Top Mutual Fund Investment Plans for 1 Year

Mutual funds provide many investment options for both short-term and long-term investors. Except for ELSS, most schemes of mutual funds do not have a mandatory lock-in period. This flexibility allows investors to potentially benefit from market fluctuations and enter or exit mutual fund schemes with relative ease, which may minimise substantial costs. Consequently, schemes of mutual funds such as Systematic Investment Plans (SIPs) can be considered suitable for a wide range of investors. Here are brief details on the best investment plan for 1 year and the top 10 mutual funds ideal for a one-year investment horizon.

List of Top 10 Mutual Funds for 1 Year

Here is an educational list of the best investment plans for 1 year in the Indian stock market for 2024:

Fund Name	Category	AUM (in Cr)	Expense Ratio (%)	Absolute Returns- 1Y
HDFC Defence Fund	Thematic Fund	4,117.02	0.72	74.34
Motilal Oswal Midcap Fund	Mid Cap Fund	20,055.68	0.58	65.22
LIC MF Infra Fund	Sectoral Fund - Infrastructure	786.09	1.38	65.10
Bandhan Small Cap Fund	Small Cap Fund	8,716.22	0.36	64.64
Mirae Asset NYSE FANG+ETF FoF	FoFs (Overseas)	1,501.63	0.06	63.86
SBI PSU Fund	Thematic Fund	4,471.14	0.72	63.51
Bandhan Infrastructure Fund	Sectoral Fund - Infrastructure	1,776.78	0.81	62.91
Invesco India PSU Equity Fund	Thematic Fund	1,435.71	0.76	62.62
HDFC Pharma and Healthcare Fund	Sectoral Fund - Pharma & Health Care	1,302.67	0.95	61.63
Invesco India Focused Fund	Focused Fund	3,249.98	0.58	60.89

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on the top mutual funds list for 1 year is from 11th November, 2024. This data is derived from the Tickertape Mutual Funds Screener.

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

• Plan: Growth
• Absolute Retuns for 1-Year: Sorted from Highest to Lowest

Best Investment Plan for 1 Year: An Overview

Here is a brief overview of the plans for 1 year listed above:

HDFC Defence Fund

Managed by HDFC Asset Management Company, a prominent player in the Indian financial sector through a joint venture between HDFC and Standard Life Investments, this mutual fund scheme focuses on India’s defence sector. It boasts an impressive CAGR of 72.16%, making it a high-growth choice for investors looking into what are the best mutual funds. The net asset value (NAV) is Rs.21.85.

Motilal Oswal Midcap Fund 

Offered by Motilal Oswal Asset Management Company, a firm with a strong heritage in financial services, this midcap-focused mutual fund scheme presents a CAGR of 33.55%. It’s ideal for investors aiming to tap into mid-sized companies with growth potential. The net asset value (NAV) for this mutual fund scheme is Rs.120.10, and it is one of the top 10 mutual funds to consider.

LIC MF Infra Fund

Established by LIC of India, one of the country’s most trusted financial brands, this fund provides exposure to the infrastructure sector with a CAGR of 29.61%. The net asset value (NAV) is Rs.56.93. This fund can be considered for those seeking to capitalise on India’s infrastructure development and understand what are the best mutual funds in this sector.

Bandhan Small Cap Fund

Launched by Bandhan Mutual Fund House in 2020, this small-cap equity mutual fund scheme targets emerging companies with high-growth potential. With a solid CAGR of 40.93%, it is one of the top 10 mutual funds and an attractive option for growth-focused investors. The net asset value (NAV) Rs. 50.28.

Mirae Asset NYSE FANG+ETF FoF

Operated by Mirae Asset Financial Group, a major player in Asian financial markets, this fund tracks the NYSE FANG+ index, providing exposure to high-performing tech giants. It has delivered a CAGR of 25.75% over 3.5 years, with a net asset value (NAV) of Rs.22.30. This stock is popular among tech-savvy investors exploring what are the best mutual funds and top 10 mutual funds for short-term growth.

SBI PSU Fund

Managed by SBI Funds Management Ltd., in partnership with AMUNDI (France), this mutual fund scheme leverages SBI’s robust banking expertise to focus on India’s public sector. With a CAGR of 26.37%, it appeals to those interested in the stable growth of PSU stocks, further placing it among the top 10 mutual funds to consider. The net asset value (NAV) is Rs.35.10.

Bandhan Infrastructure Fund

Managed by Bandhan AMC, this mutual fund scheme focuses on India’s booming infrastructure sector, boasting a CAGR of 32.18%. With a net asset value (NAV) of Rs.60.58, it’s well-suited for investors seeking long-term exposure to infrastructure growth and evaluating what are the best mutual funds in this category.

Invesco India PSU Equity Fund

Managed by Invesco, a global asset management firm, this fund taps into India’s public sector companies, offering a CAGR of 29.40%. With a net asset value (NAV) of Rs.74.43, it’s positioned for investors looking to diversify with stable PSU investments.

HDFC Pharma and Healthcare Fund

Another well-regarded fund from HDFC Asset Management, this fund is tailored to the healthcare and pharma sectors, achieving a robust CAGR of 59.18% over 1.1 years. The net asset value (NAV) is Rs.16.61.

Invesco India Focused Fund

This fund, also from Invesco, maintains a concentrated portfolio approach to deliver a CAGR of 30.39% over 4.11 years. With a net asset value (NAV) of Rs.29.78, it’s designed for those looking for a focused, high-growth portfolio.

What is the Best Investment Plan for 1 Year?

Short-term funds, like liquid funds, ultra-short-term funds, and low-duration funds, are a type of mutual fund characterised by a brief maturity period typically lasting 1-3 years. These short-term investment plans for 1 year primarily invest in low-risk, high-quality assets, aligning with their goal of generating elevated returns for investors. The fund’s maturity is tied to that of its underlying assets, and being open-ended, investors can enter the market at any juncture.

Wondering what are the best mutual funds for 1-year investments? The best 1 year mutual fund options are those that meet the investment objectives of investors with a limited 1 year investment plan. Below are types of 1 year investment plan in mutual fund options that may suit this horizon:

Types of MFs for 1 Year Investments

Explore six dynamic 1 year investment plan avenues for mutual fund enthusiasts eyeing 1 year investment in share market:

• Liquid Funds: The best 1 year mutual fund options for 2024 are ideal for short-term parking (up to one year). Investors can invest in money market instruments maturing within 90 days. Due to the short holding period, there is minimal price risk, making it an appealing one time investment plan for 1 year with high return.
• Ultra-Short Duration Funds: These funds can gain popularity for their duration-based approach. They allow investors to invest in debt securities maturing in 3-6 months, which suits 1 year investment plans focused on flexibility and safety.
• Low-Duration Funds: Designed for securities maturing in 6-12 months, these funds are ideal for 1 year investment plans. They offer a balanced approach to risk and return, positioning them as solid short-term investment plans for 1 year.
• Money Market Funds: Investors can choose these funds for 1 year investment in share market, focusing on instruments maturing up to one year. These funds are highly liquid and come with low credit risk, making them suitable 1 year investment plan in mutual fund options.
• Floater Funds: Debt funds that allocate at least 65% to floating-rate bonds. These short-term investment plans for 1 year adjust interest rates with market changes, making them a smart choice for periods of rising rates.
• Arbitrage Funds: By leveraging price differentials in cash and derivatives markets, these funds function similarly to debt funds but are classified as hybrids. Arbitrage funds can serve as a reliable 1 year investment plan with high return, perfect for short-term parking up to one year.

Explore these 1 year investment plan options strategically to align with your short-term investment plans for 1 year goals. You can consult a financial advisor for guidance tailored to your financial needs.

How do Mutual Funds for 1 Year Work?

Mutual funds tailored for a one-year investment horizon operate by pooling funds from multiple investors to create a diversified portfolio. These funds, often designed for short-term goals, may typically invest in a mix of fixed-income securities such as Treasury bills, short-term bonds, and money market instruments. The primary objectives of these funds may include capital preservation and generating modest returns within a brief timeframe.

Investors benefit from professional fund management, as skilled portfolio managers make strategic decisions to navigate short-term market fluctuations. The returns generated by these 1 year investment plan with high return options are usually distributed among investors proportionally. It’s vital to remember that the performance of the best 1 year mutual fund investments in 2024 can be impacted by interest rate changes and broader market conditions.

While the best mutual funds in India for 1 year may provide liquidity and expert management, assessing personal financial goals and risk tolerance is crucial before investing. Understanding the fund’s strategy, expenses, and past performance is key to choosing a 1 year investment plan that aligns with individual financial objectives.

Features of Mutual Funds for 1 Year Investments

When considering mutual funds for short-term multiple investment horizons, certain features merit attention.

• Liquidity: Mutual funds offer liquidity, allowing investors to redeem their units at the prevailing Net Asset Value (NAV) after a minimal holding period. This makes them an attractive monthly investment plan for 1 year, as investors can access their money when needed.
• Diversification: Even for short-term investment plans for 1 year, diversification within the best mutual fund to invest for 1 year in India can mitigate risk by spreading investments across various assets. This aspect is essential for those deciding to achieve a balanced risk-return profile.
• Professional Management: Fund managers handle the day-to-day decisions regarding which mutual fund is best for 1 year. Their expertise is crucial in navigating market fluctuations and optimising returns for short-term investment plans for 1 year.
• Low Minimum Investments: Many mutual funds have low minimum investment requirements. This makes them accessible for those looking to invest for a shorter duration.
• Transparent Pricing: The best mutual fund to invest in 2024 for 1 year provides daily NAV updates. This ensures transparent pricing and visibility into the fund’s performance.
• Flexibility: Investors can choose from various types of funds. Such as debt or money market funds. They can thus align with their risk tolerance and return expectations for one year.

Who Should Invest in Mutual Funds for 1 Year Investments?

Investing in the best investment for 1 year is strategic for specific financial goals.

1. Individuals with short-term objectives, such as saving for a down payment or a planned expenditure within the next 12 months, may find these top performing mutual funds in India for 1 year beneficial.
2. Those seeking a moderate level of risk and potential returns, but without the day-to-day market monitoring that direct stock investments require might consider mutual funds for their one-year investment plans.
3. It’s important to note that mutual funds for short-term goals generally involve less market volatility than longer-term investments. This can make them suitable for investors prioritising capital preservation and a more predictable return profile. 

However, as with any investment decision, potential investors should conduct thorough research, assess their risk tolerance, and align their investment strategy with their specific financial objectives before considering mutual funds for one-year investments.

Benefits of Investing in the Best Investment Plan for 1 Year

Short-term mutual funds offer many advantages, making them an attractive option for investors seeking stability and liquidity.

• Reduced Volatility and Lower Risk: Investing in the best mutual funds to invest in 2024 for 1 year protects against high volatility and categorisation as high-risk funds. This is attributed to the low or negligible risk that may be associated with these funds’ underlying assets or instruments. The inherent stability in short-term investments makes them a prudent choice, especially for risk-averse investors prioritising capital preservation.
• Liquidity in Emergencies: One of the primary benefits of the top mutual funds in India for 1 year is their role as a reliable source of liquidity during emergencies. These funds ensure investors can readily access their funds when urgent financial needs arise. This liquidity feature adds a crucial layer of financial security, offering peace of mind to investors who may need quick and flexible access to their investments in unforeseen circumstances.
• Stable Returns in a Short Timeframe: The top performing mutual funds for 1 year stand out for their ability to deliver relatively good and stable returns within a short period. This characteristic particularly appeals to investors seeking quicker returns on their investments without exposing themselves to the prolonged market uncertainties associated with long-term commitments. The predictability of returns in the short term enhances the appeal of these funds for a wide range of investors.
• Diversification Opportunities: Investors in SIP investment plan for 1 year gain the advantage of diversification, a fundamental principle of any mutual fund. These funds expose investors to various debt and money market instruments, allowing investors to spread their risk across different assets. This diversification not only enhances the overall stability of the portfolio but also grants investors access to market segments that might be otherwise challenging for the average investor to navigate.

How to Choose the Best Investment Plan for 1 Year?

Choosing the best 1 year investment plan involves strategic considerations.

• Assess Risk Tolerance: Investors should begin by assessing their risk tolerance level, aligning it with the chosen investment for 1 year risk profile. This step is essential to ensure their financial goals match the fund’s objectives, which could be capital preservation, income generation, or capital appreciation. Evaluating these factors helps identify where to invest money for 1 year in a way that meets personal goals.
• Evaluate Expense Ratio: The expense ratio is a critical factor when selecting the best monthly investment plan for 1 year. This annual cost of managing the fund can affect short-term returns. Lower expense ratios are generally favourable for investment for 1 year, and analysing the historical performance of funds can provide insights into consistency and volatility. However, it’s important to remember that past performance doesn’t guarantee future results.
• Liquidity: Prioritising liquidity is crucial when choosing the best 1 year investment plan. The best stock for 1 year investment or mutual funds with high liquidity make it easier to buy or sell shares, an essential feature for short-term plans. Ensuring a diversified portfolio within these investments can also help reduce the impact of volatility.
• Exit Loads: Investors must consider any exit loads or fees associated with their 1 year savings plan or mutual fund. Understanding these fees and their potential impact on short-term strategies is essential for effective investment for 1 year planning.

What are the Returns on Best Investment Plan for 1 Year & How are they Calculated?

Understanding how mutual fund 1 year returns are calculated is crucial when considering mutual funds for a one-year investment horizon. Returns in mutual funds are primarily derived from the performance of the underlying assets within the fund portfolio.

The most common metric for assessing 1 year mutual fund returns is the Compound Annual Growth Rate (CAGR). CAGR accounts for the compounding effect on investment over time, providing a smoothed annual rate of return. This metric is particularly insightful for gauging the consistency of performance.

On the other hand, total returns encompass not only the capital appreciation but also any dividends or interest earned during the investment period. Investors should carefully review CAGR and total returns to comprehensively view the fund’s performance.

It’s essential to note that short-term investments, such as those with a one-year horizon, may be subject to market volatility. Returns can be influenced by economic conditions, interest rates, and specific market events. Investors should approach one-year mutual fund investments with a clear understanding of the associated risks and align their expectations accordingly. You may want to consult financial experts for personalised advice based on your unique financial goals and risk tolerance.

Taxation on the Best Mutual Funds for 1 Year as per Union Budget 2024-25

The tax treatment of the capital gains earned on mutual fund investments can be divided into long-term and short-term capital gains. The Union Budget 2024-25, delivered by Finance Minister Nirmala Sitharaman, has revised a few regulations surrounding these tax rates. Let’s take a look at the significant changes that may affect the taxation on the best mutual funds for 1 year:

Equity Mutual Funds

• Short-Term Capital Gains Tax: Any gains made when holding equity mutual funds for less than 12 months are considered short-term capital gains. The Union Budget 2024-25 increased the tax rate on these gains to 20%. The STCG tax rate was previously 15%. 
• Long-Term Capital Gains Tax: For equity mutual funds held for over a year, gains are classified as long-term capital gains. The new budget introduces these key changes:

1. Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
2. Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
3. Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.

Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 12 months	15%	20%
Long-Term Capital Gains (LTCG)	More than 12 months	10%	12.50%

Debt Mutual Funds

• Short-Term Capital Gains (STCG): If you sell your debt fund units within a period of 36 months, the gains are classified as short-term capital gains. The STCG will be taxed according to your income tax slab rate.
• Long-Term Capital Gains (LTCG): For debt funds held for a period over 36 months, the gains are classified as long-term capital gains. The new budget outlines a few changes on the LTCG for debt funds, including:

1. Tax Rate: A flat 12.5% tax rate applies to these gains.
2. No Indexation Benefit: The previous benefit of adjusting the purchase price for inflation is removed. Now, the entire gain after three years is taxable at 12.5%.

Capital Gains Tax	Holding Period	Old Rate	New Rate
Short-Term Capital Gains (STCG)	Less than 36 months	Taxed according to your income tax slab	Taxed according to your income tax slab
Long-Term Capital Gains (LTCG)	More than 36 months	10%	12.50%

Risks Involved While Investing in the Best Investment Plan for 1 Year

When considering mutual funds for short-term gains, navigating the potential risks associated with such ventures is essential. Here are key considerations to bear in mind:

• Market Volatility: One of the primary risks in the best one year investment plans is market volatility. The inherent nature of the stock market means that prices can swing dramatically in a short period. For a one-year investment horizon, unforeseen economic events or sudden market shifts can significantly impact returns. Investors should be prepared for fluctuations and carefully assess their risk tolerance before diving into such funds.
• Liquidity Risk: Some short term investment plans for 1 year may face challenges in maintaining high liquidity levels, especially during periods of market stress. If a surge in redemption requests occurs, the fund may struggle to meet them promptly, potentially leading to a dip in returns. Investors should be aware of this liquidity risk and consider it part of their overall risk management strategy.
• Interest Rate Fluctuations: Debt-oriented mutual funds, common choices for short-term investments, are sensitive to changes in interest rates. The returns on these best SIP investments for 1 year may vary in a fluctuating interest rate environment. Investors need to monitor the prevailing interest rate trends, as they can directly impact the fund’s performance over a one-year period.
• Currency Risk (for International Funds): For those considering international funds, currency risk may become a prominent factor. Exchange rate fluctuations can influence returns when converting profits to the investor’s home currency. Political and economic developments in foreign markets can add a layer of unpredictability, underscoring the importance of thorough research before venturing into international short-term funds.

Factors to Consider Before Investing in the Best Investment Plan for 1 Year

Before investing in short term mutual funds in India, consider these crucial factors:

• Define Your Investment Goal: Investors can clearly identify their investment goal. Short-term mutual funds can be the ideal choice if you aim for short-term gains.
• Evaluate Your Risk Profile: Investors can try to understand their risk tolerance by taking an online risk assessment test or consulting with an investment advisor. Investors can then invest in products aligning with their risk profile.
• Understand Tax Implications: Investors should be aware of the tax treatment linked to best short term mutual funds for 1 year. If held for under three years, investors are subject to capital gains tax upon selling or expiration.
• Assess Fund Performance: One-year mutual funds invest in low-risk bonds and easily liquidated securities, potentially offering a lower-risk profile. Investors may expect an average annual return of 4% to 6%, depending on investment location and provider.
• Consider Expense Ratio: The expense ratio, representing the cost per dollar invested, covers management fees and operating expenses. Investors can opt for lower expense ratios to enhance future withdrawals.
• Navigate Entry and Exit Loads: Entry and Exit Loads are fees incurred when buying or selling a 1-year investment plan through a broker. They can range from 0% to 3%. Investors can understand these fees before investing.

To Wrap It Up…

Assessing key financial metrics and related factors while investing in Indian mutual funds for a one-year term can be beneficial. However, it may always be worthwhile to consult a financial advisor and conduct independent research before investing. Remember, past performance doesn’t guarantee future outcomes, and mutual fund investments carry market risks.

Frequently Asked Questions About the Best Mutual Funds for 1 Year

Most Popular Mutual Funds:

As an investor to have a diversified mutual funds portfolio, you might also like to know more about these different types of funds for investing –

Large Cap Mutual Funds	Mutual Fund Bulk Deals	SBI Mutual Funds for SIP	SBI MF for Long Term SIP	Sectoral Mutual Funds	Short Term Mutual Funds	Tax Saving Mutual Funds	Mid Cap Mutual Funds
Small Cap Mutual Funds	Pharma Mutual Funds	80c Mutual Funds	1 Year Mutual Funds	International Mutual Funds	Tata Mutual Funds	Mutual Fund Portfolio	Best Mutual Funds
High Risk Mutual Funds	Micro Cap Mutual Funds	AMCs	MNC Mutual Funds	Equity Mutual Funds	Overnight Funds	ICICI Pru Mutual Funds	HDFC Mutual Funds
Best Investment Plans	Fixed Income Mutual Funds	Penny Stock Mutual Funds	Retirement Mutual Funds	Floater Rate Funds	Aggressive Hybrid Funds	Multi Asset Allocation Funds	Children’s Funds
Medium Duration Funds	Debt Funds	Corporate Bonds	Ultra Short Term Funds	Value Funds	Contra Funds	Focused Funds	Funds of Funds
Money Market Funds	Arbitrage Funds	Gold Mutual Funds	Books on Mutual Funds	Best Mutual Funds for SIP	SBI Mutual Funds	Low Risk Mutual Funds	Dividend Paying Funds
Long Term Mutual Funds	Banking Mutual Funds	Gilt Funds	Mutual Funds for 10 Years	Monthly Income Mutual Funds	Nifty 50 Index Funds	Lumpsum Investment Funds	Blue Chip Mutual Funds
Low Expense Ratio Funds