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Equity • Largecap Index Fund • NIFTY 50 - TRI
Equity • Largecap Next 50 Index Fund • NIFTY NEXT 50 - TRI
Equity • Flexi Cap Fund • NIFTY 500 - TRI
Equity • Largecap Index Fund • NIFTY 50 - TRI
Equity • Flexi Cap Fund • NIFTY 500 - TRI
Equity • Flexi Cap Fund • NIFTY 500 - TRI
This analysis is generated by 1 Finance Research and updated as on December 2025.
What is the 1 Finance Score for mutual funds?
The 1 Finance Score for mutual funds is a straightforward metric for evaluating any mutual fund. We assess key parameters, including the underlying portfolio, risk-adjusted ratios, the fund manager's performance, and other relevant factors in depth. Based on these assessments, funds are scored and ranked into categories such as equity, debt, hybrid, and others.
Every mutual fund is assigned a score from 1 to 100.
Why 1 Finance Mutual Fund Scoring and Ranking
When investing in mutual funds, people often focus solely on past returns. Most mutual fund screeners available in the market rank funds based on performance over the last three to five years. However, it is unlikely that a mutual fund that was at the top three years ago will still be at the top after five years. This is why it's important to consider other key factors while choosing a mutual fund.
The 1 Finance Mutual Fund Scoring and Ranking system assesses each mutual fund based on a variety of qualitative and quantitative factors—key fundamental ratios, risk-adjusted returns, and underlying portfolio as well as the performance of the fund manager. Using these criteria, we provide a 1 Finance Score and rank them accordingly in their respective categories.
We have evaluated over 8,000 mutual funds schemes with our robust, reliable, research-based model to achieve these results. Our model is completely unbiased.
With 1 Finance Mutual Fund Scoring and Ranking, invest confidently in quality funds that will help you in the long run.
Methodology: How we select best mutual funds
The 1 Finance Mutual Fund Scoring and Ranking methodology relies on transparency and in-depth assessment using these key parameters:
We assess the fund's strength using key risk-adjusted ratios (Sharpe, Sortino, Jensen's Alpha, Treynor) along with drawdowns and recovery times after market crashes.
We evaluate fund manager's performance and track record based on their relevant experience, performance consistency, and the quality of their decisions.
We examine the fund's stability and resilience through a stress test (fund's ability to handle large redemptions smoothly) and the share of the top 10 investors to check concentration risk.
We analyse the efficiency of the fund manager's choices by examining the number of stock holdings, the information ratio, and the portfolio valuation (the P/E and P/B ratios). The final 1 Finance Score for mutual funds combines the fund score and the fund manager score. Funds are scored from 0 to 100 and then ranked within their respective categories: equity, debt, hybrid, tax-saver, and ETF.
How to use 1 Finance Mutual Fund Scoring and Ranking to build your portfolio
The 1 Finance Mutual Fund Scoring and Ranking model is a great starting point for evaluating mutual funds. Our unique model looks beyond past returns; it also analyses the potential for future performance by assessing key fundamentals and ratios. It helps you choose mutual funds that are likely to be less volatile and of better quality in the long run.
To guide you in building a portfolio, we have identified the best mutual funds across major categories: equity, debt, hybrid, tax-saver funds (ELSS), and ETFs. However, for personalised recommendations tailored to your financial goals and needs, it is advisable to consult a Qualified Financial Advisor.
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Your complete guide to mutual fund investing in 2026
TABLE OF CONTENT
What are mutual funds?
What makes mutual funds worth investing in?
Types of mutual fund: Understand which fund is right for you
What is the difference between Direct Plans and Regular Plans of a mutual fund?
Why you should buy Direct Plans over Regular Plans of mutual funds
How to invest in mutual funds in India
How to select the best mutual funds for investment in 2026
FAQ
What are mutual funds?
A mutual fund is a type of investment that pools money from many investors and collectively invests it in assets such as stocks and bonds. Each mutual fund is managed by a fund manager who decides where to invest your money. They watch the market closely, determine when to buy or sell investments, manage risks, and aim to earn higher returns than the benchmark.
When you invest in a mutual fund, you are purchasing units that represent your small share of ownership in all the assets, along with your portion of any profits or losses.
Mutual funds are an easy way to grow your wealth over time, whether your goals are long-term growth, regular income, or a combination of both.
What makes mutual funds worth investing in?
For many people, investing feels like an overwhelming task. And, to some extent, it is. You have to decide where to invest, how much to invest, when to rebalance your portfolio, when to exit your investments, and constantly check the market cycle. Then you have to understand the ratios and percentages, which can be truly arduous.
So, what's the easier option? Mutual funds. Here is what they offer:
- You've probably heard the saying: "Don't put all your eggs in one basket." In investment terms, your money is the egg, and the asset (stock, bond, etc.) is the basket. Mutual funds take care of the eggs and baskets by spreading your investment across multiple assets. This means if one stock dips, it won't tank your entire portfolio.
- Each mutual fund is handled by an experienced fund manager who will call the shots. They take all the important decisions—from researching companies to invest in, tracking markets, deciding when to sell, and resetting asset allocation. You won't have to Google or ask ChatGPT when to buy or sell; you are in good hands with professionals doing the heavy lifting for you.
- You can start investing with as little as ₹500 through a Systematic Investment Plan (SIP). Do keep in mind that not all mutual funds allow a ₹500 minimum investment.
- Furthermore, you can invest at your own pace (lump sum or monthly SIPs), withdraw when you need (except for tax-saving funds), and easily invest online or through an app.
- Whether your goal is building long-term wealth or saving up for a specific purchase like a car, there is a mutual fund designed to help you achieve it.
- Investing in mutual funds is a transparent process because they are strictly regulated by the Securities and Exchange Board of India (SEBI). The regulator ensures that you receive daily Net Asset Value (NAV) updates, monthly portfolio disclosures, strict investor protection rules, and other measures. This way, you always know what your investment is worth, where your money is going, and that the system remains transparent.
Types of mutual fund: Understand which fund is right for you
To choose which mutual fund works the best for you, you need to know different kinds of mutual funds available in the market. Remember that each type of mutual fund serves a different purpose in your wealth-creation journey.
- Invest in the company's stocks
- Best for long-term investors seeking high-growth potential
- Risk level is high
- Invest in fixed-income instruments like government securities, bonds, etc.
- Best for investors who prefer steady income and low volatility
- Risk level is low to moderate
- Invest in a blend of equity and debt investments
- Best for those who want balanced risks and returns
- Risk level is moderate
These funds are designed for specific long-term goals and come with a lock-in period. They have two categories:
- Retirement Funds: Focused on building a retirement corpus (lock-in up to retirement or 5 years)
- Children's Funds: Focused on education or future expenses (lock-in till the child turns 18 years)
- Index Funds: Invest in a portfolio that mirrors a market index like NIFTY 50, SENSEX, providing a passive, low-cost investment.
- Exchange-Traded Funds (ETFs): Typically bought and sold on stock exchanges like regular shares, ETFs can track market indices, commodities like gold.
- Fund of Funds (FoFs): Invest in a collection of different mutual funds, giving broader diversification across multiple asset types and strategies.
- International Funds: Provide global exposure beyond Indian markets, diversifying portfolios beyond domestic boundaries.
- Commodity Funds: Invest in commodities like gold or silver, often via ETFs or FoFs for easy access and trading.
What is the difference between Direct Plans and Regular Plans of a mutual fund?
Every mutual fund scheme is available in two variants: a Direct Plan and a Regular Plan. While everything remains the same, the only thing that changes is the cost structure—the Total Expense Ratio (TER) that the Asset Management Company (AMC) charges to manage the funds.
When you buy a mutual fund directly from the mutual fund house or AMC, it is a direct transaction. Hence it is Direct Plan. The Securities and Exchange Board of India (SEBI) mandates the maximum TER a fund house can charge for both equity and debt schemes.
Mutual fund houses often rely on distributors to sell their plans. These distributors need an incentive (commission) to market the mutual funds. So when you buy a regular mutual fund, you have to bear the distributor's commission as well that AMCs have to pay to the distributor network. It will be part of TER. So, the TER for a Regular Plan is always higher compared to the Direct Plan of the same scheme.
Why you should buy Direct Plans over Regular Plans of mutual funds
The main advantage of buying Direct Plans instead of Regular Plans is that you avoid paying commissions to intermediaries like brokers or distributors.
- Direct Plans of mutual funds do not include the commission that is paid to mutual fund distributors. As a result, the charge for managing the fund or the Total Expense Ratio will be lower. Typically, Regular Plans have a Total Expense Ratio that is 0.5% to 1.5% higher than that of Direct Plans.
- Direct mutual funds have higher Net Asset Value (NAV) because they charge lower expense ratios than regular funds. NAV is the per-share price of a mutual fund.
- By avoiding commissions paid to mutual fund distributors, more of your money stays invested in the fund. It means your net returns from mutual fund investments will be higher in the long run, thanks to compounding.
- You can check how much commission you pay on your mutual fund using our Mutual Fund Commission Calculator.
How to invest in mutual funds in India
Investing in mutual funds is quite easy and simple. You can start your mutual fund investment journey through one of the following methods:
- You can directly buy mutual funds through Asset Management Companies. You can go directly to the branches of mutual fund houses and buy them offline. You can also visit the websites of mutual funds and purchase them. Typically, when you buy directly from AMCs, you get Direct Plans.
- You can buy mutual funds from Registrar and Transfer Agents (RTAs) such CAMS and KFin Technologies. They offer Direct Plans of mutual funds.
- There are multiple online execution-only platforms from which you can buy Regular Plans of mutual funds.
- You can purchase mutual funds from distributors or brokers, either online or offline. They sell Regular Plans of mutual funds and charge a commission for their services.
- As a best practice, when buying mutual funds, check whether it is a Direct Plan or a Regular Plan. This will help you understand where you are paying commissions and where you are saving money. It will depend on where you are purchasing it from.
How to select the best mutual funds for investment in 2026
There is no one-size-fits-all approach when it comes to mutual fund investments. The "best" mutual fund for you will depend on multiple factors, such as your unique financial personality, which determines your risk tolerance, the goals you want to achieve, the time horizon you have, and a detailed analysis of how the fund has historically performed. Additionally, the experience and management style of the fund managers are crucial. All of this requires a comprehensive study of data with precision and frequent updation, which can be daunting for an investor to keep up with. So, consult a Qualified Financial Advisor (QFA) when making your mutual fund investment decisions. Let us, the experts, do the heavy lifting for you.
Remember, as a SEBI-Registered Investment Adviser, we do not take commissions for selling mutual funds. Thus, our advice will be unbiased and in your best interest.
Frequently asked questions about mutual funds investing
How do I decide which type of mutual fund to invest in?
Are mutual funds only for experienced investors?
What is the difference between SIP and lumpsum investments?
Is past performance a reliable indicator when choosing mutual funds?
What should I consider when choosing mutual funds?
You can see all the important data that you need to evaluate a mutual fund on a single page. If they are difficult to understand, you can check the 1 Finance Score and Rank to make sense of which funds to choose.
Are 1 Finance Mutual Fund Scoring and Ranking based solely on returns?
Does 1 Finance charge fund companies to rate their funds?
How often should I review mutual funds in my portfolio?
How much tax do you have to pay for buying mutual funds?
Who regulates the mutual fund industry in India?
Disclaimer
The information in the scoring and ranking model is provided solely for general information and educational purposes and shall not constitute any advice or recommendation. Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not an indicator of future returns.