Anyone new to investing in mutual funds usually begins with one question in mind - what are the top mutual funds I can invest in, some of us get even more specific and ask for the “top equity mutual funds”. This article will give you a comprehensive list of the top equity mutual funds you could consider investing in.

Top-Rated Equity Mutual Funds in India

Refer to this table below to have a quick insight into the best equity mutual funds to invest in. It includes all the top-rated equities. 

Tips To Choose The Best Equity Mutual Funds

There is a wide range of options available when it comes to investing in the top equity mutual funds. Undoubtedly, that's good news as that helps diversify your portfolio. But at the same time, investing in the right schemes is also challenging to avoid major losses. Also, the decision-making task becomes more crucial because equity mutual funds are subject to market fluctuations, the decision-making task becomes more crucial. 

So, to cut out on your confusion, here are some pro tips to help you get the right investment scheme in the top equity mutual funds. Ask yourself these questions before investing-

• Have you planned your financial objective?

Undoubtedly, wealth creation is the ultimate goal of any investment, including equity mutual funds. However, the objective of your investment also plays a major role. It might be your child's wedding or higher studies that you are accumulating funds for or maybe your dream car. Whatever the reason, once you finalise your objective, it becomes easier to look for a plan that can fulfil your objective. 

• Did you finalise the amount of risk to be taken?

Equity mutual funds are affected by market risks and fluctuations. So, before you begin your journey as an investor, it is essential to understand that you may not always be on the win-win side. Sometimes, you may not receive the desired results. Nevertheless, you must also realise that mutual funds are one of the safe investment options. So, analyse your risk appetite to keep yourself off the shock. 

• Are you sure you checked for all the top equity mutual funds?

Surf and surf through all the best equity mutual funds to invest in. Do not leave any stone unturned to find the top equity mutual funds list. The more options you have, the better you can decide. However, at the same time, do not indulge in various sources or platforms as it will only add to your confusion. 

• Do you have reliable sources to check the fund's history?

When you finalise the equity mutual fund you want to invest in, do the maximum possible research on the fund's history. Do not get overwhelmed with the short-term profits made by a company. Look for consistency in the profit they have been making. Find reliable sources and stick to them to gain information about the fund house and whether it's worth investing in it. 

• Is the expense ratio fair enough?

The expense ratio is the amount the fund house charges in lieu of maintaining your fund and the assets. The companies have to mention it in their details. So, have a look and make a rough calculation of the net profit you will earn after deducting the expense ratio. 

Taxation On Equity Mutual Funds

While you are planning your equity investment, you must also keep in mind the taxation levied on the profit you earn through equity mutual fund investment. Taxation on the equity mutual funds is not decided on one simple ground. Because the equity mutual fund is a vast concept, its taxation is also quite complex, though not difficult to understand. Let's see how it's calculated-

• The taxation charged on equity mutual funds is subject to the type of scheme chosen, the returns earned, and most importantly, the tenure of investment

There are two types of gains through equity mutual funds and both are subject to taxation

• Capital Gains: Gains through the selling of capital assets
• Dividends: The profit or returns gained through investing in an equity mutual fund scheme

Under capital gains, you are charged if the gains exceed ₹1 lakh in the financial year. There are two sections

• Short-term capital gain: The taxation levied on STCG is 15% 
• Long-term capital gain: The taxation charged on LTCG is 10% 

Under dividends, you are charged 10% if the profit exceeds ₹5000/financial year

Conclusion

Browse all the options available before putting your hands on the best equity mutual fund to invest. Shortlisting the best available options is the primary step, followed by detailed research on your chosen equity. Know the history of the company you are investing in, analyse your risk appetite, and carve out your investment plan accordingly. The longer you stay with a scheme, the higher your chance to make the most out of it. 

FAQs

What is the best equity mutual fund?

The meaning of the best equity mutual fund may differ for different investors. Some may go for the one with the least risk associated, while others may look for high returns irrespective of the associated risk. However, to get the right investment done, check the fund house's history and the returns they can offer at minimal risk. 

How much should one invest in equity mutual funds? 

The answer to this question is entirely subjective, and there is no wrong or right answer for it. How much one should invest in equity mutual funds depends entirely on the financial goals of the person investing and how long the person has to stay invested in accomplishing that goal.
It is crucial for one to identify the financial goals and prioritise them. It then becomes easier to calculate how much it will be feasible for them to invest in equity mutual funds. One should first make sure to invest and then go for expanding the rest.