In addition to offering diversification and better downside protection, mutual funds are a great way to invest in the Indian stock market.

The question is, with so many mutual funds available, which fund should you invest your hard-earned money in?

Here are the top mutual funds to invest in India in 2023 to help you decide.

Our list of the best mutual funds to invest in India has been divided into three sections based on the financial goals and risk appetites of investors.

Equity mutual funds invest exclusively in company stocks. These funds are designed to maximize wealth creation. However, equity funds are considered to be very risky and are better suited to individuals with a high tolerance for risk. Some of the funds you can consider investing in are listed below.

1. Tata Digital India Fund:

Tata Digital India is a sectoral fund that invests primarily in technology companies. The fund has generated returns of up to 300.26% in the past three years alone by investing 80.1% of its total fund value in large-cap companies. As of February 08, 2023, the mutual fund’s NAV is Rs. 37.47, with Infosys, TCS, HCL, and Bharti Airtel among its top four companies.

2. Quant Small Cap Fund:

The name itself indicates that this fund primarily invests in small-cap companies. Although the fund includes some mid-cap and large-cap entities as well, it has generated returns of 48.10% over the past three years, making it one of the best mutual funds to invest in India. As of February 8, 2023, the fund’s NAV is Rs. 150.69.

3. Quant Infrastructure Fund:

Quant Infrastructure, another sectoral mutual fund, invests primarily in infrastructure companies. During the past three years, the mutual fund generated 37.70% returns by investing 60.83% of its assets in large-cap companies, 20.45% in mid-cap companies, and 18.26% in small-cap companies. According to the fund’s NAV on February 8, 2023, it is worth Rs. 23.35.

Investing exclusively in debt instruments, such as debentures, bonds, and money market instruments, is the goal of debt mutual funds. Unlike equity funds, these funds are designed to offer stable returns to investors and are well suited for individuals with a low tolerance for risk.

1. Aditya Birla Sun Life Medium Term Direct Plan:

As of February 08, 2023, the NAV of Aditya Birla Sun Life Medium Term mutual fund is around Rs. 33.85. Over the past three years, the fund has generated a return of 13.49%, which is the highest in India. It has invested over 44% in debentures, 30% in government securities, and 6.23% in non-convertible debentures.

2. ICICI Prudential All Seasons Bond Fund Direct Plan-Growth

One of the best mutual funds in India to invest in is the ICICI Prudential All Seasons Bond Fund, which is primarily invested in government securities and non-convertible debentures. With a Net Asset Value of around Rs. 32.42 as of February 8, 2023, it has managed to produce a return of 7.12% over the past three years.

The percentage of investment in equity shares and debt instruments in hybrid mutual funds may vary slightly, depending on the mutual fund in which you invest. Investors with moderate risk tolerance levels may consider investing in hybrid mutual funds, which are designed to offer high wealth creation opportunities and stable returns.

1. Quant Multi Asset Fund:

Quant’s hybrid mutual fund holds both equity and debt instruments in ratios of 63.4% and 8.4%, respectively. One of the best-performing hybrid funds in India has posted 30.15% returns over the past three years. As of February 8, 2023, the NAV of the fund is Rs. 89.32.

2. Kotak Multi Asset Allocator FoF:

Approximately 53.76% of Kotak Multi Asset Allocator’s investments are in the equity market, while about 23.23% are in the debt market. As of February 08, 2023, its net asset value is around Rs. 160.05. The fund has managed to produce a return of about 20.08% over the past three years.