Top 10 Mutual Funds for SIP: Many new entrants who are trying to invest in mutual funds search the internet and go by what the expert advisors recommend. However, it is always better to gain knowledge about the right investment ideas from those who are experienced and have gained expertise by investing consistently. In many cases, the online search lands you to some random website which has a list of schemes shortlisted on their short term performance. Many times schemes from a single category top the list because they are doing well at that moment. Here we lay out a few facts about mutual fund investments that can help you in the long run.
Top 10 Mutual Funds for SIP: Though there are various methods to invest in mutual funds, SIPs or Systematic Investment Plans are the best as you don’t have to block a major chunk of your money at a time, and you can keep investing a fixed amount every month in your preferred mutual fund scheme. One thing that has to be remembered is that you should always select the best mutual fund which offers SIP plans that match your investment objective, horizon, and risk profile.
You should always keep a few important things in mind before investing in SIP Plans. The foremost part involves finding out about each category and whether they are suited to risk profiles and investment objectives. Hybrid schemes are best suited for those who have just stepped in to invest in equity mutual funds, as these invest a part in equity and the rest in debt because of its hybrid nature. Furthermore, they are less volatile than equity schemes, which makes it an ideal option for those with less risk appetite. Hybrid schemes are the best investment vehicle for those investors who are looking to create long-term wealth without the hassles of much volatility. Investing via SIPs in these schemes may prove to be beneficial.
Large cap schemes are meant for those who are fine with high risk. These schemes invest in top 100 stocks and are considered comparatively safer than mid-cap and small cap schemes. One should look to start an SIP in one of the large cap schemes that give adequate results with some stability. A traditional investor can also look to invest in flexi cap mutual funds as they invest across market capitalisations and sectors according to the expert views of the fund manager.
Those looking for extra returns with a bit of risk involved can place their bets on mid-cap and small cap schemes. Mid-cap schemes invest majorly in medium-sized companies, and small cap funds invest in smaller companies in terms of market capitalisation. Though these schemes are volatile, they have the potential to give superior returns if invested for a long term.
To help you shortlist the right SIP funds, ET Money has curated a list of best SIP funds that have generated consistently better SIP returns as compared to other funds.
