Best mutual fund SIP portfolios to invest in 2021 | Economic Times

If you are looking to invest in mutual fund schemes to meet your long-term financial goals and don’t know how to go about creating your portfolio, here’s some help. This article will help you with ready-made SIP portfolios based on your risk profile and investment amount. These best mutual fund SIP portfolios are meant for investors looking to invest in a mix of mutual funds for their various financial goals. ETMutualFunds.com launched its recommended mutual fund portfolios to invest through SIPs in October 2016. Since then, we have been closely monitoring the schemes in these portfolios and coming up with an update on them regularly. In this article we will tell you which schemes you can pick if you are starting your investment journey in 2021. If you have been investing in the earlier portfolios, you can continue to invest in them. Creating a mutual fund portfolio involves several steps. To begin with, you should shortlist some schemes with a consistent long-term performance record. Next, you should pick the schemes that are in line with your risk profile and investment goals. Then you would hit the next roadblock: how to fix the composition of the portfolio? The task is not finished yet. You should also need to monitor and review the performance of the portfolio regularly and take remedial steps if needed. Many investors find the task a bit too difficult to handle. That is why we launched these SIP portfolios. ETMutualFunds.com's best mutual fund SIP portfolios are meant for three different individual risk profiles: conservative, moderate and aggressive. We have also considered three SIP baskets – between Rs 2,000-5,000, between Rs 5,000-10,000 and above Rs 10,000 – while creating these portfolios. Take a look at our recommended portfolios. Keep an eye for our monthly updates. We would keep a close watch on these schemes and update to you about their performance every month. We will keep a close track of the performance of these schemes and update you regularly every month.Recommended portfolio for conservative investors SIP amount Scheme name Allocation (%) Rs 2000-5000 Axis Bluechip Fund 50% ICICI Prudential Regular Savings 50% >Rs 5,000-10,000 Axis Bluechip Fund 30% Mirae Asset Large Cap Fund/ Canara Robeco Bluechip Equity Fund 20% ICICI Prudential Regular Savings 50% >Rs 10,000 Axis Bluechip Fund 25% Mirae Asset Large Cap Fund/ Canara Robeco Bluechip Equity Fund 15% Kotak Standard Multicap Fund/ Aditya Birla Sun Life Equity Fund/ SBI Magnum Multicap Fund 10% ICICI Prudential Regular Savings 50% Recommended portfolios for moderate investors SIP amount Scheme name Allocation (%) Rs 2000-5000 Axis Bluechip Fund 65% ICICI Prudential Regular Savings 35% >Rs 5,000-10,000 Axis Bluechip Fund 40% UTI Equity Fund/ Kotak Standard Multicap Fund/ Aditya Birla Sun Life Equity Fund/ SBI Magnum Multicap Fund 25% ICICI Prudential Regular Savings - Direct Plan - Growth 35% >Rs 10,000 Mirae Asset Large Cap Fund/ Canara Robeco Bluechip Equity Fund 15% Axis Bluechip Fund 30% UTI Equity Fund/ Kotak Standard Multicap Fund/ Aditya Birla Sun Life Equity Fund/ SBI Magnum Multicap Fund 20% ICICI Prudential Regular Savings 35% Recommended portfolios for aggressive investors SIP amount Scheme name Allocation (%) Rs 2000-5000 Parag Parikh Long Term Equity Fund 50% Axis Bluechip Fund 50% >Rs 5,000-10,000 Parag Parikh Long Term Equity Fund 30% Axis Bluechip Fund 20% Mirae Asset Hybrid Equity Fund/ SBI Equity Hybrid Fund/ Canara Robeco Equity Hybrid Fund 15% Mirae Asset Emerging Bluechip Fund - Direct Plan - Growth 35% >Rs 10,000 Axis Bluechip Fund 25% Axis Small Cap Fund/ SBI Small Cap Fund 10% Parag Parikh Long Term Equity Fund 20% Mirae Asset Emerging Bluechip Fund 20% Mirae Asset Hybrid Equity Fund/ SBI Equity Hybrid Fund/ Canara Robeco Equity Hybrid Fund 10% Axis Mid Cap Fund or Tata Equity PE Fund 15% Here is our methodology: Methodology for equity funds: ETMutualFunds.com has employed the following parameters for shortlisting the equity mutual fund schemes.1. Mean rolling returns: Rolled daily for the last three years. 2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund.he H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H. i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast. ii) When H is less than 0.5, the series is said to be mean reverting. iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series 3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. X =Returns below zero Y = Sum of all squares of X Z = Y/number of days taken for computing the ratio Downside risk = Square root of Z 4. Outperformance: It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market. Average returns generated by the MF Scheme = [Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate}5. Asset size: For Equity funds, the threshold asset size is Rs 50 crore Methodology for debt funds: 1. Mean rolling returns: Rolled daily for the last three years. 2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H. i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast. ii) When H is less than 0.5, the series is said to be mean reverting. iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series 3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. X =Returns below zero Y = Sum of all squares of X Z = Y/number of days taken for computing the ratio Downside risk = Square root of Z 4. Outperformance: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund. 5. Asset size: For Debt funds, the threshold asset size is Rs 50 crore Methodology for hybrid funds: 1. Mean rolling returns: Rolled daily for the last three years. 2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H. i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast. ii) When H <0.5, the series is said to be mean reverting. iii) When H>0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. X = Returns below zero Y = Sum of all squares of X Z = Y/number of days taken for computing the ratio Downside risk = Square root of Z 4. Outperformance i) Equity portion: It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market. Average returns generated by the MF Scheme = [Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate} ii) Debt portion: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund. 5. Asset size: For Hybrid funds, the threshold asset size is Rs 50 crore (Disclaimer: past performance is no guarantee for future performance.)