List of Best Mutual Funds for 2018 on Goalwise


Note: We have changed our funds update month from beginning of financial year (April) to beginning of calendar year (January) based on feedback received from our investors last year.

The past year was great for Goalwise selected Mutual Funds and all of our investors got hefty returns on their investments.

Goalwise Equity Mutual Funds notched gains of 38.7% whereas Goalwise Tax Save Funds returned a scorching 41.8% for 2016 against 28.7% of Sensex. (See detailed performance report for 2017 here.)

But we must remember two things:
a) Not all years are going to be this good. In fact, we must always be prepared to see negative years during our investment journey if are investing in Equity Mutual Funds.

b) We need to follow our Mutual Fund selection strategy consistently to get the most out of it. Not following a strategy is as good as not having one.

Accordingly, based on the latest data and our selection strategy, we now have the new list of best Mutual Funds for 2018.

How do we select Mutual Funds

At Goalwise we use a data-driven and rigorously backtested Mutual Fund selection strategy that has given market-beating returns in the past.

We take into account multiple variables like past returns (short, medium and long term), consistency, alpha, size etc to select Mutual Funds that have a strong chance of giving higher returns in the future.

Of course, we won't get all of them right but this is a very important point. Many popular Mutual Fund lists/ratings are just trying to predict the past i.e. they are just shortlists of funds with good past performance and lack any predictive value (such funds might even be past their peak performance for all you know).

We update our recommendations at the beginning of every year where we take the latest Mutual Fund data into account and re-run our predictive algorithms to come up with the best funds for that year. Again, we won't get all of them right, but on average over the long term we should do better.

Best Mutual Funds for 2018

As earlier, the recommended funds list has 18 funds in total - 3 Tax Saver Mutual Funds (ELSS), 9 equity funds and 6 debt funds for different goal types and different risk profiles.

Tax Save (ELSS under section 80C of the IT Act):

Equity:

Risk category: Low (Large Cap funds)

Risk category: Moderate (Multicap funds)

Risk category: High (Multicap + Midcap Funds)

Debt:

Risk Category: Low/Moderate/High

Smarter Savings (substitute for savings account or FD; no exit load):

Emergency Goal (Liquid funds with Instant Redeem option):


Why have so many funds been changed even though they were doing well?

We only recommend the 3-4 best Mutual Funds from hundreds in each category. So even though the returns for many of our existing funds are high, for the new year they are not being continued since they are no longer at the very top of the list.

Many of such funds are still good funds and will still feature in our top 10 list, but they have been edged out from the top 3-4 by better performing funds.

We also allow our investors to choose their own funds while investing but we do not encourage it since we don't know how these funds have been selected and when to replace them since they are already not on the top of our list. So in effect such goals then go out of the purview of our advisory for rebalancing/switching etc.

We have partnered with the following Mutual Fund companies and all of their funds are available with us:

Axis Mutual Funds
Baroda Pioneer Mutual Funds
Birla Sun Life Mutual Funds
Canara Robeco Mutual Funds
DSP Blackrock Mutual Funds
Edelweiss Mutual Funds
Franklin Templeton Mutual Funds
HDFC Mutual Funds
ICICI Prudential Mutual Funds
IDFC Mutual Funds
Invesco Mutual Funds
Kotak Mutual Funds
L&T Mutual Funds
Mirae Mutual Funds
Motilal Oswal Mutual Funds
PPFAS Mutual Funds
Principal Mutual Funds
Reliance Mutual Funds
SBI Mutual Funds
TATA Mutual Funds
UTI Mutual Funds

You can also see this list (and the brokerage we receive from them) on
https://www.goalwise.com/commission

Let us know in the comments if there is some fund that you would like to see here. :)