Invest in the best mutual funds recommended by Scripbox that are scientifically and algorithmically selected that best suit your needs. Let's take a look at the top mutual funds to invest this year. Be it long-term, short-term, tax saving or your emergency needs. We have you covered.
An asset management company (AMC) or fund house pools investments made by individual investors and institutional investors. With this pool of investments, an AMC forms a mutual fund. AMCs have fund managers who manage the fund investments amount and invest in stocks, securities, and bonds, etc on the behalf of investors.
Mutual fund investors are allocated units of the fund against the quantum of investment. These units can be re-invested or redeemed by investors on the maturity of the fund at the NAV.
What is a mutual fund NAV?
Net Asset Value NAV is the market price of the fund. It is important because it represents the worth of each share of the fund. One can say just like shares have a share price, mutual funds have a NAV to represent it’s worth.
How to Select the Top Performing Mutual Funds In India in 2024?
An investor would ultimately want a mutual fund that provides a higher return. The entire selection process can be guided by three attributes which are an investor’s life goals, understanding of investment risk and investment horizon.
Investment Objective:An investor should first sort out his personal life goals and corresponding to the life goals an investment plan must be chosen. Each scheme is different from the other and serves a different purpose. Hence to arrive at a meaningful decision the fund investments objective must match an investor’s goals, investment plan and risk appetite. A long term objective cannot be met with a short term scheme. All the necessary details related to the scheme, its asset allocation, objective, and strategy are available in the key information document and scheme information document.
Fund History: The fund history is the track record of the fund’s performance in the past during the ups and downs of the market. This shows the strength of the fund during tough times. A recently launched fund may or may not outperform the tough times i.e. bear runs in the market since it does not have dealt with such scenarios. On the other hand, a fund with a good history of generating consistent returns shows the accuracy of investment strategies. To shortlist, an investor must check the track for the same period for which the investment horizon is decided. For example, if an investor is willing to invest for say 5 years he must check the track record of 5 years of the fund.
Expense Ratio: An annual fee is charged by the fund house manager for managing an investor’s funds, this is called expense ratio and expressed as a percentage. The final payoff to an investor will be the returns generated minus the expense ratio. The net amount is the final amount that an investor received. A higher expense ratio would result in lower returns for an investor. Hence while considering a fund, an investor must choose a fund with a lower expense ratio compared to peer funds in the category.
Performance of Fund Manager: The fund manager’s involvement is critical in the performance of a fund. It is the fund manager’s responsibility to ensure the show is going smoothly. It is important to know the track record of the fund manager. An investor must check the performance of the fund during the market rally and slump. Better fund management is showcased when a fund provides consistent returns and contains losses during the bear runs of the market.
What are the Advantages of Mutual Funds Investments?
Unlike other investment plans like Fixed Deposit, PPF, NSC fund investment does not carry a lock in period except the ELSS fund. Mutual Fund investment allows an investor to redeem the units at any point in time and as and when required. Mutual Funds have a flexible tenure of investment and withdrawal. But this withdrawal comes along with a pre-exit penalty and an exit load.
Since Mutual fund has an asset allocation diversified among various types of assets, this diversified portfolio reduces the risk for an investor and the overall performance has a lower chance of being volatile
Mutual Fund investments are managed and operated by an expert fund house that appoints fund managers to pool investments and invest in securities ensuring investors incur a profit.
Mutual Funds are easy to buy due to multiple channels and options available for an investor. Mutual funds are managed by AMC and fund house and distributed through the below channels.
Brokerage Firms
Registrars like CAMS and Karvy
Agents and banks
Online Mutual Fund Investment Platforms. You don’t need a Demat account to make an investment.
The mutual fund has provided a higher return than other fixed income investment plan like fixed deposit, saving account balance interest, NSC, PPF, and others
Investment in ELSS Funds is allowed as a deduction under section 80c making it more attractive for an investor given the tax saving opportunity it provides. Hence investing in ELSS fund provide an opportunity to save tax and earn a return
The best thing about mutual fund investments is that an investor can start an investment with as low as Rs 500 and there is no limit on the maximum amount. An investor can choose to invest as per his income, expenses, risk taking ability, investment plan and tax plan
Frequently Asked Questions
How do you select the right mutual fund to invest in?
Before investing in a mutual fund an investor sets his life goals and understands his or her exposure to risk. The next step is to examine the past performance of the fund for the same investment horizon as selected by the investor. Along with performance, the rating of the fund reflects the reliability of the fund, the higher the better.
What is a Mutual Fund Calculator?
The mutual fund calculator provides an investor with the maturity amount and wealth gained out of the principal amount invested. An investor needs to provide the monthly amount invested, investment horizon, expected rate of return, and annual step-up percentage.
Which is the best way to invest in mutual funds?
An investor has the option to invest a lump sum or through SIP. For an investor investing through SIP can be regarded as the best way to invest in mutual funds in India because it helps build a habit of saving regularly in a disciplined manner. During the course of investing in mutual funds, an investor may be exposed to the ups and downs of the market. However, in the long run, staying invested is the best way to achieve a financial goal with a mutual fund investment plan. You can use Scripbox’s SIP calculator and lumpsum calculator to get an estimate of total wealth gained on mutual fund investments and maturity amount at the end of the fund schemes investment horizon You can also use Scripbox’s ELSS fund calculator to estimate the return on ELSS fund investments and the maturity value at the end of the investment horizon. Since investment in ELSS fund is allowed as a deduction under Section 80C it is also known as tax saver equity funds.
Why invest in the best mutual funds through Scripbox?
Investing in the best mutual funds gives you better returns thereby growing your money the right way to meet your objectives. In Scripbox once we have selected the funds, we don’t stop there; we continuously monitor the performance of the fund and eliminate the funds that are underperforming and introduce a new fund that has the potential to perform better.
Which are the best mutual funds to invest for 1 year?
You can invest in Scripbox’s emergency fund that is catered for your emergencies and can be withdrawn anytime at ease.
There are different parameters to consider for fund selection, including expense ratio, past performance, fund manager experience, and assets under management. Once you, as an investor, do your research, you will have a clear idea as to where you want to invest. And what type of category or funds.
Here are 5 mutual fund schemes with highest 3-year returns along with their expense ratios: Quant Small Cap Fund(G) tops the chart with over 39% returns followed by Quant Mid Cap Fund(G), Nippon India Small Cap Fund(G), Quant Flexi Cap Fund(G) and Motilal Oswal Midcap Fund-Reg(G) in the same pecking order. 1.
The mutual fund ranking system of Value Research gives a quick measure of how a fund has performed in the past when compared to its peers, with five being the highest rating and one being the lowest. It takes into account the risk, returns, expense ratio and other relevant factors to arrive at such ratings.
The top-performing flexi cap mutual funds include Quant Flexi Cap, JM Flexicap and Parag Parikh Flexi Cap Fund, which have given more than 20% annualised returns in the past five years. Whether they acknowledge it or not, most mutual fund investors choose schemes primarily on the basis of their past performance.
Five large cap mutual funds that gave the highest return in the past 10 years are Nippon India Large Cap Fund which gave 17.09% returns, followed by Mirae Asset Large Cap Fund with 16.99% return. The other three are ICICI Prudential Bluechip Fund, SBI Bluechip Fund and HDFC Top 100 Fund.
HDFC Mid-Cap Opportunities Fund, the largest scheme in the mid cap category based on assets managed, offered 30.52%. SBI Contra Fund, the only contra fund in the list, offered 32.21% in five years. A monthly SIP investment of Rs 10,000 in these 23 equity schemes would have grown to Rs 12.49-17.94 lakh.
There are 4 mutual fund schemes which have given an annualised return of 20 percent in the past five years. These are Quant ELSS Tax Saver Fund, Bank of India ELSS Tax Saver Fund, SBI Long Term Equity Fund and Bandhan ELSS Tax Saver Fund.
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