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Best Mutual Fund Schemes for a New Investor

Investing in mutual funds is considered one of the best way to enter the financial markets and to gain the needed exposure. Mutual funds today are the only category of investment products that a retail consumer can use to effectively beat inflation while growing his wealth. People always talk about best mutual funds. But what’s best for one person may not be the best for the other.

There are no best mutual funds for everyone!

It’s true that there are no best mutual funds for everyone. There are top-performing mutual funds in the market but what best suits an investor may or may not be a part of the top funds. To arrive at a mutual fund portfolio for an individual, there are many things to consider. As a beginner, you will have to do your homework before you start investing in mutual funds.

Things to know before you start mutual funds investing

Purpose of investing: Have a proper goal defined. Investing without a goal is like running around in circles. If you do not have any specific purpose and you are investing for accumulating wealth then your goal is to create wealth.

Investment horizon: In how many years do you want to achieve the goal? If you are unable to define the number of years then at least categorize your goal in short and long-term. Any time below 3 years is short-term and 5 and above is considered long-term.

Ability and willingness to take the risk: Ability and willingness to take risk are two different things. Willingness to take a risk might be high, but sometimes the ability to take risk is low. Let’s say, for example, you have a family dependent on you and you are the only earning member of the family. Also, you are looking at high returns and are willing to take a risk to earn high returns. Here the ability to take risk is less than the willingness to take the risk. Define how you are positioned on the risk-o-meter before you start investing.

Few must remember things as investors

Whether you go with an advisor or decide to invest on your own, you have to remember a few things.

Asset Allocation: Do not invest your entire money in equity or debt. Strike a balance between the two. Usually, people follow 100-age principle to decide on asset allocation. Let’s say you are 30 years old, then invest 70% of your assets in equity and 30% in debt.

Long and short-term investing: Invest both for short and long term. Equity should constitute long-term investing. For the short term, invest in debt as its liquid and money invested in debt funds can be redeemed with no penalties.

Saving and investment: Any saving is not considered small. Even a Rs 100 saved is considered saving. Investing that Rs 100 is considered investing with mutual funds. In mutual funds, one can start investing with an amount as low as Rs 100 through SIP.

Use expert advice: For physical wellbeing one goes to the doctor regularly. Similarly for financial wellbeing, going to the financial advisor is good. If you aren’t an expert in financial matters like investing then take the help available to you in the form of advisors. They aren’t called experts for no reason.

Top performing mutual funds

However, there are top-performing mutual funds in the market and most of these will be a part of your portfolio depending on your goal, investment horizon, and risk-taking ability.

RankFund NameReturns (5Yr)Growth of Rs 1 lakh in 5 Yrs*Category Invest
1Reliance Small Cap Fund38.13%₹ 5.02 lakhsSmall CapInvest
2SBI Small Cap Fund36.54%₹ 4.74 lakhsSmall CapInvest
3 HDFC Small Cap Fund25.62%₹ 3.12 lakhsSmall CapInvest
4Mirae Asset Emerging Bluechip Fund33.87%₹ 4.29 lakhsLarge and Mid capInvest
5Axis Focused 25 Fund21.85%₹ 2.68 lakhsFocusedInvest
6Canara Robeco Emerging Equities Fund34.52%₹ 4.40 lakhsLarge and Mid capInvest
7Tata Equity P/E Fund28%₹ 3.43 lakhsValueInvest
8L&T Midcap Fund31.58%₹ 3.94 lakhsMid capInvest
9HDFC Mid-Cap Opportunities Fund29.11%₹ 3.58 lakhsMid CapInvest
10SBI Focused Equity Fund23.07%₹ 2.82 lakhsFocusedInvest
*Comparing returns for ₹ 1,00,000 invested 5 year(s) back


Invest in mutual funds with and get an expert advice. Happy Investing!


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