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Introduction
Thinking about investing in mutual funds but unsure where to start? I’ve got you covered!
In this article, I’ll share some great mutual fund options based on my research in 2024. I’ve personally invested in some of these, and they’ve performed well for me. But remember—this is NOT financial advice. I’m not a SEBI-registered investment advisor.
Before you invest, do your own research and consult a financial expert to ensure these funds match your risk profile. Now, let’s explore five types of mutual funds and the best options in each!
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1. Exchange-Traded Funds (ETFs)
ETFs are a great way to invest in the stock market without actively managing your portfolio. These funds track an index, like the Nifty 50, and aim to replicate its performance.
The best thing about ETFs? Low costs! Since they’re passively managed, the key factor to consider is the expense ratio—the lower, the better.
Best ETFs to Consider:
- SBI NIFTY ETF
- Motilal Oswal NIFTY ETF
- Zerodha ETF (A new player in the mutual fund space)
- Navi NIFTY ETF (Founded by Flipkart’s Sachin Bansal, known for low fees)
Since all these ETFs track the same index, their performance will be nearly identical. Your main focus should be on choosing the one with the lowest fees.
2. Large Cap Mutual Funds
Large-cap funds invest in well-established, high-market-cap companies. These funds are generally stable and reliable, making them a great choice for long-term investors.
Top Large Cap Funds:
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Nippon India Large Cap Fund
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HDFC Top 100 Fund
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ICICI Prudential Bluechip Fund
Before picking one, check its five-year performance and expense ratio. You only need one large-cap fund, so choose wisely!
3. Flexi-Cap Mutual Funds
Flexi-cap (or multi-cap) funds invest in a mix of large, mid, and small-cap stocks. This gives fund managers the flexibility to allocate funds where they see the most potential.
Best Flexi-Cap Funds:
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Quant Flexi Cap Fund
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HDFC Flexi Cap Fund
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BOI (Bank of India) Flexi Cap Fund
These funds offer diversification and have performed well over the last five years. If you want exposure to different market segments, a flexi-cap fund is a great choice!
4. Contra Mutual Funds
Contra funds take a contrarian approach to investing. They buy undervalued stocks that most investors overlook, aiming to benefit when the market corrects itself.
Since these funds go against the crowd, they require patience—but they can deliver strong returns over time.
Top Contra Funds:
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SBI Contra Fund
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Kotak India Equity Contra Fund
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Invesco India Contra Fund
These funds have generated 39-40% returns in the past 3-5 years! However, since they follow a unique investment strategy, they may not suit everyone.
5. International Mutual Funds
Want to invest beyond India? International funds give you exposure to global markets. Some focus on US stocks, while others invest in regions like China.
Best International Funds:
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Motilal Oswal NASDAQ 100 Fund of Fund (Invests in the top 100 US tech stocks)
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Motilal Oswal S&P 500 Index Fund (Tracks the S&P 500, which includes the 500 largest US companies)
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Edelweiss Greater China Fund (Invests in Chinese stocks but has recently given negative returns)
The first two funds have delivered 30-40% returns in recent years. However, global factors—like the US elections—can impact their performance, so keep an eye on market trends.
Conclusion
These are five great mutual fund categories to explore! But before you invest, keep these tips in mind:
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Choose funds that match your risk profile.
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Invest in only one fund per category to avoid duplication.
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Review performance regularly and adjust as needed.