Few days back, I came across a tweet (link) that highlighted the number of mutual fund schemes that are available for Indian investors.
The answer is 1729!
Yes. This is the number of schemes that you as a mutual fund investor can invest your money in (as per data available for the end of February 2021 on AMFI’s site or you can download it here).
To be fair, SEBI has done a lot to help make it easy for investors to pick the right funds for their portfolios. But given the number of these schemes, i.e. 1729, out of which 1008 are open-ended schemes, it is also true that at least some investors will be confused and find it extremely difficult to pick the right funds.
Not all fund categories are suitable for all investors. Investing in just a few schemes from a few categories is sufficient for most investors.
Since I am a professional investment advisor, I can only offer specific advice to my clients. But I get hundreds of emails asking me for the best mutual funds for SIP and the best mutual funds for lumpsum investing. People want to create a structure of solid mutual funds for their long-term investment portfolio. But they don’t know how to do it.
When you have to shortlist investment-worthy mutual fund schemes, several factors have to be considered. Some of these are the consistency of returns being generated, fund vintage, benchmark-linked consistency analysis, peer group-linked analysis, quality of the underlying stocks, capture parameters, risk parameters, expenses of the fund, fund AUM or size and its impact on performance, investment mandate and adherence to it, investment style, fund manager’s role vs. process’s role. These are just some of the factors being used from amongst the several qualitative and quantitative ones. And all factors are given different weightage while filtering and then used as part of the overall evaluation equation.
If you are looking for the Top Mutual Funds to invest in 2021 in India, then you need to be very careful while picking the right funds. I would say that it’s not exactly rocket science to pick the right and suitable funds. And if you can do it yourself, then that’s great. But if you are unable to pick the right mutual funds yourself, then you can take the help of a good investment advisor.
Picking good funds is important but shouldn’t be the first step. As an investor, you need to have a good strategy that is customized for your goals and then invest in it for a long period of time. And this is best achieved by having a good financial plan and sticking with it.
That’s it. And if you are curious about how many schemes are there in individual fund categories, then here is the breakup of this number based on the different mutual fund categories as well as debt fund categories:
- Overnight Fund – 30
- Liquid Fund – 38
- Ultra Short Duration Fund – 29
- Low Duration Fund – 25
- Money Market Fund – 19
- Short Duration Fund – 27
- Medium Duration Fund – 17
- Medium to Long Duration Fund – 13
- Long Duration Fund – 2
- Dynamic Bond Fund – 25
- Corporate Bond Fund – 20
- Credit Risk Fund – 18
- Banking and PSU Fund – 23
- Gilt Fund – 21
- Gilt Fund with 10-year constant duration – 4
- Floater Fund – 9
- Multi-Cap Fund – 10
- Large Cap Fund – 32
- Large & Mid Cap Fund – 28
- Mid Cap Fund – 26
- Small Cap Fund – 24
- Dividend Yield Fund – 7
- Value Fund/Contra Fund – 18
- Focused Fund – 25
- Sectoral/Thematic Funds – 105
- ELSS Funds – 42
- Flexi Cap Fund – 25
- Conservative Hybrid Fund – 21
- Balanced Hybrid Fund/Aggressive Hybrid Fund – 34
- Dynamic Asset Allocation/Balanced Advantage Fund – 24
- Multi-Asset Allocation Fund – 10
- Arbitrage Fund – 27
- Equity Savings Fund – 23
- Retirement Fund – 25
- Children’s Fund – 10
- Index Funds – 39
- Gold ETFs – 11
- Other ETFs – 89
- Fund of funds (FOF) investing overseas – 33
- Closed-Ended Fixed Term Plan – 581
- Closed-Ended Capital Protection Oriented Schemes – 22
- Closed-Ended Infrastructure Debt Fund – 9
- Other Closed-Ended Debt Scheme – 8
- Closed-Ended ELSS Schemes – 25
- Closed-Ended Other Equity Schemes – 54
- Income/Debt-Oriented Interval Schemes – 22
That’s your breakup of the number of schemes that are currently available in various categories.
If you need some assistance in picking the right funds, then you can also consider subscribing to Stable Model Funds (Premium).
By the way, as an aside, here is why the figure of 1729 caught my eye initially. I have a science background as well (in addition to the current financial one). So years back, I had read about the special nature of this number 1729. It is the smallest number that can be expressed as the sum of two different cubes in two different ways. How? Here it is. 1729 is the sum of the cubes of 10 and 9 – cube of 10 is 1000 and cube of 9 is 729; adding the two numbers results in 1729. Another way is 1729 is the sum of the cubes of 1 and 12 – cube of 1 is 1 and cube of 12 is 1728; adding the two numbers results in 1729. This number is also known as the Hardy-Ramanujan Number and at times, referred to as the Taxicab number. You can read more about it here.