Best Mutual Fund SIP Portfolios to Invest in February 2025
Many mutual fund investors, especially new investors, are unable to choose the right schemes that meet their financial goals. For long-term goals like retirement planning, it becomes more of a challenge. To help such investors, a set of tailor-made portfolios of mutual funds has been prepared, keeping in view the risk profile, investment horizon, and investment amount.
These suggested portfolios, launched in October 2016, have been monitored and updated constantly to ensure they are performing the best. Low-performing schemes are reviewed frequently, and if necessary, they are replaced with better alternatives. The schemes forming part of these portfolios are selected through a well-defined in-house process, ensuring that investors receive well-researched recommendations.
Recommended Portfolio for Conservative Investors
For SIP Amount Rs.2,000–Rs.5,000
- Equity, Large Cap (50%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Hybrid, Conservative Hybrid (50%): ICICI Prudential Regular Savings – Direct Plan – Growth
For SIP Amount Rs.5,000–Rs.10,000
- Equity, Large Cap (30%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Equity, Large Cap (20%): Mirae Asset Large Cap Fund / Axis Bluechip Equity Fund – Direct Plan – Growth
- Hybrid, Conservative Hybrid (50%): ICICI Prudential Regular Savings – Direct Plan – Growth
For SIP Amount Above Rs.10,000
- Equity, Large Cap (25%): Canara Robeco Bluechip Fund – Direct Plan – Growth
- Equity, Large Cap (15%): Mirae Asset Large Cap Fund / Axis Bluechip Equity Fund – Direct Plan – Growth
- Equity, Flexi Cap (10%): Parag Parikh Flexi Cap Fund / Canara Robeco Flexi Cap Fund – Direct Plan – Growth (in that order of preference)
- Hybrid, Conservative Hybrid (50%): ICICI Prudential Regular Savings – Direct Plan – Growth
Recommended Portfolio for Moderate Investors
Moderate investors balance risk and returns, looking for growth with a tolerable level of volatility. The suggested portfolios are as follows:
For SIP Amount Rs.2,000–Rs.5,000
- Equity, Large Cap (65%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Hybrid, Conservative Hybrid (35%): ICICI Prudential Regular Savings – Direct Plan – Growth
For SIP Amount Rs.5,000–Rs.10,000
- Equity, Large Cap (40%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Equity, Flexi Cap (25%): Parag Parikh Flexi Cap Fund / UTI Flexi Cap Fund / Canara Robeco Flexi Cap Fund – Direct Plan – Growth (in that order of preference)
- Hybrid, Conservative Hybrid (35%): ICICI Prudential Regular Savings – Direct Plan – Growth
For SIP Amount Above Rs.10,000
- Equity, Large Cap (25%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Equity, Large Cap (15%): Mirae Asset Large Cap Fund / Axis Bluechip Equity Fund – Direct Plan – Growth
- Equity, Flexi Cap (25%): Parag Parikh Flexi Cap Fund / UTI Flexi Cap Fund / Canara Robeco Flexi Cap Fund – Direct Plan – Growth (in that order of preference) .
- Hybrid, Conservative Hybrid (35%): ICICI Prudential Regular Savings – Direct Plan – Growth .
Recommended Portfolio for Aggressive Investors
Aggressive investors can afford to take higher risks in the expectation of getting a better return. For such investors, the following portfolios are suggested:
For SIP Amount Rs.2,000–Rs.5,000
- Equity, Flexi Cap (50%): Parag Parikh Flexi Cap Fund / PGIM India Flexi Cap Fund – Direct Plan – Growth
- Equity, Large Cap (50%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
For SIP Amount Rs.5,000–Rs.10,000
- Equity, Flexi Cap (30%): Parag Parikh Flexi Cap Fund / PGIM India Flexi Cap Fund – Direct Plan – Growth
- Equity, Large Cap (25%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Hybrid, Aggressive Hybrid (35%): Mirae Asset Hybrid Equity Fund / SBI Equity Hybrid Fund / Canara Robeco Equity Hybrid Fund – Direct Plan – Growth (in that order of preference)
- Equity, Mid Cap (10%): PGIM India Midcap Opportunities Fund / Axis Midcap Fund / Invesco India Mid Cap Fund – Direct Plan – Growth
For SIP Amount Above Rs.10,000
- Equity, Large Cap (20%): Canara Robeco Bluechip Equity Fund – Direct Plan – Growth
- Equity, Small Cap (10%): Axis Small Cap Fund / SBI Small Cap Fund / Nippon India Small Cap Fund – Direct Plan – Growth
- Equity, Flexi Cap (15%): Parag Parikh Flexi Cap Fund / PGIM India Flexi Cap Fund / Canara Robeco Flexi Cap Fund – Direct Plan – Growth (in that order of preference)
- Equity, Large and Mid Cap (15%): Axis Growth Opportunities Fund / Canara Robeco Emerging Equities Fund – Direct Plan – Growth (in that order of preference)
- Hybrid, Aggressive Hybrid (15%): Mirae Asset Hybrid Equity Fund / SBI Equity Hybrid Fund / Canara Robeco Equity Hybrid Fund – Direct Plan – Growth (in that order of preference)
- Equity, Mid Cap (15%): PGIM India Midcap Opportunities Fund / Axis Midcap Fund / Invesco India Mid Cap Fund – Direct Plan – Growth
These portfolios cater to a variety of investment needs and help investors optimize their returns while managing their risk exposure effectively.
Methodology for Equity Funds
The equity mutual fund schemes included in these portfolios are shortlisted based on the following criteria:
1. Mean Rolling Returns: The returns are calculated based on daily rolling data over the last three years.
2. Consistency in the Last Three Years: The Hurst Exponent (H) is used to assess the consistency of a fund. It measures the randomness of the Net Asset Value (NAV) series, where:
- If H = 0.5, the returns follow a geometric Brownian motion, making them difficult to forecast.
- If H < 0.5, the returns exhibit a mean-reverting pattern.
- If H > 0.5, the returns have a trend which is persistent in nature and bigger values indicate the stronger trend.
3. Downside Risk: This measures the negative returns of a fund, and it calculates as follows:
- 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: To determine a fund’s ability to outperform market expectations, Jensen’s Alpha is taken as the measure over the last three years. Jensen’s Alpha can be defined as risk-adjusted return that a mutual fund generates relative to an expected market return. The formula used is:
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: Only equity funds with an asset size of at least Rs.50 crore are considered.
Methodology for Debt Funds
Debt mutual funds are analyzed on similar parameters, but some extra parameters like debt-specific parameters are taken into consideration:
1. Mean Rolling Returns: Computed daily over the last three years.
2. Cointegration and Last Three-Year Consistency: Calculated through the Hurst Exponent (H), in which:
- If H < 0.5, returns are mean-reverting.
- If H > 0.5, returns are persistently trending.
3. Downside Risk: This measures the negative return of the fund and is computed similar to that of equity funds.
4. Outperformance:
- For Equity Portion: Measured by Jensen’s Alpha, which captures the risk-adjusted performance compared to market expectations.
- For Debt Portion: The return of the fund is compared with the benchmark return using rolling daily returns. The active return of the fund is then calculated as:
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: Only hybrid funds with an asset size of at least Rs. 50 crore are included in the selection.
Only those mutual funds that have shown strong historical consistency, minimal downside risk, and superior risk-adjusted returns are recommended for systematic investment plans (SIPs) through these structured methodologies. Such curated portfolios can be helpful for investors seeking reliable and stable long-term wealth creation.
