When it comes to choosing between active and passive mutual funds, investors often find themselves in a dilemma. ICICI Prudential Bluechip Fund - Direct Plan-Growth SBI Magnum Multicap Fund - Direct Plan-Growthĥ. Kotak Standard Multicap Fund - Direct Plan-GrowthĤ. Axis Bluechip Fund - Direct Plan-Growthģ. Mirae Asset Large Cap Fund - Direct Plan-GrowthĢ. Here are some mutual fund options that you may consider:ġ. On the other hand, large-cap funds hold stocks of large-cap companies with a solid track record of steady growth and reliable returns. Diversified equity funds invest across various market capitalizations and industry sectors, which can help in portfolio diversification and risk management. Investors may consider large-cap or diversified equity funds based on market conditions. They offer higher returns compared to debt mutual funds or fixed deposits, but they also carry higher risks. If an investor is planning to invest ₹5 lakh and aiming to build long-term wealth, equity mutual funds may be a suitable option. To make a well-informed decision, factors such as financial goals, investment horizon, and risk appetite should be carefully considered. Investors who have evolved well can look at Smart Beta ETF and try and earn well in a passive way from factor investing.Ĭhoosing the right mutual fund scheme to invest in can be a challenging task with over 40 mutual fund houses and thousands of schemes available. This will enable him to earn higher returns (of course with higher risks). This would enable the investor to earn returns in line with the market and also get the benefit of cost averaging when the near term outlook of the market remains uncertain.Ī more evolved investor or one who has high risk appetite can invest in a mix of flexicap/multicap and smallcap funds. A beginner in the market and/or investor with low risk appetite could look to invest in passive funds like Nifty ETF or Nifty Next ETF, preferably on a SIP basis (spreading the lumpsum over say 6-9 monthly investments). We also recommend invest a part into passive funds like the Nippon India Nifty 50 Bees ETF.ĭeepak Jasani, Head of Retail Research, HDFC SecuritiesĪ lot will depend on the risk appetite of the investor and his evolution stage. Investing in them through ETF is convenient and gives you incredible diversity for what can be a minimal investment amount.Īmong the equity mutual funds, some of the schemes that we are recommending include ICICI Prudential Bluechip Fund, SBI Flexi Cap Fund, Mirae Asset Midcap Fund and Canara Robecco Emerging Equities Fund. If you believe in the Indian growth story, then the benchmark index like Nifty 50 and BSE Sensex are going to give consistent returns over the long term. If you're a novice investor who doesn’t want too much hassle, an index fund makes sense. This is considering you already have some investment in fixed income (like FD) and have some savings for emergency in your savings account or in liquid funds. But for someone nearing retirement it should be 40-50% in equity funds and rest in debt funds.Īssuming that you have an investment horizon of over 5 years, and you are comfortable with risk – a diversified portfolio with equity mutual funds is ideal. For someone who is young, it makes sense to have a portfolio biased towards equity. Your age will also play a key role in determining your choice of asset class. Next is to understand your risk-taking ability - are you risk averse, are you open to taking moderate risks or do you believe in high-risk high-return philosophy. Let's get advice from several industry professionals about which mutual funds you should choose if you as an investor have ₹5 lakhs in your hands right now. According to sources, equity mutual funds have provided outstanding returns over the past year: over 20% in one year, over 45% in three years, and up to 22% returns over the previous five years. According to the current SEBI Mutual Fund Regulations in India, an equity mutual fund scheme must invest at least 65% of its assets in equity-related stocks and securities. A mutual fund scheme that primarily invests in equity stocks is known as an equity fund. SIPs, or systematic investment plans, are the greatest way to participate in any mutual fund scheme since they offer a number of advantages for investors, including the power of compounding, a low initial contribution beginning at ₹500, rupee cost averaging, and many more. Mutual funds that invest in equity have been shown to outperform other asset classes over the long run in terms of returns.
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