Introduction:
Mutual funds, of late, have emerged as one of the most popular investment vehicles among all types of investors. They allow you to invest in various money-market instruments as per your risk appetite and investment goals. For example, if you prefer capital safety and wish to invest for the short term, you can consider debt mutual funds, which predominantly invest in debt-based instruments such as bonds.
On the flip side, if you wish to take up an aggressive investment route and invest for the long term, you can opt for equity mutual funds. These funds invest the majority of the corpus in equity instruments, i.e., in the shares of companies listed on the stock markets. Equity mutual funds are usually the best bet to generate inflation-beating returns over time.
Another benefit of mutual funds is that they allow you to invest through lump sums and Systematic Investment Plans (SIPs). SIPs allow you to make fixed investments in a mutual fund scheme of your choice at pre-determined intervals. They can be monthly, quarterly, semi-annually, or annually.
Top mutual funds in India to start a SIP in 2024
A SIP facilitates disciplined investing and enables you to create a substantial corpus through compounding. However, it's crucial to choose your mutual fund scheme wisely. You can consider factors such as the fund's past performance, the fund manager’s experience and track record, etc. To make your task easier, we have handpicked top mutual funds in India for SIP in 2024. Keep reading.
1. HDFC Mid-Cap Opportunities Fund
HDFC Mid-Cap Opportunities Fund invests predominantly in the stocks of mid-cap companies. It has 93.21% of its investments in Indian equities, with 52.58% in mid-cap stocks, 5.57% in large-cap stocks, and 18.09% in small-cap stocks. This fund is ideal for investors with a three-to-five-year investment horizon and aiming for high returns. However, it's important to note that this fund carries a high level of risk, making it less suitable for risk-averse investors. The fund carries a CRISIL rating of 5 stars, and its one-year return stood at 56.57% (as of 29 February 2024).
2. Parag Parikh Flexi Cap Fund
Parakh Parikh Flexi Cap Fund invests in companies with varying market capitalisations. 70.63% of its investments are in domestic equities, out of which, 48.07% is dedicated to large-cap stocks, 5.8% to mid-cap stocks, and 7.03% to small-cap stocks. Additionally, the fund has a 0.31% investment in debt, comprising 0.01% in government bonds and the remaining 0.3% in low-risk securities. The fund is suitable for investors with moderate risk appetite and its one-year return (as of 28 February 2024) stood at 42.62%.
3. ICICI Prudential Bluechip Fund
ICICI Pru Bluechip is well-suited for investors seeking a long-term equity investment horizon of five years, provided they are comfortable with a moderate to high level of risk. The fund allocates 91.39% of its investments to Indian stocks, focusing mainly on large caps at 81.37%, followed by 4.85% in mid-caps and the remaining in small caps. Additionally, there is a 0.47% allocation in debt, primarily consisting of government securities. As of 28 February 2024, this fund carried a 5-star CRISIL rating, and its one-year return stood at 39.8%.
4. Nippon India Small Cap Fund
Nippon India Small Cap Fund is one of the best-performing mutual fund schemes in India. However, since it primarily invests in small-cap companies, the fund carries extremely high risk. 96.42% of the investments are in equities, out of which, 55.41% are in small-cap companies, 9.68% in mid-cap companies, and 5.83% in large-cap companies. The fund has a 5-star rating from CRISIL, and its one-year return (as of 28 February 2024) stood at 58.23%.
To conclude
Most of these schemes allow you to start a SIP with as low as Rs. 500 per month. You can initiate one or more SIPs in these funds to begin preparing for your long-term financial goals. Diversifying your portfolio across various mutual fund categories can help mitigate risk effectively. Additionally, you can consult with a financial advisor to tailor your investment strategy to your specific needs.
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