Mutual Funds for Beginners-Online mutual fund investment 

Mutual Funds for Beginners-Online mutual fund investment

So after all the research for where to invest your money, you zeroed-in on Mutual Funds. You are all set to invest. But like many of us, you may be wondering how to choose the first investment….. Today, we are going to help you. But before that ... a quick reminder...if you want to watch more Article like these, make sure you click the subscribe button .

Mutual Funds 

So, how should you choose your first fund? The good part about Mutual Funds is that they offer scheme categories that match almost every risk appetite & time horizon. So let us take a look at some of the fund categories that could match your requirements: Funds for investments up to 1 year If you are investing for say, 1 week to 1 year, you've got to stay to Debt Schemes. And specifically, don’t transcend these 5 categories - Overnight Funds - when your horizon is for up to 1 week. Liquid Funds - once you are looking to take a position for 1 week to 1 month Ultra Short Duration: for 1 to 3-month investment Low Duration Funds: for 3 to 6 month investment and market Funds: for your investment that you simply can do for six months to 1 year.


All these Scheme Categories are a much better alternatives for an equivalent duration’s FDs that you simply would get during a bank. Funds for 1-2 year investment horizon For this investment duration too, you ought to stick with Debt Funds. Short Term Debt Funds are often an honest category for this These funds mostly lend to good companies for a period of 1 to three years. if you complete 3 years they tend to deliver much better returns than Bank Fixed Deposits as you would pay far lower effective tax on your returns than what you pay on  interest you receive on FD. Funds for 2-3 year investment horizon From debt funds, you'll choose Banking and PSU Debt Funds These funds lend only to banks and public sector companies.

Mutual fund investment

These companies have good credit rating & hence the risk is controlled even if money is lent for a couple of years or more. Scheme category that suits a 2,3 year horizon is Equity Savings Funds These funds put around 30-35% in stocks, 30-35%in equity securities that provide arbitrage opportunities, while the remaining is invested in debt. Equity offers growth potential while debt adds stability. The arbitrage part is more or less risk-free because it buys and sells the stock at an equivalent time to require advantage of various prices of an equivalent stocks in different markets.

Funds for 3-4-year investment duration ELSS Funds If you'll lock-in your money for 3 years,you should choose ELSS funds. These funds have another advantage of helping you save to Rs. 46,800 in taxes per annum , plus you get the expansion potential of equities. Dynamic Asset Allocation Funds These are hybrid funds buy stocks at low prices & sell automatically when the costs rise. These funds keep changing the allocation to stocks & debt to get optimal return & minimize risk. Funds for 4-5 year investment duration Aggressive Hybrid Equity Funds - If you would like to regulate risk, choose Aggressive Hybrid Equity Funds.

They invest 65% -80% of your money into equity and 20%-35% of the cash in debt. This is the perfect category for long-term investments for each first-time investor. Large-Cap funds Another category for your 4-5 year horizon is corporation Equity Mutual Funds. They invest within the Top 100 companies, a number of whom are most loved brands like, HDFC Bank, SBI, Hindustan Unilever or Reliance Industries,etc. These funds provide relatively stable returns and aren't as volatile as other equity fund categories.

Best mutual funds in India

Multi cap funds a rather aggressive cousin of huge Cap open-end fund investment , they follow a Diversified Portfolio strategy that provides your money exposure in companies of all sizes, across sectors. Funds for 5-7 year investment duration Large and Mid cap These funds invest during a combination of India's biggest and India's fastest-growing mid-sized companies, supplying you with a mixture of growth and stability. Mid Cap Funds funds invest in midsized companies. The companies in this space are some of the fastest-growing companies.

For this reason, you can get market-beating returns. However, they can be volatile in the short to medium duration Funds for 7+ year investment horizon Small Cap Mutual Fund investment These funds invest in the smallest companies in India These companies have the potential to become mid and even large companies within the future and may give outstanding returns during this journey. However, this space is extremely volatile,so you need to be prepared. Now that you know how to pick your first fund,time to get started on your investment journey. Want to take a position in 0% commission Direct Plans from Top Mutual funds for free? Just click the link below and download the Any mutual fund app And yes, don’t forget to share this Article with your friends!

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