The below table shows a list Of the Best Monthly Income Mutual Funds Based on AUM, NAV and minimum SIP.
| Name | AUM (Cr) | NAV (Rs) | Minimum SIP (Rs) |
| HDFC Balanced Advantage Fund | 95,391.46 | 550.56 | 100 |
| Parag Parikh Flexi Cap Fund | 78,490.29 | 88.71 | 1000 |
| HDFC Mid-Cap Opportunities Fund | 75,382.30 | 211.29 | 100 |
| SBI Equity Hybrid Fund | 73,405.39 | 316.57 | 500 |
| SBI Liquid Fund | 67,570.48 | 3,907.84 | 500 |
| HDFC Liquid Fund | 64,247.80 | 4,906.45 | 100 |
| HDFC Flexi Cap Fund | 63,436.49 | 2,121.14 | 100 |
| ICICI Pru Bluechip Fund | 62,717.11 | 122.55 | 500 |
| ICICI Pru Balanced Advantage Fund | 61,103.40 | 79.29 | 100 |
| Nippon India Small Cap Fund | 60,372.55 | 202.2 | 100 |
Introduction to Monthly Income Mutual Funds in India
HDFC Balanced Advantage Fund
HDFC Balanced Advantage Fund Direct Plan-Growth is a Dynamic Asset Allocation mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
HDFC Balanced Advantage Fund as a Monthly Income Mutual Fund, manages assets valued at ₹95391.46 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 22.37%. This fund has an exit load of 1% and an expense ratio of 0.72%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 49.98%, Debt – 29.23% and Other – 20.72%.
Parag Parikh Flexi Cap Fund
Parag Parikh Flexi Cap Fund Direct-Growth is a Flexi Cap mutual fund scheme from Ppfas Mutual Fund. This fund has been in existence for 11 years and 4 months, having been launched on 13/05/2013.
Parag Parikh Flexi Cap Fund as a Monthly Income Mutual Fund, manages assets valued at ₹78490.29 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 27.52%. This fund has an exit load of 2% and an expense ratio of 0.63%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 82.41%, Debt – 17.21% and Other – 0.38%.
HDFC Mid-Cap Opportunities Fund
HDFC Mid-Cap Opportunities Direct Plan-Growth is a Mid-Cap mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
HDFC Mid-Cap Opportunities Fund as a Monthly Income Mutual Fund, manages assets valued at ₹75382.30 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.14%. This fund has an exit load of 1% and an expense ratio of 0.72%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 92.13%, No Debt and Other – 7.87%.
SBI Equity Hybrid Fund
SBI Equity Hybrid Fund Direct Plan-Growth is an Aggressive Hybrid mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
SBI Equity Hybrid Fund as a Monthly Income Mutual Fund, manages assets valued at ₹73405.39 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 16.82%. This fund has an exit load of 1% and an expense ratio of 0.73%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 72.64%, Debt – 21.2% and Other – 6.16%.
SBI Liquid Fund
SBI Liquid Fund Direct Plan-Growth is a Liquid mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
SBI Liquid Fund as a Monthly Income Mutual Fund, manages assets valued at ₹67570.48 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.29%. This fund has an exit load of 0.01% and an expense ratio of 0.19%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises No Equity, Debt – 108.04% and Other – (-)8.04%.
HDFC Liquid Fund
HDFC Liquid Direct Plan-Growth is a Liquid mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
HDFC Liquid Fund as a Monthly Income Mutual Fund, manages assets valued at ₹64247.80 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.27%. This fund has an exit load of 0.01% and an expense ratio of 0.2%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises No Equity, Debt – 107.89% and Other – (-)7.89%.
HDFC Flexi Cap Fund
HDFC Flexi Cap Direct Plan-Growth is a Flexi Cap mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
HDFC Flexi Cap Fund as a Monthly Income Mutual Fund, manages assets valued at ₹63436.49 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 25.78%. This fund has an exit load of 1% and an expense ratio of 0.76%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 86.49%, Debt – 0.64% and Other – 12.86%.
ICICI Pru Bluechip Fund
ICICI Prudential Bluechip Fund Direct-Growth is a Large-cap mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
ICICI Pru Bluechip Fund as a Monthly Income Mutual Fund, manages assets valued at ₹62717.11 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 22.66%. This fund has an exit load of 1% and an expense ratio of 0.87%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 91.5%, Debt – 0.39% and Other – 8.11%.
ICICI Pru Balanced Advantage Fund
ICICI Prudential Balanced Advantage Direct-Growth is a Dynamic Asset Allocation mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
ICICI Pru Balanced Advantage Fund as a Monthly Income Mutual Fund, manages assets valued at ₹61103.40 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 15.35%. This fund has an exit load of 1% and an expense ratio of 0.85%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 49.58%, Debt – 18.63% and Other – 31.79%.
Nippon India Small Cap Fund
Nippon India Small Cap Fund Direct-Growth is a Small Cap mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
Nippon India Small Cap Fund as a Monthly Income Mutual Fund, manages assets valued at ₹60372.55 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 38.46%. This fund has an exit load of 1% and an expense ratio of 0.65%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity – 95.99%, No Debt and Other – 4.01%.
What Is A Monthly Income Mutual Fund?
A Monthly Income Mutual Fund (MIMF) is designed to provide regular income to investors through systematic monthly payouts. These funds primarily invest in fixed-income securities like bonds and government securities, aiming for stable returns while managing risk effectively.
The primary objective of MIMFs is to generate consistent cash flow, making them appealing to retirees or those seeking supplementary income. Investors benefit from professional management and diversification, reducing the risk associated with individual securities while ensuring liquidity through mutual fund structures.
While MIMFs offer regular income, they may not guarantee capital appreciation. Investors should consider factors like expense ratios, credit quality of underlying assets and their risk tolerance before investing. Understanding these elements helps in making informed investment decisions.
Features of the Best Monthly Income Mutual Fund
The main features of the best Monthly Income Mutual Funds include a strong track record of performance, professional management, diversification of assets and a transparent investment approach. These elements collectively enhance income stability and help manage risks effectively for investors seeking regular payouts.
- Strong Track Record: Look for funds with consistent historical performance over multiple market cycles. A reliable track record indicates effective management and the ability to generate steady income, which is crucial for long-term investors seeking stability.
- Professional Management: The expertise of fund managers plays a vital role in navigating market fluctuations. Experienced managers can optimize asset allocation and make informed investment decisions, enhancing the fund’s potential to deliver regular income while minimizing risks.
- Diversification of Assets: A well-diversified portfolio across various fixed-income securities helps mitigate risk. By spreading investments across bonds, government securities and other assets, MIMFs can reduce the impact of any single asset’s poor performance on overall returns.
- Transparent Investment Approach: The best MIMFs provide clear information about their investment strategies, fees and underlying assets. Transparency builds investor trust and enables informed decision-making, ensuring that investors understand where their money is being allocated and how it performs.
Top Monthly Income Mutual Funds In India Based on Expense Ratio
The table below shows the Best-performing Monthly Income Mutual Funds Based on the highest to lowest expense ratio.
| Name | Expense Ratio (%) | Minimum SIP (Rs) |
| ICICI Pru Value Discovery Fund | 0.98 | 100 |
| ICICI Pru Bluechip Fund | 0.87 | 500 |
| ICICI Pru Balanced Advantage Fund | 0.85 | 100 |
| SBI BlueChip Fund | 0.8 | 500 |
| HDFC Flexi Cap Fund | 0.76 | 100 |
| SBI Equity Hybrid Fund | 0.73 | 500 |
| HDFC Balanced Advantage Fund | 0.72 | 100 |
| HDFC Mid-Cap Opportunities Fund | 0.72 | 100 |
| ICICI Pru Multi-Asset Fund | 0.72 | 500 |
| Nippon India Small Cap Fund | 0.65 | 100 |
Best Monthly Income Mutual Funds To Invest In Based on 3Y CAGR
The table below shows the Best Monthly Income Mutual Funds Based on the Highest 3Y CAGR.
| Name | CAGR 3Y (Cr) | Minimum SIP (Rs) |
| Nippon India Small Cap Fund | 32.69 | 100 |
| HDFC Mid-Cap Opportunities Fund | 30.08 | 100 |
| HDFC Flexi Cap Fund | 28.03 | 100 |
| ICICI Pru Value Discovery Fund | 27.06 | 100 |
| Kotak Emerging Equity Fund | 26.27 | 100 |
| HDFC Balanced Advantage Fund | 24.51 | 100 |
| ICICI Pru Multi-Asset Fund | 23.2 | 500 |
| ICICI Pru Bluechip Fund | 21.29 | 500 |
| Parag Parikh Flexi Cap Fund | 19.36 | 1000 |
| Kotak Flexicap Fund | 18.2 | 100 |
Monthly Income Mutual Fund List Based on Exit Load
The table below shows Best Performing Monthly Income Mutual Funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.
| Name | AMC | Exit Load (%) |
| Parag Parikh Flexi Cap Fund | PPFAS Asset Management Pvt. Ltd. | 2 |
| Nippon India Small Cap Fund | Nippon Life India Asset Management Limited | 1 |
| HDFC Mid-Cap Opportunities Fund | HDFC Asset Management Company Limited | 1 |
| HDFC Flexi Cap Fund | HDFC Asset Management Company Limited | 1 |
| ICICI Pru Value Discovery Fund | ICICI Prudential Asset Management Company Limited | 1 |
| Kotak Emerging Equity Fund | Kotak Mahindra Asset Management Company Limited | 1 |
| HDFC Balanced Advantage Fund | HDFC Asset Management Company Limited | 1 |
| ICICI Pru Multi-Asset Fund | ICICI Prudential Asset Management Company Limited | 1 |
| ICICI Pru Bluechip Fund | ICICI Prudential Asset Management Company Limited | 1 |
| Kotak Flexicap Fund | Kotak Mahindra Asset Management Company Limited | 1 |
Monthly Income Mutual Funds Returns
The table below shows Monthly Income Mutual Funds Returns Based on 1Y return.
| Name | Absolute Returns – 1Y (%) | Minimum SIP (Rs) |
| Kotak Emerging Equity Fund | 49.64 | 100 |
| Nippon India Small Cap Fund | 49.46 | 100 |
| HDFC Mid-Cap Opportunities Fund | 47.74 | 100 |
| HDFC Flexi Cap Fund | 45 | 100 |
| ICICI Pru Value Discovery Fund | 43.8 | 100 |
| ICICI Pru Bluechip Fund | 41.15 | 500 |
| Parag Parikh Flexi Cap Fund | 40.07 | 1000 |
| Kotak Flexicap Fund | 36.88 | 100 |
| Mirae Asset Large & Midcap Fund | 36.63 | 500 |
| HDFC Balanced Advantage Fund | 34.5 | 100 |
Historical Performance of Monthly Income Mutual Funds
The table below shows the Historical Performance Of Monthly Income Mutual Funds based on 5Y return
| Name | CAGR 5Y (Cr) | Minimum SIP (Rs) |
| Nippon India Small Cap Fund | 38.46 | 100 |
| HDFC Mid-Cap Opportunities Fund | 31.14 | 100 |
| Kotak Emerging Equity Fund | 30.52 | 100 |
| ICICI Pru Value Discovery Fund | 28.45 | 100 |
| Parag Parikh Flexi Cap Fund | 27.52 | 1000 |
| HDFC Flexi Cap Fund | 25.78 | 100 |
| Mirae Asset Large & Midcap Fund | 25.01 | 500 |
| ICICI Pru Multi-Asset Fund | 23.01 | 500 |
| ICICI Pru Bluechip Fund | 22.66 | 500 |
| HDFC Balanced Advantage Fund | 22.37 | 100 |
Factors to Consider When Investing in Monthly Income Mutual Funds
The main factors to consider when investing in Monthly Income Mutual Funds include your financial goals, risk tolerance, fund expenses and the manager’s experience. Evaluating these elements can help ensure that your investment aligns with your income needs and overall financial strategy.
- Financial Goals: Clearly define your investment objectives, such as generating regular income for living expenses or funding specific future needs. Understanding your goals helps you select a fund that aligns with your cash flow requirements and investment timeline.
- Risk Tolerance: Assess your comfort level with market fluctuations and potential losses. Monthly Income Mutual Funds can vary in risk depending on their underlying assets; knowing your risk tolerance will guide you in choosing a suitable fund that meets your expectations.
- Fund Expenses: Analyze the expense ratios and fees associated with the fund. High costs can erode returns over time, so selecting funds with competitive expenses is essential for maximizing your income and ensuring long-term profitability.
- Manager’s Experience: Research the fund manager’s track record and experience in managing similar funds. An experienced manager can navigate market challenges effectively and make informed investment decisions, significantly impacting the fund’s performance and income stability.
How to Invest in Top Monthly Income Mutual Funds?
Investing in top Monthly Income Mutual Funds (MIMFs) begins with research. Evaluate various funds based on their historical performance, expense ratios and portfolio composition. Look for funds managed by reputable firms with a track record of consistent income generation.
Next, consider your financial goals and risk tolerance. MIMFs typically appeal to those seeking regular income, so ensure that your investment aligns with your cash flow needs. Create a diversified portfolio by allocating funds across different MIMFs to mitigate risk.
Finally, choose Alice Blue, as a mutual fund distributor or online broker. Complete the necessary documentation, including KYC compliance and invest through a lump sum or systematic investment plan (SIP). Monitor your investments regularly to adjust your strategy as needed.
Impact of Market Trends on Top Monthly Income Mutual Funds
Market trends significantly influence Monthly Income Mutual Funds (MIMFs) due to their reliance on fixed-income securities. Rising interest rates typically decrease bond prices, potentially reducing income payouts. Conversely, falling rates can enhance returns, making MIMFs more attractive to income-focused investors.
Economic conditions also play a crucial role. Inflationary pressures may erode real returns, prompting investors to reassess their allocations. Additionally, market sentiment can affect investor confidence in MIMFs, influencing inflows and overall performance, underscoring the importance of staying informed about market dynamics.
How Monthly Income Mutual Funds Perform in Volatile Markets?
In volatile markets, Monthly Income Mutual Funds (MIMFs) often exhibit resilience due to their focus on fixed-income securities. While they may experience fluctuations in value, their primary goal of providing regular income can help cushion investors against market turbulence.
However, rising interest rates during volatility can lead to decreased bond prices, impacting returns. MIMFs may need to adjust their portfolios to maintain income levels and investors should be prepared for potential short-term variations in payouts. Monitoring fund management strategies becomes essential during such periods.
Advantages of Investing in Monthly Income Mutual Funds
The main advantages of investing in Monthly Income Mutual Funds include regular income generation, professional management, diversification benefits and liquidity. These features make MIMFs appealing to investors seeking a stable cash flow while balancing risk and returns effectively.
- Regular Income Generation: MIMFs provide consistent monthly payouts, making them ideal for retirees or those needing supplementary income. This predictability allows investors to plan their finances more effectively, ensuring they can meet essential expenses without relying solely on savings.
- Professional Management: These funds are managed by experienced professionals who analyze market trends and select high-quality fixed-income securities. This expertise helps optimize returns while managing risks, providing investors with peace of mind knowing their money is in capable hands.
- Diversification Benefits: MIMFs typically invest in a range of fixed-income securities, reducing exposure to any single asset’s risk. This diversification minimizes potential losses and enhances stability, making them a safer investment option in fluctuating market conditions.
- Liquidity: Unlike traditional fixed-income investments, MIMFs offer liquidity, allowing investors to redeem their units as needed. This flexibility ensures that cash is accessible without substantial penalties, catering to both income needs and emergency financial situations.
Risks of Investing in Monthly Income Mutual Funds
The main risks of investing in Monthly Income Mutual Funds include interest rate risk, credit risk, market volatility and potential inflation impact. Understanding these risks is essential for investors to make informed decisions and manage their portfolios effectively.
- Interest Rate Risk: MIMFs are sensitive to interest rate changes; rising rates can decrease the value of existing bonds. This may lead to lower returns or reduced payouts, impacting the expected income for investors relying on regular cash flow.
- Credit Risk: Investing in lower-rated securities can expose MIMFs to credit risk, where issuers may default on payments. A decline in credit quality can adversely affect fund performance, resulting in potential losses and reduced income for investors.
- Market Volatility: Although MIMFs primarily invest in fixed-income assets, they are not immune to market fluctuations. Economic downturns or shifts in investor sentiment can affect fund valuations, potentially leading to short-term volatility in income and capital value.
- Inflation Impact: Rising inflation can erode the purchasing power of the income generated by MIMFs. If returns do not keep pace with inflation, investors may find their real income diminished, reducing the effectiveness of their investment strategy over time.
Contribution of Monthly Income Mutual Funds to Portfolio Diversification
Monthly Income Mutual Funds (MIMFs) contribute significantly to portfolio diversification by providing exposure to fixed-income securities, which typically have a lower correlation with equities. This balance can reduce overall portfolio volatility, making it a stable component for risk-averse investors seeking regular income.
Additionally, MIMFs can enhance income generation without compromising on liquidity. By including MIMFs, investors can achieve a blend of growth and stability, allowing them to navigate various market conditions. This diversification strategy is particularly beneficial for those nearing retirement or seeking consistent cash flow.
Who Should Invest in Monthly Income Mutual Funds?
Monthly Income Mutual Funds (MIMFs) are ideal for retirees or individuals seeking regular income streams to support living expenses. These funds appeal to conservative investors who prioritize capital preservation while desiring stable, predictable cash flow without taking on excessive risk.
Additionally, MIMFs suit those with short- to medium-term financial goals, such as funding education or purchasing a home. Investors who appreciate professional management and diversification can benefit from MIMFs, allowing them to balance income needs with a relatively low-risk investment approach.
Impact of Fund Manager Expertise on Monthly Income Mutual Funds Performance
The expertise of a fund manager significantly influences the performance of Monthly Income Mutual Funds (MIMFs). Skilled managers can navigate market fluctuations effectively, selecting high-quality fixed-income securities that optimize returns while managing risk, ultimately enhancing income stability for investors.
Additionally, experienced fund managers employ strategic asset allocation and timely adjustments to portfolios, which can improve overall performance in varying economic conditions. Their ability to analyze market trends and make informed decisions helps ensure that MIMFs continue to meet income objectives, benefiting investors over time.
How Much Money Should I Invest In Monthly Income Mutual Funds?
The amount to invest in Monthly Income Mutual Funds (MIMFs) depends on individual financial goals and cash flow needs. A general guideline is to allocate a portion of your overall portfolio—typically 10-30%—to ensure adequate diversification while securing regular income.
Consider factors such as your risk tolerance, investment horizon and other income sources. If relying on MIMFs for essential expenses, a larger investment may be appropriate. Regularly review and adjust your allocation based on changing financial circumstances and market conditions to maintain alignment with your goals.
Taxation On Monthly Income Mutual Funds
Taxation on Monthly Income Mutual Funds (MIMFs) depends on the type of underlying assets. If the fund invests primarily in equity, long-term capital gains are taxed at 10% for gains exceeding ₹1 lakh. Short-term gains are taxed at 15%.
For MIMFs focused on debt securities, interest income is taxed as per the investor’s income tax slab. Long-term capital gains from debt funds, held over three years, are taxed at 20% with indexation benefits. Understanding these tax implications is crucial for effective financial planning.
Monthly Income Mutual Funds – FAQ
Monthly Income Mutual Funds (MIMFs) are investment vehicles designed to provide regular income through monthly payouts. Primarily investing in fixed-income securities like bonds, they aim to deliver stable returns while managing risk, making them suitable for income-focused investors.
Top Monthly Income Mutual Funds #1: HDFC Balanced Advantage Fund
Top Monthly Income Mutual Funds #2: Parag Parikh Flexi Cap Fund
Top Monthly Income Mutual Funds #3: HDFC Mid-Cap Opportunities Fund
Top Monthly Income Mutual Funds #4: SBI Equity Hybrid Fund
Top Monthly Income Mutual Funds #5: SBI Liquid Fund
These funds are listed based on the Highest AUM.
The best Monthly Income Mutual Funds based on expense ratio include ICICI Pru Value Discovery Fund, ICICI Pru Bluechip Fund, ICICI Pru Balanced Advantage Fund, SBI BlueChip Fund and HDFC Flexi Cap Fund.
Investing in Monthly Income Mutual Funds (MIMFs) is generally considered safe, as they focus on fixed-income securities. However, risks like interest rate fluctuations and credit quality exist. Investors need to assess their risk tolerance and fund management quality before investing.
The best Monthly Income Mutual Funds based on 3-Y CAGR include Nippon India Small Cap Fund, HDFC Mid-Cap Opportunities Fund, HDFC Flexi Cap Fund, ICICI Pru Value Discovery Fund and Kotak Emerging Equity Fund.
To invest in the best Monthly Income Mutual Funds, research fund performance, expense ratios and management quality. Assess your financial goals and risk tolerance, then choose Alice Blue, Consider using a systematic investment plan (SIP) for consistent contributions.
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