TOP MUTUAL FUNDS TO INVEST IN DURING 2023

Mutual funds are a popular way for people to invest their money. There are different types of mutual funds to choose from. Picking the best or determining the best mutual fund can be tricky. To find the right mutual fund, consider how much risk you are comfortable with and how long you plan to invest.

But what is risk? Risk arises because we are uncertain about the future. It is the chance of something going wrong or not turning out as expected. In many contexts, risk is associated with the potential for loss or harm. So, when deciding about the level of risk, think of it as a loss potential that you can bear. Simply put, if things go wrong, how worse could these be to make it unbearable?

If your risk tolerance is high, you may opt for funds with the potential for greater rewards. Conversely, those with a low-risk tolerance may find such investments unsuitable due to their preference for reduced uncertainty.

Another crucial consideration is the time frame for your investment. If you’re saving for a distant future need, opting for riskier funds could be acceptable. However, for short-term goals, it’s advisable to choose safer options.

WHAT ARE THE BEST MUTUAL FUNDS?

 

There are different kinds of mutual funds. We can group them based on what they invest in, like Equity Mutual Funds that invest in stocks of companies. Then there are Fixed Income Mutual funds that invest in government securities or corporate bonds or Balanced Mutual Funds that are a mix of both stocks & bonds. These funds differ in how much risk they have and what they aim to achieve.

So, there’s no one-size-fits-all best mutual fund. The best depends on what you want to achieve, how much risk you can handle, and how long you want to invest.

For instance, let’s say you’re saving money for your child’s college in 15 years. Since you’re investing long-term, equity mutual funds could be a good choice. But even in equity funds, there are different types, like large and small companies. You can pick the one that matches how much risk you’re comfortable with. Small companies can be riskier than big ones, which usually do better in tough times.

You might have more than one goal. Investing in equity funds might not be the best idea if you want to buy a car in the next three years. Instead, you could look at fixed-income mutual funds. They aren’t as likely to go up and down a lot and could help you buy that car.

Let’s consider the case of Saba, a 30-year-old professional with a long-term financial goal of buying her dream home in 15 years. She’s diligent about saving and investing, and she understands that her investment choices must align with her goal, risk tolerance, and investment horizon.

Saba was recommended that she consider equity mutual funds for her home-buying goal. These funds have historically shown the potential for higher returns over the long term, making them suitable for her extended investment horizon.

However, she was advised that within the realm of equity mutual funds, there are different categories based on the types of companies they invest in. Saba learned that larger, more established companies tend to be less volatile than smaller ones. Knowing her risk tolerance, she decided to go with large-cap equity mutual funds, which offered a balanced combination of growth potential and stability.

Fast forward 15 years, and Saba’s diligent approach paid off. Her investment in large-cap equity mutual funds significantly contributed to her ability to purchase her dream home, all while providing her with the growth she needed over the years.

JS INVESTMENTS – TOP-PERFORMING MUTUAL FUNDS

1. JS Cash Fund

The Fund offers competitive returns versus prevailing Bank deposit rates and the flexibility to put in or take out your money at your convenience. JSCF is an ideal solution for short-term savings.

Category	Open End -Money Market
Risk Profile	Low

Returns	1 Month	1 Year**	3 Year**	5 Year**
Fund	20.52	18.92	12.59	12.07
Benchmark	22.09	20.02	12.58	11.84

 

2. JS Money Market Fund

The fund aims to provide competitive returns by investing in a low-risk, highly liquid, consisting of a short-duration portfolio of money market instruments.

Category	Risk Profile
Money Market	Very Low

Returns	1 Month	1 Year**	3 Year**	5 Year**
Fund	20.76	n/a	n/a	n/a
Benchmark	22.09	n/a	n/a	n/a

 

3. JS Islamic Daily Dividend Fund

The fund is designed to meet the investors’ liquidity needs by providing daily dividend through investment in Shariah Compliant money market instruments.

Category	Risk Profile
Money Market	Low

Returns	1 Month	1 Year**	3 Year**	5 Year**
Fund	20.13	18.24	11.62	n/a
Benchmark	8.57	6.91	4.78	n/a

 

4. JS Microfinance Sector Fund

The fund aims to enhance by investing in prime quality Microfinance sector products, Microfinance bank deposits and short-term Money Market instruments.

Category	Risk Profile
Money Market	Medium

Returns	1 Month	1 Year**	3 Year**	5 Year**
Fund	23.02	21.12	n/a	n/a
Benchmark	23.07	19.57	n/a	n/a

5. Unit Trust of Pakistan

The fund operates a diverse portfolio of equity and fixed income investments, whereby the equity component provides capital growth. In contrast, dividends on the equity component and the fixed income investments help generate the current income.

Category	Risk Profile
Money Market	High

Returns	1 Month	1 Year**	3 Year**	5 Year**
Fund	-5.05	9.28	5.15	5.83
Benchmark	-3.05	14.80	25.26	37.39

 

6. JS Growth Fund

The fund enables investors to participate in a diversified portfolio of high-quality equity securities aiming to maximize the investment return by prudent investment management.

Category	Risk Profile
Money Market	High

Returns	1 Month	1 Year**	3 Year**	5 Year**
Fund	-7.69	3.72	-11.58	-12.70
Benchmark	-6.23	13.12	18.58	15.35

**July 2023 – Average Annualized Return as per the Morning Star Formula

 

HOW TO SELECT THE TOP-PERFORMING MUTUAL FUNDS IN PAKISTAN

Selecting the best mutual fund for yourself involves careful consideration of your financial goals, risk tolerance, investment horizon, and other factors. Here’s a step-by-step guide to help you choose the right mutual fund:

1. Define Your Financial Goals:Determine what you want to achieve with your investments. Are you saving for retirement, a home purchase, education, or wealth accumulation? Your goals will help guide your investment decisions.
2. Understand Your Risk Tolerance:Consider how comfortable you are with market fluctuations. Some mutual funds carry more risk than others. Assess your risk tolerance to choose funds that align with your comfort level.
3. Identify Your Investment Horizon:Decide how long you plan to invest before accessing your money. Short-term goals may require more conservative funds, while longer-term goals could tolerate more volatility.
4. Expense Ratio:The expense ratio represents the annual cost of managing the fund as a percentage of your investment. Lower expense ratios are generally better as they minimize costs and boost overall returns.
5. Past Performance: While past performance does not guarantee future results, it can provide insight into how a fund has performed over different market conditions. Look for consistent performance over multiple time periods.
6. Fund Manager Expertise:Research the fund manager’s track record and experience. A skilled and experienced manager can positively impact a fund’s performance.

Remember that selecting mutual funds is a personalized process. What works for someone else might not work for you, so tailor your choices to your unique financial situation and objectives.