Friends, Are you ready to invest in Mutual Funds. If you are here on my page of Top 10 Mutual funds to invest in 2020 then you must be knowing that it is one of the best instruments to invest your money to meet your long term goal. If you have make up your mind to invest in Mutual Fund the question arises that in which mutual funds we should invest in. What are the top 10 best Mutual funds to buy in 2020?
Often, You ask this question to your friends or colleague in an office before investing in Mutual funds. To get some ideas you take the help of a search engine. Tending is to get a readymade list of ideas to invest in mutual fund schemes. All investors always want an easy way to research mutual funds before investing.
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What are Mutual funds?
Mutual funds are the collection of funds that are managed by fund managers who are professional in this field. Several investors get their investment pooled and invested in the Share market or capital assets.
Why we invest in Mutual fund
We invest in Mutual Fund just because of the following reason
-One of the top reasons why people should invest in a mutual fund is their minimum investment amount. Anyone can start their investment with as low as Rs 500/-
Mutual fund always gives higher returns than bank deposit in the long run. Mutual Fund has a very large number of financial instruments such as stocks, fixed income schemes, and gold, etc. Using these all financial instruments mutual fund gives benefits of diversification to its investors in just one scheme.
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The mutual fund industry in India has a regulatory body called SEBI (The Security and exchange board of India). It regulates all the mutual funds and keeps a vigil to work smoothly. -Expert Management: It is always managed and looked after by professional fund managers. The objective and vision of fund managers are to fix that all the investors get a large sum of money as return from the scheme in which they have invested the sum. The fund manager can change the asset allocation from time to time as per the requirement of the market.
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Investors have the freedom to invest and withdraw their funds at any time. This means it is an open-ended scheme, anytime buy and exit is possible. But when u do any investment you should carefully read the exit load charges. In Mutual funds, when you exit any fund the fund house will release funds one day after the selling of Unit at that day’s NAV.
-Today almost 7crors of investors are invested in different mutual fund schemes.
Types of Mutual Funds to invest :
There are different types of Mutual funds schemes based on the need of different people. There are three types of Mutual Funds:
Equity or Growth fund:
- If you invest in Equity or Growth fund then your invested amount is invested in different shares of the company.
- The main objective of this type of fund is wealth creation
- This fund has great power to give a higher return to your invested fund in long term duration.
- Some examples:
- Large Cap funds: These funds include those companies which run a large established business.
- Mid-cap Funds: Mid-sized companies come under it.
- Small-cap fund: funds are invested in small-sized companies.
- Multicap Fund: These funds are totally mixing of large, mid and small size share of companies.
- Sector fund: These funds are the fund that is invested in an only sectoral type of business like banking fund, health care fund and real estate fund.
- Thematic funds are the funds in which funds are invested in common theme e.g health care fund: Funds are invested in those companies which will benefit from growth in the health segment.
- Tax saving fund
Debt fund or Bond fund or Fixed income fund:
- Debt Mutual fund is a fund that invests in government bonds and securities. These are a fixed-income security segment scheme. These include bank certificates of deposits, money market instruments and commercial papers and debentures, and other instruments like commercial paper, treasury bills, etc.
- These are funds safe to invest and are most suitable for those who want to generate income with less risk profile.
- Some examples of it are liquid, short term, floating rate, corporate bond, dynamic bond, gilt fund, etc.
- These funds are the funds that invest in both equity as well as Debt fund like fixed income, thus offers the best of above both types of funds i.e its is potential to grow as well as income generation.
- Examples would be balanced advantage fund, Pension plan, child plan, and Aggressive Balanced Funds,
Mutual fund investment in 2020
If you don’t have the knowledge of the Share market you would feel very difficult to pick top-performing mutual funds because in different periods of time if you compare it between their peers then you would be confused because in a different period to time different funds would have performed well.
Now the main question arises here is how can you find the right fund for you? Just you need to ask two simple questions to yourself:
1.Duration of investment:
You should consider it as the first and most important factor of investment in a mutual fund. Ask yourself that after how much time you need that money which is invested in mutual fund. The answer to this question will only determine the category of funds you can choose to invest in.
2. The risk you are willing to take:
The most important question that is equal to the first one is the risk you are willing to take. There are mutual fund that cover the entire risk. It is subdivided for low risk to high-risk category.
Long term investment in Mutual fund
But here we will be getting those mutual funds that have performed well in the long term and are also performing better than others in present time. The data shown here are well researched and I have picked the top-performing mutual funds from different fund houses in the country.
|Top Equity fund||1 yrs Return||5 yrs return|
|Mirae Asset Large Cap Fund||15.63%||10.44%|
|Axis Bluechip Fund||24.97%||10.78%|
|ICICI prudential Bluechip fund||13.24%||7.78%|
|Axis midcap fund||25.62%||10.98%|
|SBI magnum Multicap Fund||17.93%||10.02%|
|SBI small cap fund (G)||22.0%||13.80%|
|DSP Equity Fund Regular G||30.80%||9.80%|
|Mirae Asset Emerging Bluechip fund||23.37%||15.51%|
|Kotak Standard Multicap Fund||18.87%||10.17%|
|Axis Focused 25 Fund||27.93%||12.12%|
How to choose the Best Performing Mutual fund?
Choosing the best Mutual fund is a great art for any investor. The best way to choose a great mutual fund by yourself is to look at its qualitative as well as quantitative measures-
Before investing every investor should do a well assessment of the funds’ performance for over a period of time. You should choose that type of fund which is consistently beating its benchmark for the last 5 years.
Asset Under Management. Choose the fund which is neither too big nor too small in size. Although, the size of the fund is not defined and related to the return of the fund.
Choose those fund manager who is giving consistently great performance this his career. The fund manager is responsible for making an investment decision for the portfolio of the fund he is managing. If a fund manager is experienced who is managing any fund, you should choose that fund only to invest.
Fund house reputation:
The quality and reputation of the fund house are most important for any investment decision. If any fund house is giving a strong consistent track record, good performing funds then Mutual fund of the fund house is most important to invest in.