Mutual funds are nothing but like a big investment pools where lots of people put their money together to invest in things like stocks, bonds, or other assets. This lets people to invest and make money a little faster than the order. Mutual funds are managed by the fund manager of different schemes who try to make smart choices about where to invest the money to make it grow. It’s a kind of like bringing up the investors to try and make money work harder for you.
Mutual funds can be break down into several main types based on the assets they invest in and their investment objectives which are as follows:
1.Equity Funds: These funds invest primarily in stocks or shares of companies. They aim to provide capital appreciation over the long term and are suitable for investors seeking higher returns with higher risk.
There are multiple equity schemes with their 3yr CAGR (Compound Annual Growth Rate) which are as follows:
Nippon India Mutual Funds– 27%
HDFC Top Hundred 100 Funds-23%
TATA Large Cap Funds-20%
2. Fixed Income or Bond Funds: These funds invest in government assets like Treasure bills, debentures etc. or corporate bonds and other debt related instruments. They aim to provide regular income through interest payments and are considered lower risk compared to equity funds and also offers the promised returns which may slightly change.
Here, the few Fixed Income funds are as follows:
1.Kotak Bond Funds
2.HDFC Bank and PSU Funds
3.Bandhan Bond Fund Short Term
3. Index Funds: These funds aim to replicate the performance of a specific market index like Sensex or NIFTY-50. They typically have lower management fees compared to actively managed funds, as they aim to match the index rather than outperform the index. This is quite smarter than the others if you are investing for the long terms.
1.Nippon India Index Fund S&P BSE SENSEX
2.HDFC Index BSE SENSEX Direct Growth
3.TATA BSE SENSEX Index Direct
These are the main types of mutual funds that investors can choose from based on their financial goals, risk tolerance, and investment horizon. Each type has its own characteristics and potential benefits depending on the investor’s needs. If you wants to invest in Mutual fund scheme, you should check the objectives of the schemes and SIM (Scheme Related Document).
FAQ (Frequently Asked Question)
Q1.How to invest in mutual funds?
A1. You can start investing by choosing a fund, opening an account, funding it, and monitoring performance regularly. This whole is necessary is required for the desired outcomes.
Q2.What is the best mutual funds to invest in 2024?
A2.In India, there are some of the funds which offers good Compound Annual Growth Rate (CAGR) include HDFC Mid-Cap Opportunities Fund, Axis Bluechip Fund, SBI Bluechip Fund, etc. When you would start investing in any schemes, need to track the current fund performance.
Note–The above mentioned is based on facts and reports. If you are starting to invest in Mutual Funds, please take the action at your own.