Market corrections can be unsettling for investors. A sudden dip in stock prices often raises concerns about portfolio stability. However, for savvy investors, corrections present an opportunity to invest in top-performing equity mutual funds at attractive valuations.
If you’re wondering which mutual funds are worth considering in the current market downturn, we’ve got you covered. In this article, we will highlight five high-performing equity mutual funds that have demonstrated resilience and strong returns despite market volatility.
Let’s explore these funds and understand why they are potential winners amid a correction.
What Are Equity Mutual Funds and Why Invest in Them?
Equity mutual funds invest predominantly in stocks and aim for long-term capital appreciation. They are ideal for investors seeking higher returns compared to fixed-income instruments. Here’s why equity mutual funds are a solid investment choice, even during market corrections:
- Diversification: Reduces the risk associated with individual stocks.
- Professional Management: Fund managers make informed investment decisions.
- Compounding Benefits: Long-term investments benefit from power of compounding.
- Market Recovery Potential: High-quality funds bounce back stronger after corrections.
Now, let’s look at the five top-performing equity mutual funds that you should consider during the current market dip.
1. SBI Bluechip Fund
Why It Stands Out:
- Large-cap equity fund with a strong track record.
- Invests in stable blue-chip companies with strong fundamentals.
- Managed by experienced professionals ensuring steady performance.
Key Statistics:
- Category: Large-Cap Fund
- AUM: ₹45,000+ Cr
- 5-Year CAGR: ~13%
- Expense Ratio: 1.13%
Who Should Invest?
If you’re looking for low-risk, high-growth potential in stable large-cap stocks, this fund is an excellent option.
2. HDFC Mid-Cap Opportunities Fund
Why It Stands Out:
- One of the most consistent performers in the mid-cap segment.
- Provides exposure to growing mid-sized companies with high potential.
- Historically recovers quickly from market downturns.
Key Statistics:
- Category: Mid-Cap Fund
- AUM: ₹50,000+ Cr
- 5-Year CAGR: ~17%
- Expense Ratio: 1.12%
Who Should Invest?
Investors with a higher risk appetite looking for growth-oriented investments should consider this fund.
3. ICICI Prudential Value Discovery Fund
Why It Stands Out:
- Focuses on undervalued stocks with strong fundamentals.
- Value investing strategy that thrives during market corrections.
- Outperforms benchmarks over the long term.
Key Statistics:
- Category: Value-Oriented Fund
- AUM: ₹30,000+ Cr
- 5-Year CAGR: ~15%
- Expense Ratio: 1.23%
Who Should Invest?
This fund is best for long-term investors who believe in value investing principles and want to capitalize on market dips.
4. Mirae Asset Emerging Bluechip Fund
Why It Stands Out:
- Hybrid strategy investing in both large-cap and mid-cap stocks.
- Consistent outperformance against peers and benchmarks.
- Ideal for investors looking for a balance between stability and growth.
Key Statistics:
- Category: Large & Mid-Cap Fund
- AUM: ₹28,000+ Cr
- 5-Year CAGR: ~19%
- Expense Ratio: 0.87%
Who Should Invest?
If you seek higher returns with moderate risk, this fund’s blended approach makes it a strong contender.
5. Axis Growth Opportunities Fund
Why It Stands Out:
- Focuses on high-growth companies with strong potential.
- Invests in both Indian and global equities.
- Actively managed with an emphasis on innovation-driven sectors.
Key Statistics:
- Category: Multi-Cap Fund
- AUM: ₹12,000+ Cr
- 5-Year CAGR: ~16%
- Expense Ratio: 1.07%
Who Should Invest?
If you’re interested in diversified, high-growth opportunities, this fund is a great pick.
Frequently Asked Questions (FAQs)
1. Is it safe to invest in equity mutual funds during a market correction?
Yes, investing in equity mutual funds during a correction can be beneficial, as you get to buy high-quality stocks at lower prices.
2. How do I choose the right equity mutual fund?
Look for funds with:
- A strong past performance record.
- Experienced fund managers.
- Reasonable expense ratios.
- Alignment with your investment goals.
3. What is the ideal investment horizon for equity mutual funds?
A long-term horizon of 5-10 years is recommended for maximum returns.
4. Should I invest in lump sum or SIP during a correction?
SIP (Systematic Investment Plan) is ideal for averaging out market fluctuations, but lump sum investments can be advantageous if the market has bottomed out.
5. What are the risks of investing in equity mutual funds?
- Market Risk: Prices fluctuate with economic and political conditions.
- Sector Risk: Poor performance in a particular sector can impact the fund.
- Liquidity Risk: Some funds may have lower liquidity during extreme corrections.
Conclusion
Market corrections are opportunities in disguise for long-term investors. The five equity mutual funds listed above have demonstrated resilience and strong performance, making them excellent choices during uncertain times.
By investing wisely in large-cap, mid-cap, and value-oriented funds, you can maximize returns while mitigating risks. Always ensure that your investment decisions align with your financial goals and risk tolerance.
