BEST MUTUAL
Funds to Invest 2024
Strike the perfect balance with top mutual fund schemes. Maximize returns, meet financial goals, and secure your future.
Debt Mutual Fund
Invest in low-risk, fixed-income assets like bonds and securities, ideal for stable returns.
Equity Mutual Fund
Invest in stocks for higher returns, suitable for those with a higher risk appetite.
Hybrid Mutual Fund
Invest in a mix of stocks and bonds for balanced growth and stability.
Tax Saver Mutual Fund
Invest your money in equity shares and quality for tax deductions.
Explore a diverse range of mutual funds, including equity, debt, hybrid schemes, and more. Choose the fund that best suits your financial goals and risk appetite.
How Do Mutual Funds Work?
Mutual funds gather capital from various investors and allocate it across stocks, bonds, or a mix of both. Professional fund managers oversee these investments. Investors earn returns proportional to their shares in the fund, minus any applicable fees. This makes mutual funds a simple and efficient way for people to diversify their investments across multiple asset classes.
Types of Mutual Funds in India
Based on Asset Class:
- Equity Funds
- Debt Funds
- Money Market Funds
- Hybrid Funds
Based on Investment Goals:
- Growth Funds
- Income Funds
- Liquid Funds
- Tax-Saving Funds
- Aggressive Growth Funds
- Capital Protection Funds
- Fixed Maturity Funds
- Pension Funds
Based on Structure:
- Open-Ended Funds
- Closed-Ended Funds
- Interval Funds
Based on Risk:
- Very Low-Risk Funds
- Low-Risk Funds
- Medium-Risk Funds
- High-Risk Funds
Investment Modes for Mutual Funds
- Direct Investment
- Online Platforms
- Using a Demat Account
- Mutual Fund Agents
Why Invest in Mutual Funds?
Mutual funds offer an easy-to-use investment vehicle with built-in diversification. They’re popular among both new and experienced investors due to their accessibility and professional management.
These funds invest across a variety of asset classes, reducing the risk of relying on a single stock or sector. Unlike individual stock investments, you don’t need to actively manage your portfolio, as professional fund managers handle this for you. Additionally, mutual funds offer liquidity, allowing you to easily withdraw your investment when necessary. They also provide tax benefits and are a great option for those who want to start investing without taking on the high risks typically associated with stocks.
Benefits of Investing in Mutual Funds
Start with Minimal Investment
You can begin your investment journey with as little as ₹100 through Systematic Investment Plans (SIPs), making mutual funds accessible to almost everyone. SIPs allow you to invest small amounts at regular intervals, ensuring disciplined investing while benefiting from market conditions.
No Need for Active Management
Unlike direct stock investments, you don’t have to manage mutual funds on your own. Professional fund managers take care of your portfolio, analyzing the market to decide when to buy or sell different assets.
Easy Liquidity
Mutual funds offer high liquidity, meaning you can redeem your units whenever you wish. Whether you’re dealing with an underperforming fund or an unexpected financial situation, you can withdraw your money easily. The redemption amount is usually credited to your bank account within 1-3 business days.
Diversified Investments
Instead of putting all your money into one asset, mutual funds allow you to spread your investment across various securities, reducing risk. Even if one market or sector faces a downturn, your overall exposure remains lower.
Past Performance Review
Before investing, you can examine the historical performance of the mutual fund. While past performance doesn’t guarantee future returns, it helps assess the fund’s risk and return profile.
Risks of Mutual Funds
The common disclaimer “Mutual Fund investments are subject to market risks” serves as a reminder that all investments come with some level of risk. To maximize returns, you need to be aware of these risks and manage them effectively.
Risks in Equity Mutual Funds:
- Market Risk
- Liquidity Risk
- Concentration Risk
- Currency Risk
Risks in Debt Mutual Funds:
- Credit Risk
- Interest Rate Risk
- Inflation Risk
- Reinvestment Risk
How to Calculate Mutual Fund Returns
There are different methods to calculate mutual fund returns, whether for lump-sum investments or SIPs. Here are some common ways:
Annual Return
The annual return measures the performance of a fund over a one-year period. It’s calculated as: Annual Return = (Ending NAV – Beginning NAV) / Beginning NAV.
For example, if the NAV at the start of the year is ₹100 and at the end of the year is ₹110, the annual return would be 10%.
Point-to-Point or Absolute Return
This method calculates returns at any point in time, not necessarily after one year. The formula is: Point-to-Point Return = [(Current NAV – Beginning NAV) / Beginning NAV] x 100.
Annualized Return
Annualized return shows the performance over a long period by averaging the annual returns. It is calculated using: Annualized Return = [(1 + R1) x (1 + R2) x (1 + Rn)] ^ (1/n) – 1.
Compounded Annual Growth Rate (CAGR)
CAGR is used for multi-year investments and accounts for the time value of money. The formula is: CAGR = (Ending Value / Beginning Value) ^ (1/n) – 1.
Extended Internal Rate of Return (XIRR)
XIRR is used for SIPs with irregular cash flows. It calculates the annualized yield based on multiple investments and redemption dates.
Mutual Fund Eligibility Criteria
To start investing in mutual funds, you need to meet the following criteria:
- Indian residents, either single or joint investors
- Minors can invest through parents or guardians
- Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs)
- Trusts like religious or charitable trusts
- Partnership firms, companies, and banks
- Provident, pension, gratuity, and other similar funds