Which mutual fund will give the best returns in 2021?

I’m hoping that you are familiar with the tagline ‘mutual funds are subject to market risk’. So, when investing in mutual funds, one should be aware of the risk involved. At the end of 2020, we can only predict which mutual fund can perform better in the coming year based on their past performance. Here are my key takes:

Equity Funds: Axis Bluechip Fund: One of the best performing equity mutual funds with an average 5-year return of 14.83%. This fund has performed better than peers in the past few years and we expect it to show significant growth in 2021. This fund invests typically in big companies so any market changes will have an impact on the performance of the fund.

ICICI Prudential Bluechip Fund: This fund typically invests in sectors like Financial, Technology, Telecommunication, Energy, Automobile, FMCG, etc. All these sectors are growing and we can expect further growth in these. The fund has an average 5-year return of 11.88%, whereas, 3-year return settled at 6.94%. This can be a good investment option if you are looking for growth over the years.

Mirae Asset Large Cap Fund: This fund is best-performing among peers with major investments in sectors like Finance, technology, communication, energy, FMCG, etc. The average 5-year return of this fund settled 13.93%. This fund has a low expense ratio of 1.67%. So, you can expect further growth under this fund.

SBI Magnum Multicap Fund: This fund invests about 58.69% in large-cap stocks, with an average 5-year return of 11.93%. It invests majorly in the sector like finance, technology, cement, software, etc. This makes the investment in this fund more attractive as all these sectors have high growth-potential and will continue to rise in the next few years. This analysis is based on several factors that we have applied to understand the right mutual fund.