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Top 5 Mutual Funds to Start Your SIP If You Are Under 30

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26 Jun 2023

Introduction

Are you a young investor ready to take control of your financial future? An early start to your investment journey can have a profound impact on your long-term wealth creation. With so many funds available, choosing the right ones for your Systematic Investment Plan (SIP) can be challenging. In this article, we'll look at the top 5 mutual funds that may be suitable for investors under 30.

Top 5 Mutual Funds to Start Your SIP If You Are Under 30

1. Quant Tax Plan Direct-Growth

Quant Tax Plan Direct-Growth is an Equity Linked Savings Scheme (ELSS) mutual fund scheme offered by Quant Mutual Fund. This medium-sized fund has amassed a large asset under management (AUM) of Rs.3,533 Crores as of March 31, 2023. Performance-wise, Quant Tax Plan Direct-Growth has delivered impressive returns. Over the past year, the fund has achieved a remarkable growth rate of 15.23%. 

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Another notable feature of Quant Tax Plan Direct-Growth is its low expense ratio of 0.57%. This sets it apart from many other ELSS funds in the market. The fund has a track record of doubling the invested capital every three years. This attribute demonstrates the potential for exponential growth. It underscores the advantage of starting early with SIP investments in this fund. 

2. Bank of India Small Cap Fund Direct-Growth

Next in the list of top 5 mutual funds to start your SIP is Bank of India Small Cap Fund Direct. The fund has been a reliable option for investors seeking exposure to the small-cap segment. Currently, the fund manages an impressive Rs. 460 Crores worth of assets under management (AUM) as of 31st March 2023. 

Over the last one year, it has generated returns of 25.17%, outperforming several peers in its category. Since its start, the fund has achieved an average annual return of 28.70%. It indicates its ability to generate consistent growth. It's worth noting that this fund stands out as a smaller fund in its category. This can be helpful for investors as it gives more flexibility in their investment approach and can invest in promising small-cap companies. 

3. Edelweiss Government Securities Fund Direct-Growth

Edelweiss Mutual Fund has introduced the Edelweiss Government Securities Fund Direct-Growth. It’s a debt mutual fund scheme designed to meet specific investment objectives. The fund's aim is to generate income by investing in the money market and short-term debt instruments. By investing a large portion of its debt allocation in government securities, the fund aims to provide a relatively safer investment avenue for young investors. 

With a track record of consistent performance, the fund has demonstrated impressive annualized returns of 8.91% since its inception. Moreover, the fund's investment approach focuses on fundamental research and in-depth analysis of companies. This ensures that investments in fundamentally sound businesses with growth potential. 

4. ICICI Prudential All Seasons Bond Fund Direct Plan-Growth 

It is a well-established mutual fund scheme offered by ICICI Prudential Mutual Fund. Since its launch, this fund has earned a reputation for delivering consistent and attractive returns. Over the past one year, the fund has generated returns of 8.88%. These returns show that the fund has been able to navigate market conditions effectively and provide stable growth to its investors.

The fund falls under the category of dynamic bond funds. This means that the fund's investment strategy allows for flexibility in adjusting the portfolio duration and asset allocation based on interest rate movements and market conditions. This strategy aims to capitalize on interest rate movements and generate attractive returns while managing risks associated with interest rate fluctuations.

5. Baroda BNP Paribas Aggressive Hybrid Fund Direct-Growth

Baroda BNP Paribas Aggressive Hybrid Fund Direct-Growth is last on our list of top 5 mutual funds to start your SIP if you are under 30. Over the past year, Baroda BNP Paribas Aggressive Hybrid Fund Direct - Growth has demonstrated commendable performance, delivering returns of 15.28%. Since its start, it has achieved an average annual return of 13.31%. This consistent track record is an indicator of the fund's ability to generate attractive long-term returns. 

Furthermore, the fund has a historical record of doubling the invested capital every four years. The aggressive hybrid nature of this fund makes it an attractive choice for young investors. By combining equity investments with debt instruments, it strikes a balance between capital appreciation and income generation and minimizes the impact of market fluctuations.

In Conclusion

Investing in these mutual funds through SIPs can help you build wealth in a disciplined and sustained manner. SIPs ensure you remain invested across market cycles. For SIP investment in mutual funds, open a Demat account with Motilal Oswal today. 

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