How to Choose a Mutual Fund in India

Ranking funds by CAGR is a great starting point, but the highest number on a leaderboard is rarely the whole story. Use this checklist to narrow down.

1. Match the category to your goal

Equity funds (large/mid/small cap, flexi cap, ELSS) suit long horizons and higher risk appetite. Debt funds suit shorter horizons and capital preservation. Hybrid funds sit in between.

2. Compare within the same category

A small-cap fund will usually out-CAGR a large-cap fund in a bull market — that does not make it better. Compare a fund only against its peers in the same category.

3. Look at multiple horizons

• 1Y CAGR shows recent momentum but is noisy.
• 3Y and 5Y CAGR show consistency across market cycles.
• 10Y CAGR (where available) shows long-term compounding.

4. Check costs and plan type

Direct plans have lower expense ratios than regular plans and therefore higher net CAGR over time. The figures on this site are based on growth-plan NAV history.