14 Mins

How to Compare Mutual Funds?

A comparative analysis is of great value in selecting the right mutual fund scheme to meet financial goals in the defined time. MF comparison does not mean only looking at the past returns. Of course, returns are one of the measures of comparison but there are several other things that you should take into consideration.

You must perform a mutual funds research and should consider the following parameters to compare mutual funds:

Investment Objective

There are thousands of equity schemes with different investment objectives. Few fund categories under equity are large-cap, mid-caps, small-caps, and multi-caps funds. There are value funds, contra funds, and sectoral fund categories as well. All of them are equity-oriented mutual funds but have different investment objectives.

Likewise, there are many debt mutual fund schemes. When you compare any two or more mutual fund schemes you should know their investment objectives. 

Moreover, the portfolio manager will invest the funds pooled as per the investment objective. Hence it is important that the investor must pick-up the fund that is closer to their financial goals.

Returns Benchmarked With

Every mutual fund is tied to a particular index or benchmark. The benchmark helps in comparing the mutual funds performance over a period of time.

For example, suppose equity mutual fund A is benchmarked to the Nifty 100 total return index. Keeping other parameters the same, for a given period if the index gained 18% and the fund A rises 20% then the fund has out-performed the index.

Whereas, if the index falls by 10% and the fund A goes down by 12% then fund A has under-performed for the given period.

Select the mutual fund scheme that has given consistently higher returns than its benchmarked index.

Risk Type

Not all equity mutual funds are equal in risk. Small-cap equity mutual funds have more risk in comparison to large-cap mutual funds. The varying degree of riskiness of a particular mutual fund is due to the underlying investments it does.

You should compare mutual funds on the basis of their risk and pick the mutual fund scheme that matches your risk-taking capacity.

Years in Existence

Mutual funds having a fairly long existence have seen all types of market cycles/ fluctuations. They have business experience and have grown over time in assets (AUM). Such mutual funds are from stable asset management companies (AMC) or fund houses.

So, you need to consider the number of years of mutual fund existence and their track record while comparing mutual funds.

Exit Loads and Expense Ratio

Expense ratio and exit load are charges you pay to a fund house for mutual fund investments. The loads cover the management, redemption, and mutual fund administration expenses.

A mutual fund with a lower exit load and expense ratio is preferred. However, a mutual fund with a lower expense ratio does not mean that the fund is generating higher returns for you.

You should select a mutual fund that has higher returns even if it is charging slightly higher loads.


Historical returns are a good indicator to study the mutual funds performance across different market cycles. One can estimate the potential returns from their SIP or lumpsum investments. They can use a mutual fund calculator to estimate returns. Scripbox’s SIP calculator can help estimate SIP returns and a lumpsum calculator for lumpsum investments. Investors can also compare funds based on their SIP return to select the fund to invest. Hence the returns calculator can help investors to compare mutual funds and their performance.

Regular vs Direct Investment

Investors who wish to directly deal with individual fund houses rather than intermediaries should consider investing through direct plans. Above all, investors with the capacity and knowledge to study mutual funds by doing their own research can invest in direct funds. Regular plans are those mutual fund plans that are bought through an intermediary. These intermediaries can be brokers, advisors, or distributors. The intermediaries charge the fund house a certain fee for selling their mutual funds. The AMCs usually recover this fee through expense ratio. The expense ratio for regular mutual funds is slightly higher than direct mutual funds.

Why Should You Compare Mutual Funds?

There are 8000+ mutual fund schemes in India. Picking up the right mutual fund matching your financial goals, investment horizon, and risk-taking capacity is a huge task.

Moreover, mutual funds from a particular category look quite similar. This can confuse you. You could possibly choose the wrong mutual fund scheme. When you compare mutual funds, it helps you find the differences between them.

Mutual fund comparison will help you understand about the riskiness, investment objectives, consistency of returns, years in existence, and the quality of the fund.

All these factors help you in selecting the best mutual fund scheme for your investment needs.

How to Compare Equity Mutual Funds

The equity mutual funds invest a major portion of the portfolio in equity and equity-related instruments in various proportions. The proportions are based on the fund’s investment objectives.

The equity mutual funds scheme is suited for aggressive investors that have the capacity to take higher risk.

The equity mutuals are helpful in creating long-term wealth because they are a high-risk high return investment. 

Compare a few top performing mutual funds. Below is a detailed explanation

Explore: Best Equity Mutual Funds

ParticularsInvesco India Growth Opportunities Fund (G)Mirae Asset Large Cap Fund (G)AXIS Bluechip Fund (G)
Investment ObjectiveProvide long-term capital appreciation/ income by investing predominantly in a diversified portfolio consisting of equity and equity-related securities large-cap companiesTo generate long-term capital appreciation by capitalizing on potential investment opportunities by predominantly investing in equities of large-cap companiesTo provide long-term capital appreciation/ income by investing predominantly in a diversified portfolio predominantly consisting of equity and equity-related securities large-cap companies including derivatives
Managed byInvesco Asset Management Company Pvt LtdMirae Asset Global Investment Management (India) Private LimitedAxis Asset Management Company Ltd
Asset Class typeEquity, DiversifiedEquity-OrientedEquity, Large Cap
Benchmarked toBSE 100 India Total Return IndexNifty 100 Total Return IndexNifty 50 Total Return Index
Risk TypeModerately High RiskHigh RiskModerately High Risk
Inception Date08.09.200704.04.200801.05.2010
The first minimum investment amount Rs. 1000 ora SIP of Rs. 500Rs. 5000 ora SIP of Rs. 1000Rs. 5000 ora SIP of Rs. 1000
AUMRs. 2,498.42 CroresRs. 15,896.69 CroresRs.11,823.95 Crores
Asset AllocationEquity- 96%Others- 4%Equity – 97.84%Others – 2.16%Equity- 82%Others- 18%
Exit Load1% on or before 1 year1% on or before 1 year (365 days)1% on or before 1 year

Compare Tax Saving Mutual Funds

The tax saving mutual funds are no different than any other mutual fund with the only difference of having a tax benefit and a lock-in period. The amount invested is allowed as a deduction up to Rs 1.5 lakh under section 80C of the Income Tax Act, 1961.

The mutual fund portfolio is majorly equity-oriented and the lock-in period for tax saving mutual funds is 3 years. The tax saving mutual funds are also known as Equity-Linked Mutual Funds ELSS. In case the investment is made through SIP, the lock-in period is calculated for every installment of investment.

The benefits of investing in a tax saving mutual fund or ELSS are listed below:

  • ELSS allows an investor to save taxes as well as the benefit of the growth and returns from the underlying assets provided in the ELSS mutual fund portfolio. Where other tax-saving schemes like PPF, NSC, Fixed Deposit, etc provide an average of 8% returns on investment, ELSS provides a better return being a diversified portfolio.
  • An investor can invest as low as Rs 500 in ELSS, turning an investor’s small savings into an investment. This helps build a habit of continuous saving.
  • The tax benefit an equity-linked mutual fund carries makes it more attractive for investors. Other mutual funds such as debt-oriented mutual funds, liquid funds, do not provide a tax benefit to its investors. The amount invested is allowed as a deduction up to Rs 1.5 lakh, the capital gain earned on maturity is exempt up to Rs 1 lakh.
Below is the comparison of few top performing funds
ParticularsMirae Asset Tax Saver Fund (G)Motilal Oswal Long Term Equity Fund (G)
Investment ObjectiveTo provide long-term wealth creation and tax saving by investing a diversified portfolio of equity and equity equivalent instruments.To generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related instruments.
Managed byMirae Asset Investment Managers (India) Private LimitedMotilal Oswal Asset Management Company Limited
Asset Class typeEquity, Tax-savingEquity
Benchmarked toNifty 200 Total Return IndexNIFTY 500 Total Return Index (TRI)
Risk TypeModerately High RiskModerately High Risk
Inception Date28.12.201521.01.2015
The first minimum investment amountRs. 1000 ora SIP of Rs. 1000Rs. 1000 ora SIP of Rs. 1000
AUMRs.3,281.58 CroresRs. 1,584.31 Crores
Asset AllocationEquity- 99%
Others- 1%
Debt – 96.97%
Others – 3.03%

Explore: Best Tax Saving Funds

Compare Debt Mutual Funds

The debt mutual funds invest a major portion of the pooled funds in debt and money market instruments having specified maturities.

Examples of underlying debt and money market instruments are;

  • Corporate bonds
  • Debentures
  • Government securities
  • T-bills
  • Commercial papers (CP’s)
  • Certificate of deposits (CD’s)

A Debt mutual fund investment is best for risk-averse or short-term investors who prefer capital protection over fund appreciation. Debt funds do not have wide market fluctuations like equity markets. However, there is an element of default or credit risk in debt mutual funds. Hence investors have to ensure that the portfolio has more of AAA and AA rated securities to minimize credit risk.

The debt mutual funds are better suited for short to medium-term life goals like creating a corpus of emergency funds, funds for the wedding, buying a dream car or retiring debt. 

Below is the comparison of few top performing funds
ParticularsTata Liquid Fund (G)Kotak Savings Fund (G)ICICI Pru Savings Fund (G)
Investment ObjectiveTo generate reasonable returns with high liquidity to the unitholders.To generate returns through investments in debt and money market instruments (MMI) with a view to reduce the interest rate risk.To generate income through investments in a range of debt and money market instruments while maintaining the optimum balance of yield, safety, and liquidity.
Managed byTata Asset Management LimitedKotak Mahindra Asset Management Company LimitedICICI Prudential Asset Management Company Limited
Asset Class typeDebtDebtDebt
Benchmarked toCrisil Liquid Fund IndexNIFTY Ultra Short Duration Debt IndexNIFTY Low Duration Debt Index
Risk TypeLow RiskModerately Low RiskModerately Low Risk
Inception Date01.09.200413.08.200427.09.2002
The first minimum investment amountRs. 5000 or
a SIP of Rs. 1000
Rs. 5000 or
a SIP of Rs. 1000
Rs. 100 or
a SIP of Rs. 1000
Yield to Maturity5.32%6.1%6.53%
AUMRs. 21,439.46 CroresRs. 11,280.56 CroresRs. 19,394.59 Crores
Asset AllocationDebt – 96.47%
Others – 3.53%
Debt – 96.78%
Others – 3.22%
Debt – 96.51%
Others – 3.49%
Exit LoadDay 1 – 0.007%, daily decreasing 0.0005% such that on day 6 the exit load is 0.0045%.From day 7 – NILNILNIL

Explore: Best Debt Mutual Funds

Comparison of Liquid Funds

As per the SEBI categorization of mutual fund schemes, the liquid mutual fund invests in securities that have a specific maturity of up to 91 days only. Liquid funds primarily belong to the debt category of mutual funds.

The investment objective of the liquid mutual fund is to create a highly liquid corpus of emergency funds. Thus you can use liquid funds for creating a corpus of funds for financial goals like emergency funds for paying education fees, medical emergency or income support in case of job loss.

Liquid Mutual Funds offer a lower return in comparison to equity or hybrid mutual funds that carry a high risk. Thus, liquid funds are a low risk and low return investment option, best for the risk-averse, short-term investors. 

Below is the comparison of few top performing funds 
ParticularsAxis Liquid Fund (G)Tata Liquid Fund (G)
Investment ObjectiveTo provide a high level of liquidity with reasonable returns commensurate with low risk through a portfolio of money market and debt securities.To generate reasonable returns with high liquidity to the unitholders.
Managed byAxis Asset Management Company Ltd.Tata Asset Management Limited
Asset Class typeDebtDebt
Benchmarked toNifty Liquid Fund IndexCrisil Liquid Fund Index
Risk TypeLow RiskLow Risk
Inception Date09.10.200901.09.2004
The first minimum investment amountRs. 500 orA SIP of Rs. 1000Rs. 5000 ora SIP of Rs. 1000
Yield to Maturity5.29%5.32%
AUMRs. 30,067.86 CroresRs. 21,439.46 Crores
Asset AllocationDebt – 99.42%Others – 0.58%Debt – 96.47%Others – 3.53%
Exit LoadDay 1 – 0.007%, daily decreasing 0.0005% such that on day 6 the exit load is 0.0045%.From day 7 – NILDay 1 – 0.007%, daily decreasing 0.0005% such that on day 6 the exit load is 0.0045%.From day 7 – NIL

Which is the best mutual fund to invest in 2022?

Mutual funds are investment vehicles that pool money from investors with similar objectives and invest them in a portfolio decided by an expert fund manager. There are multiple categories and types of mutual funds. They are equity funds, debt funds and hybrid funds. Equity funds invest in equity and equity-related investments. They best suit investors with a long term investment horizon. Debt mutual funds invest in debt and government securities and suit investors with a short term horizon. Hybrid mutual funds invest in debt and equity securities best suit investors with a medium-term horizon. The returns from all these funds vary too and are dependent on either the market conditions or the portfolio of the investment.

What suits one investor might not suit another investor. Hence there are no best mutual funds to invest in. Investors need to decide on which funds to invest based on their investment objectives. There are more than 500 plus funds in the market, and it might be difficult for investors to choose the ones that best suit their requirements. Hence investors can narrow down the category and type of mutual funds they want to invest in. Then invest the top performers in each category. Scripbox is a platform that ranks mutual funds based on their proprietary algorithm. Investors can invest in the best mutual funds based on their goals and investment objectives.

What is the best website for mutual funds?

There are multiple platforms available to investors to invest in mutual funds. Investors can choose either the direct route or the regular route to invest in mutual funds. Through the direct route, one can manage their own mutual fund’s portfolio. However, through the regular route, platforms such as Scripbox will manage an investor’s portfolio and monitor it continuously.

Scripbox allows investors to invest based on their goals. Scripbox understands investors goals in terms of investment horizon, age of investor, and other factors. Their proprietary algorithm ranks mutual funds based on return, risk and other factors and suggests the best funds to investors. They also perform portfolio scans periodically to monitor the investments in terms of goals. Investors can also track their progress on the website.

It also offers tax optimized withdrawals so that investors can reduce their long term capital gains tax. Scripbox also assists in generating capital gains tax statements for filing income tax returns. Moreover, they offer tools to automate investments. Scripbox offers all these services at zero fees.


Mutual funds performance comparison helps you assess the quantitative and qualitative parameters of mutual funds. This is of great importance to ensure that your investments are in line with your investment objectives. To compare mutual funds you should know which criteria fulfill your investment objective and then compare these funds. You must also consider the choice of lumpsum investment vs a Mutual Fund SIP while considering an investment plan. Both the investment plans have their own pros and cons. Click here to know more about Best SIP Mutual Funds to invest in 2022.

MF comparison helps you with better fund selection. You do not blindly rely on returns only for picking up a mutual fund for your investment needs.

Frequently Asked Questions

Which benchmark is best for mutual funds?

The benchmark for a mutual fund varies based on its category. In other words, different mutual funds have different benchmarks based on the category of fund. The benchmark returns indicate how much a fund earned against how much it should have earned. For example, an XYZ mutual fund is a diversified equity mutual fund, with Sensex as its benchmark. The performance of the XYZ fund is comparable to the performance of the Sensex.

While shortlisting a mutual fund to invest in, the fund’s outperformance against its benchmark is an important criterion. It is also wise to check the historical performance of the fund against its benchmark. This gives a fair idea about the fund’s performance across different market cycles and the fund manager’s investment decisions.

Therefore, every fund has a benchmark against which its performance can be compared. If a fund beats its benchmark, then it can be considered for investment.