Diwali Special Top 10 Mutual Funds: Diwali is not just a festival of lamps. It is also considered as an auspicious occasion to start a new investment. It is believed that investments made on this day yield manifold returns. For those who cannot take the risk of investing directly in equities but can invest a little capital, investing in mutual funds is a great option. There are many types of mutual funds that one can choose and invest according to their financial goals. Here below are the information of some such mutual funds, which will not only help in achieving your financial goals but will also help in increasing your capital.
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liquid fund
If you keep money in a savings account because it provides liquidity, then keeping money in a liquid fund for short term can prove to be a better option. In this, you can get higher returns from savings account and can also withdraw money in liquid funds at the time of need. Apart from this, if you want, you can transfer your money to equity. For example, Quant Liquid Fund has given returns of 4.69 per cent to investors in the last two years and 5.57 per cent in the last five years. This is more than a normal savings account.
debt fund
A part of your capital should also be invested in debt. By including debt funds in your portfolio, the capital remains safe during volatility. If the investment is maintained for more than three years, then the return will be considered as long term capital gain and will get the induction benefit. Axis Dynamic Bond Fund has given returns of 4.22 per cent in last one year, 8.62 per cent in two years and 9.78 per cent in three years.
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Aggressive Hybrid Funds
By adopting this option, your capital is invested in both equity and debt i.e. in this option both the security and growth of capital can be found through the same fund. Most importantly, it offers the benefit of equity taxation on investment. This is a very good option for new investors. Kotak Equity Hybrid Fund has given investors an impressive 50.40 per cent return in six months. It has given returns of 22.24 per cent to investors in the last two years and 13.69 per cent in three years.
Equity Savings Funds
It is similar to a hybrid scheme but in this a major part of the capital is invested in debt. Under this scheme, the capital is invested in equity, debt and arbitrage opportunities. Since less money is invested in equity under this scheme, then it can be a better option for senior citizens as well for one or two years of investment. SBI Equity Savings Fund has given investors 13.87 per cent returns in one year, 12.62 per cent in two years and 8.86 per cent in three years.
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Large Cap Funds (Equities)
If you want to increase your capital continuously through investment in equity, then this can prove to be a better option. Large cap funds have volatility as compared to midcap or small cap peers. This is a better option to achieve your long term goals. Axis Bluechip Fund has given an impressive 51.90 per cent returns to investors in the last six months. Its returns have been excellent in the long run as well. This fund has given investors 24.48 per cent in two years, 24.98 per cent in three years and 19.08 per cent in five years. Keeping investors happy even during the sharp fall in the market during the Corona epidemic.
Mid Cap Funds (Equities)
Investing in this is more risky than large cap funds but has a higher chance of getting above average returns. The capital invested in these funds is invested in such growth companies whose potential has not been fully utilized yet. If you want to arrange money for your child’s education or down payment of the house, then this can prove to be a better option. Investors in PGIM India Midcap Opportunities Fund have seen returns of up to 95.29 per cent in just one year. In the long run, this fund has performed well even in five years.
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small cap funds
If you can take the risk then you can invest in small cap funds. It has high volatility but it can give great returns in the long run. However, it is not for such investors who cannot take risk. Despite this, it is not even for such investors who want to invest their money somewhere for a short time. This fund is best for long term investment. Quant Small Cap Fund has given returns of 124.15% to investors in just one year. It has given a return of 23.17 per cent on five years of investment.
Equity Multi-cap Funds
If you can invest in largecap, midcap and smallcap, then you can get the benefits of these three options through this one fund. There is flexibility in multi cap funds. It is a better option for long term investment. BNP Paribas Multi Cap Fund has given 70.82% returns to investors in one year. The fund has given investors 29.83 per cent in two years, 23.68 per cent in three years and 16.24 per cent in five years.
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international funds
International funds are a great option if you want to invest in blue chip stocks like Amazon, Facebook, Netflix or Apple. This fund not only diversifies your portfolio but also stays safe from volatility in the domestic market. ICICI Pru US Blue Chip Equity Fund has given returns of 20.09 per cent to investors in the last five years.
ELSS Funds
It is a must have in your portfolio. Investments made in it can avail tax benefits under section 80C of the Income Tax Act, 1961. It has the shortest lock-in period among tax saving instruments, so it is also a better option in this respect. It has given above average returns in the long run. Canara Robeco Equity Taxable Fund has given returns of 61.69 per cent to investors in one year apart from tax savings. Since it has a lock-in period of three years, it has given a return of 28.27 per cent in three years when it comes to returns during this period.
(Article: Abhinav Angirish, Founder, Investonline.in)
(Disclaimer: These are the personal views of the author and for informational purposes only. Before taking any investment decision, please consult your advisor.)
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