditya Birla Sun Life Credit Risk Fund3.09%5.46%
L&T Low Duration Fund5.40%6.49%

Conclusion

You should invest in the mutual funds under both categories to balance your portfolio. Further, you should start investing in mutual funds with a mindset of minimum tenure of 3 years to reap good returns. You can also do switching from one mutual fund scheme to another with the help of STP (Systematic Transfer Plan). Similar to SIP but it allows you to switch mutual funds schemes in between.

If you have any query related to mutual funds or SIP, do tell me in the comments.

17 thoughts on “10 Best SIP Mutual Funds in India to Invest in 2020”

  1. Dear Brothers and Sisters,
    I am Chandramouli from Hyderabad. I have a Hearing problem (DEAF Born and Handicap are also problem). PLEASE What is the best SIP, FD, RD, KVP and other. What is best Companies? PLEASE HELP ME. I am NOT Great English. SAVE ME.
    Warm,
    Chandramouli.

  2. Sir
    I want to invest in 5 mutual funds Rs 2000 each in SIP for 10-12 yrs. Pls suggest some good funds for my portfolio for good returns.

  3. Thank you for wrote wonderful article
    i m subbiah Age40yrs, my goal is 8yrs girl child Marriage/Education….

    My SIP investments are
    1) Sundaram S.M.I.L.E Reg growth – Rs2500
    2) Franklin india smaller cos direct growth – Rs3000
    3) Franklin india High growth cos direct growth- Rs2500
    4) ICICI Pru Value discovery Direct Growth – Rs3000
    5) TATA Balanced Fund Direct Growth – Rs2500

    Pl. suggest…Can I continue the above funds and i wish to invest 1 Lakh Lumpsum……..Can i Invest in existing funds or advice me one new fund

    Thanks in Advance

  4. Hi Gabbar,

    I want to invest 5k sip per month for 3 years…please suggest me some good funds which can give good returns for 3 years period. I can take some risk also. My goal is to take a car after 3 years

    Regards ,
    Nataraj

  5. Dr. Gabbar Singh

    YEAR 2016 Ideal Savings MONTHLY Plan over 5 year vision : Rs. 25,000 nonthly
    Savings Instruments Amount Rs. %
    Recurring Deposit 8,500 34%
    SIP in Mutual Funds
    1. DPS BLACKROCK MICRO CAP FUND 4000 16%
    2. FRANKLIN INDIA SMALLAR COMPANIES FUND 3000 12%
    3. SBI MAGNUM MID CAP FUND 3000 12%
    4. MIRAE ASSET EMERGING BLUECHIP EQUITY FUND 4000 16%
    5. SBI BLUE CHIP FUND 2500 10%
    25,000 100%

  6. Dr. Gabbar Singh

    Mutual Funds to go for ( in decending order ) :

    1. DPS BLACKROCK MICROCAP FUND.
    2. MAIRE ASSET EMERGING BLUECHIP EQUITY FUND.
    3. FRANKLIN INDIA SMALLER COMPANIES FUND
    4. SBI BLUECHIP FUND.
    5. SBI MAGNUM MIDCAP FUND.

    SIP is a safe and confortable approach. However, those with cash must bey outright !!!! GOOD LUCK.

  7. The major parameters that are used for evaluating the best SIP mutual funds include sharpe ratio, standard deviation, r-squared, alpha, beta and sortino ratio. The highly rated SIP mutual funds in India include Franklin India Bluechip Fund, Birla Sunlife Frontline Equity Fund, SBI Magnum Global Fund, ICICI Prudential Value Discovery Fund etc.

  8. That is an amazing article sir. Had a small query. I just wanted to know the difference between the direct plans and the plans through brokers. How much difference would it make if i go for direct plans. the pros and cons of both the options

  9. Sanyam Jain?s guidance on investment in mutual funds clearly indicates the risks but also states the long term advantages by resorting to a Systematic Investment Plan. I can now safely invest in mutual funds to achieve my long term objectives.

  10. Hi
    I have selected below 5 funds to be invested for long time [say 15-20 years].
    All are Direct Growth with 1k each.
    1. SBI Bluechip
    2. ICICI Pru Value Discovery
    3. Mirae Asset Emerging Bluechip
    4. Franklin Ind Smaller Companies
    5. DSP BR Microcap
    Please express your views……

    1. Dr. Gabbar Singh

      Definately a very good selection. the last three are the best. I would cherrypick No. 3 & 5 as GREAT.

  11. Thanks for the Article. It is really helpful.

    I just want to know Risk associated with Private SIP like Birla Sun life and other SIP plans from banks for the term of 10 years.

    Which one is safe?

    1. Dr. Gabbar Singh

      SIP is the way to go ( unless you have huge cash ). Go for open ended funds. Rahul has selected GREAT Funds above. See my response too. GOOD LUCK.

  12. Good article Sanyam. I rate under-performer in some of the funds like SBI Magnum Balanced funds indicated by you. We always look for consistent performers rather than funds which are performing well in a year and vanish / give us normal FD returns in subsequent years. Another point is you have taken returns from last 10 years too which indicates consistent performance. Your analysis is good.

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