When you think of investing in mutual funds, the first question that comes to mind is — which fund to choose? In such a situation, the rating of the fund comes as an important indicator. A good rating not only tells how the fund has performed so far, but also shows how stable the fund has been amid market fluctuations. Especially if you are investing in mutual funds for the first time, relying on top-rated funds can be a wise move. In this write-up, we will pick five top-rated schemes from SBI Mutual Fund and review their past 10-year performance. But before moving ahead, let’s discuss other key factors that need to be considered while selecting a plan.
Besides rating, what are other important parameters to select an MF scheme?
It is not right to make a decision based only on ratings. An investor should also keep in mind some other important things while choosing a fund, such as the track record of the fund, the expense ratio, the experience of the fund manager, the portfolio strategy of the fund, the risk-return profile, and one’s own investment objective. Whether there is an option for SIP or not, the lock-in period of the fund – all these factors play a crucial role in fund selection.
Rating agencies change the rankings and ratings of funds from time to time. Their evaluation is based on several parameters, such as the fund’s long-term and short-term returns, risk-adjusted performance, assets under management (AUM), portfolio quality, and volatility. For example, if a fund is consistently delivering good returns but with excessive risk, its rating may decline.
Here are the five top-rated SBI mutual funds with the best 10-year returns. These funds have delivered up to 15.04% annualised returns in the last 10 years.
1. SBI Contra Fund
Date of launch: July 5, 1999
Value Research Rating: 5-star
10-year returns: 15.04%
2. SBI Long Term Equity Fund
Date of launch: March 31, 1993
Value Research Rating: 5-star
10-year returns: 13.63%
3. SBI Magnum Midcap Fund
Date of launch: March 29, 2005
Value Research Rating: 4-star
10-year returns: 14.82%
4. SBI Large & Midcap Fund
Date of launch: February 28, 1993
Value Research Rating: 4-star
10-year returns: 13.96%
5. SBI Bluechip Fund
Date of launch: February 14, 2006
Value Research Rating: 4-star
10-year returns: 12.02%
(Source: Value Research)
However, it is important to always remember that no matter how much research you do on mutual funds or how many safety measures you take, market risk cannot be completely avoided. It is not easy to predict the direction the stock market will take. And since the performance of mutual funds is directly dependent on market movements, it is difficult to avoid fluctuations.
Therefore, it is better to gather complete information before investing, understand your risk-taking capacity and move ahead with a long-term view.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.