Mutual funds in the US manage around $11 trillion (around Rs509 trillion) in assets, serving at least 50 million households; 66% of households have more than half their savings in mutual funds.
India is at the threshold of a big boom in retail participation in managed funds through the mutual fund route. Regulatory action has made funds one of the most transparent and low-cost options for retail investors. Performance history of more than a decade has proved that managed funds can deliver cost-plus returns, that beat the benchmark by at least 3-5 percentage points.
But retail participation remains tiny. With just 5.5% of household savings in mutual funds and about 10 million investors, the mutual fund is yet to become a vehicle of mass investment. Apart from regulatory issues in terms of skewed incentives in similar products managed by different regulators, one issue that keeps money in fixed deposits and gold rather than funds, is too much choice. Choosing 6-10 schemes from a menu of at least a thousand is not easy. Making the choice decision even more difficult is the noise created by a multitude of awards and ratings that point out conflicting toppers as thrown up by different processes.
To analyze and download the Mint 50 fund listings, go the online interactive table here
Click here to see Mint 50 Best Funds
With clarity as its core mandate, Mint has worked the last three years to remove the fog of obfuscation around business, economy and finance. Mint 50 is yet another step in this direction. The personal finance team, lead by mutual funds editor Kayezad E. Adajania, has put together a list of 50 funds that are investment worthy. As a first filter, we used star ratings from global mutual fund tracker Morningstar and shortlisted 292, three-, four- and five-star rated funds. A qualitative process that includes portfolio, fund manager and expense ratio analysis, got us down to 50 across equity, balanced and debt funds. We’ll audit the portfolio every quarter for rogue funds or managers and churn it once a year, if needed. Do send us your comments at firstname.lastname@example.org