Smart Investing Options
Investing in mutual funds has become one of the most popular ways to build wealth in India due to its ability to offer diversified portfolios, professional management and potential for high returns. Mutual funds pool money from multiple investors and invest in securities such as stocks, bonds and other assets. With thousands of options available, choosing from the mutual fund options in India can be a challenge. Below are some of the best mutual funds in India for 2024 based on past performance, portfolio composition and potential returns.
Top Picks for Mutual Fund Options in India
1. SBI Small Cap Fund
- Category: Small Cap Equity
- Invests in: Small-cap companies, primarily focused on high-growth potential in smaller and emerging companies.
- Estimated returns: Historically, the SBI Small Cap Fund has delivered returns of approximately 30% over the past five years, though past performance doesn’t guarantee future returns.
- Why it’s a good option: Small-cap funds tend to be volatile but offer higher growth potential. SBI Small Cap Fund is ideal for investors with a high-risk appetite looking for long-term capital appreciation.
2. Axis Bluechip Fund
- Category: Large Cap Equity
- Invests in: Large-cap companies with strong market presence, including well-established blue-chip companies.
- Estimated returns: The fund has delivered average returns of about 15% over the last five years.
- Why it’s a good option: Axis Bluechip Fund focuses on stability and growth. Its investments in large, well-established companies provide relatively stable returns, making it a suitable option for investors seeking moderate risk.
3. Mirae Asset Emerging Bluechip Fund
- Category: Large & Mid-Cap Equity
- Invests in: A mix of large and mid-cap stocks, offering exposure to both established companies and high-growth potential stocks.
- Estimated returns: Over the past five years, the fund has delivered annual returns in the range of 20%.
- Why it’s a good option: With its diversified portfolio, this fund strikes a balance between risk and reward, making it a suitable option for investors looking for both stability and growth in their portfolio.
4. HDFC Balanced Advantage Fund
- Category: Hybrid
- Invests in: A mix of equity and debt instruments, depending on market conditions.
- Estimated returns: Historically, this fund has delivered returns of around 12-14% annually.
- Why it’s a good option: This fund offers the best of both worlds – stability from debt instruments and growth from equities. It automatically adjusts its equity-debt ratio based on market conditions, making it a great choice for investors with a moderate risk appetite.
5. Kotak Standard Multicap Fund
- Category: Multi-cap Equity
- Invests in: A diversified portfolio of stocks across different market capitalizations (large-cap, mid-cap and small-cap).
- Estimated returns: Average returns of about 18% annually over the past five years.
- Why it’s a good option: The flexibility to invest across market caps allows the fund to capture opportunities in various segments, making it a versatile and balanced option for investors.
6. ICICI Prudential Technology Fund
- Category: Sectoral Fund (Technology)
- Invests in: Technology stocks, focusing on companies in the tech space such as IT services, software development and e-commerce.
- Estimated returns: The fund has delivered exceptional returns, approximately 35-40% annually, over the past five years.
- Why it’s a good option: With the tech sector booming in India and globally, this fund is well-positioned for long-term capital appreciation. However, sectoral funds tend to be riskier as they rely heavily on the performance of a specific sector.
How to Invest in Mutual Funds in India
Investing in mutual funds has never been easier, thanks to the online platforms and growing financial literacy in India. Here’s a step-by-step guide on how to invest in mutual funds:
1. Set Your Investment Goal
Define your financial goals, whether it’s long-term wealth creation, retirement planning or short-term savings. The choice of mutual fund should align with your goals.
2. Choose a Mutual Fund
Based on your investment horizon, risk appetite and financial goals, select a mutual fund. Consider factors such as historical returns, fund category and portfolio composition.
3. Complete KYC (Know Your Customer)
Before investing, complete your KYC process, which includes submitting identification and address proof, such as Aadhaar and PAN cards.
4. Select an Investment Mode
Mutual funds can be invested in via two methods:
- Lump sum: A one-time investment in the mutual fund.
- Systematic investment plan (SIP): An option to invest a fixed amount monthly or quarterly. SIPs are ideal for long-term wealth building and are great for beginners.
5. Choose a Platform
You can invest directly through the mutual fund’s website (Direct Plan) or via third-party platforms like:
- Zerodha Coin
- Groww
- ET Money
- Paytm Money
Direct plans offer higher returns as they don’t charge distributor fees, whereas third-party platforms may be more user-friendly but come with additional charges.
6. Monitor Your Investments
Once invested, it’s essential to regularly monitor your portfolio’s performance to ensure it’s aligned with your financial goals. You can do this via online platforms or by checking statements from the mutual fund company.
Final Thoughts
Mutual funds offer a diverse range of investment options suited to every type of investor. Whether you’re risk-averse or willing to take on higher risks for potentially greater returns, there’s a mutual fund out there for you. Be sure to review your financial goals, risk tolerance and investment horizon before choosing a mutual fund. With the right investment strategy, mutual funds can help you achieve your financial dreams.