Highest AUM Mutual Fund Schemes In India
07 May 2025 7 mins Investing
Investing in mutual funds has become a popular choice for individuals looking to grow their wealth. With the Indian mutual fund market continuously evolving, understanding which schemes hold the highest assets under management (AUM) can significantly influence your investment decisions. This article delves into the largest mutual funds in India, providing insights into their performance, management, and how they fit into an overall investment strategy.
Key Takeaways:
Understanding AUM and its significance in mutual fund selection.
Overview of the top mutual funds in India based on AUM.
Actionable tips for choosing the right mutual fund scheme for your financial goals.
Understanding Assets Under Management (AUM)
Assets Under Management (AUM) is a crucial metric that indicates the total market value of the investments that a mutual fund manages on behalf of its clients. A higher AUM often reflects investor trust and the fund’s capability to manage substantial investments. However, it’s important to note that AUM is not the sole indicator of a fund’s performance; factors such as returns, risk profile, and management fees also play a significant role.
Why AUM Matters in Mutual Fund Selection
When evaluating mutual funds, AUM can provide insights into:
Popularity: A high AUM typically indicates strong investor confidence in a fund. For instance, the SBI Nifty Index Fund, with an AUM of ₹1,50,000 crores, is a testament to the trust investors place in SBI Mutual Fund.
Liquidity: Larger funds tend to have better liquidity, making it easier to buy or sell units without significantly impacting the fund's price. This is especially important in volatile markets where quick access to cash may be necessary.
Stability: Funds with large AUM often have established track records and experienced management teams. For example, HDFC Top 100 Fund has a long-standing reputation and a robust management strategy that appeals to conservative investors.
Top Mutual Fund Schemes in India by AUM
As of October 2023, here are some of the largest mutual funds in India based on AUM:
Mutual Fund Scheme | Fund House | AUM (in ₹ Crores) | Type | 1-Year Return |
|---|---|---|---|---|
SBI Mutual Fund - SBI Nifty Index Fund | SBI Mutual Fund | 1,50,000 | Index Fund | 15.5% |
HDFC Mutual Fund - HDFC Top 100 Fund | HDFC Mutual Fund | 90,000 | Large Cap | 18.2% |
ICICI Prudential Mutual Fund - ICICI Prudential Nifty Next 50 Index Fund | ICICI Prudential | 75,000 | Index Fund | 14.8% |
Axis Mutual Fund - Axis Bluechip Fund | Axis Mutual Fund | 68,000 | Large Cap | 17.0% |
Franklin Templeton Mutual Fund - Franklin India Focused Equity Fund | Franklin Templeton | 60,000 | Equity | 19.0% |
These schemes have consistently attracted substantial investments, making them the top choices for investors looking to build a robust portfolio. Notably, the Franklin India Focused Equity Fund’s 1-year return of 19.0% showcases the potential for growth in equity-focused investments.
Factors Influencing the Performance of Mutual Funds
While AUM is an important metric, several other factors can influence the performance of mutual funds:
1. Fund Management
The experience and track record of the fund manager play a significant role in determining a fund’s success. A seasoned manager with a proven strategy can navigate market fluctuations more effectively. For instance, fund managers who have weathered previous market downturns often have a deeper understanding of risk management.
2. Market Conditions
Economic factors such as inflation, interest rates, and market sentiment can impact mutual fund performance. For example, during periods of high inflation, equity funds may underperform compared to debt funds. Understanding these conditions can help investors make informed decisions regarding their allocation between asset classes.
3. Expense Ratio
The expense ratio represents the costs associated with managing the fund. A lower expense ratio can lead to higher net returns for investors. For instance, if two funds yield the same gross return, the one with a lower expense ratio will provide better returns to the investor. It's crucial to compare this across similar funds to ensure you are not overpaying for management services.
4. Investment Horizon
Investors should consider their financial goals and investment horizon when selecting mutual funds. Some funds may be more suitable for long-term growth, while others may focus on short-term gains. For example, equity funds are typically better suited for long-term investors due to their potential for higher returns over time, while debt funds may be preferable for those seeking stability in the short term.
Actionable Steps to Invest in Mutual Funds
Investing in mutual funds can be straightforward if you follow these steps:
1. Assess Your Financial Goals
Identify your investment objectives—whether it’s wealth creation, retirement savings, or funding education. This will help narrow down suitable funds. For example, if your goal is to save for your child’s education in 10 years, you might opt for a moderate-risk equity fund that aligns with that timeframe.
2. Research and Compare Funds
Use online platforms to compare funds based on AUM, historical performance, and risk profile. Tools like mutual fund calculators can also aid in decision-making. Websites like Value Research and Morningstar provide in-depth analysis and ratings that can be invaluable during this step.
3. Understand the Risks
Every investment comes with risks. Read the fund’s offer document and understand the risk factors involved. Consider your risk tolerance before investing. For example, if you are risk-averse, you may want to avoid aggressive equity funds in favor of balanced or debt funds.
4. Start Small
If you’re new to mutual funds, consider starting with a Systematic Investment Plan (SIP). This allows you to invest small amounts regularly, reducing the impact of market volatility. A SIP can be as low as ₹500 per month, making it accessible for many investors.
5. Monitor Your Investments
Regularly review your mutual fund portfolio to ensure it aligns with your financial goals. Rebalance your investments as necessary based on performance and market conditions. Setting a schedule to review your portfolio every six months can help you stay on track toward your financial objectives.
Frequently Asked Questions (FAQs)
What is AUM in mutual funds?
AUM stands for Assets Under Management, which is the total market value of the investments managed by a mutual fund on behalf of its investors. It is an important metric for assessing the size and popularity of a fund.
How does AUM impact mutual fund performance?
AUM can indicate the fund's popularity and trustworthiness but does not directly correlate with performance. Factors like management expertise, market conditions, and expense ratios are also crucial for evaluating a fund's potential returns.
What are the benefits of investing in large AUM mutual funds?
Large AUM mutual funds often offer better liquidity, stability, and investor confidence, making them a popular choice for many investors. They may also have access to better investment opportunities due to their size and reputation in the market.
How can I choose the right mutual fund?
Consider your financial goals, risk tolerance, expense ratios, and the fund manager's track record when selecting a mutual fund. It's essential to align your investment choices with your overall financial strategy.
Is it advisable to invest in mutual funds through SIPs?
Yes, SIPs allow for disciplined investing and help mitigate the risks of market volatility by averaging the purchase cost over time. This can lead to better long-term returns, especially in fluctuating markets.
Summary of Insights
AUM is a critical metric in assessing mutual funds but should not be the only factor considered.
Top mutual funds in India demonstrate strong performance and investor trust, indicating their reliability.
Understanding the underlying factors influencing mutual fund performance can lead to better investment decisions and outcomes.
Taking actionable steps and monitoring investments regularly is crucial for financial success and alignment with personal goals.
For personalized financial advice and to explore mutual fund options tailored to your needs, contact a financial advisor today!
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Author - Abhishek Sonawane
Abhishek Sonawane, an MBA graduate from the prestigious Indian Institute of Management Visakhapatnam (IIMV), brings over ten years of experience in the finance domain. His extensive background includes various roles in financial management and strategy, providing him with a comprehensive understanding of the financial landscape. Abhishek’s expertise and dedication to financial education make him an authoritative voice in personal finance, helping readers make informed financial decisions.