Mutual funds are one of the simplest investment avenues where you can invest your money and become rich by investing as low as Rs 100 every month.
If you are someone who is low on funds but does not want to miss out on the bull run, investing in a mutual fund is your answer.
In this blog, let us find out the top 5 mutual funds where you can start an SIP with as low as Rs 100.
HDFC Balanced Advantage Fund
This is an asset allocation fund that balances investments between equity and debt based on market conditions. It provides long-term capital appreciation and has low volatility as it adjusts its equity exposure according to market valuations.
It is ideal for investors with a moderate risk tolerance as it offers risk management during volatile markets.
ICICI Prudential Bluechip Fund
It is one of the most suitable funds for long-term wealth creation and conservative investors. This fund focuses on investing in blue chip companies that have a proven track record of performance. It generates consistent returns over the long term by investing in the top 100 companies in the stock market.
Nippon India Small Cap Fund
This fund invests in small-cap companies with high growth potential. While the small-cap segment offers higher returns, it also comes with higher risks due to market volatility.
The fund seeks long-term capital appreciation by targeting emerging businesses poised for rapid expansion and is suitable for you if you are a long-term investor.
Kotak Flexi Cap Fund
It is a diversified equity mutual fund with the flexibility to invest in large-cap, mid-cap, and small-cap companies. The fund aims to provide capital appreciation over the long term by adjusting its portfolio across different market maps.
It is best suited for those with a medium to long-term investment horizon.
Mirae Asset Large and Midcap Fund
This fund focuses on investing in a combination of large-cap and mid-cap companies and aims to provide stability as well as growth. It provides exposure to stable large-cap companies and capitalises on the growth potential of mid-cap firms.
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Things to Keep in Mind When Starting out Mutual Fund Investments
If you're planning to invest in a scheme with a Rs 100 minimum subscription, keep the following factors in mind:
1. Risk Appetite
Your investment amount should align with your risk tolerance and how much you can afford to lose. If you're comfortable with higher risk, starting with smaller investments is ideal, but you may need to contribute regularly to stay on track with your financial goals.
2. Investment Goal and Time Horizon
Keeping a long-term horizon is helpful and eventually increasing the amount of your contribution to the mutual fund is a good strategy to have in place. However, if you're looking to build wealth over time or contribute to multiple schemes, such a plan can be a suitable option.
3. Scheme Performance
Evaluate the past performance of a scheme to make sure it matches your expectations. Look for consistency in returns and whether it aligns with your financial goals.
4. Fund House Reputation
SIPs are offered by various financial institutions, so it's important to research the credibility of the fund house. The fund must be backed by a reliable institution with a track record of stability and delivering good returns.
5. Expense Ratios and Fees
Be mindful of any fees and the exit load associated with the SIP. If the costs are too high, it may reduce the potential returns and make the investment less attractive.
Conclusion
Investing in a Rs 100 SIP is a great way to start building wealth gradually. Your investment must align with your risk appetite, financial goals, and time horizon to meet your needs effectively.
At first, Rs 100 may seem like a small amount to begin with, but the key is to get started. You can set up a one-time mandate to automatically deduct Rs 100 every month from your bank account. As your income grows, make sure to increase your SIP contributions over time.
A Rs 100 SIP is a step in the right direction toward growing your wealth.
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