Stock markets have been on the roll. New highs are being hit continuously. Investors are looking for best mutual funds to invest in to ride the wave. The purpose of writing this article is to help you in selecting the best performing mutual funds to invest in at this time.
Nifty has already crossed a major milestone of 10,000 level while Sensex is around 32,000 level. Market analysts are predicting favourable environment for the markets going ahead. Targets of 30,000 for Nifty and 1,00,000 for Sensex are being projected in the coming 10 years.
This looks good for investment opportunities for the long term investors in stock markets. More and more people are opting for mutual funds for the investment. Mutual funds make relatively safe investments as compared to stock investing.
According to Economic Times, an internal study has shown that nearly 60,000 investors are entering the mutual fund market everyday. This is a great number. Nearly 50-60% new mutual fund portfolios are being created.
For new investors or beginners in the stock markets, choosing a good mutual fund scheme becomes a tough task. This is because there are hundreds of mutual fund schemes available in the market.
I have tried to short list the best performing mutual funds for the beginners.
How to choose best mutual funds to invest in ?
I have chosen these mutual funds on the basis of their long term past performance record, diversification and the track record of the fund house.
For long term performance record, we look at a minimum of past 3 years of returns generated by the mutual funds. These are top rated funds by well known rating agency ‘CRISIL’.
Past performance of a mutual fund is never a guarantee for its future performance too. So, it is advisable to keep reviewing your investment every six months or yearly.
You should shift out a fund scheme to another if it is not going according to your expectation.
As these are equity funds, so the market related risk are associated with the investment in these funds.
To minimise the risk, it is better to invest in the mutual funds via Systematic Investment Plan or SIP route.
Investing via SIP helps in avoiding the need to time the market and reduces the risk via rupee-cost averaging.
Best Investment Funds :
Principal Emerging Blue-chip Fund and TATA Equity Funds are diversified funds. They are owned by well known and established fund houses.
A diversified fund does not have exposure to a particular market sector like pharmaceuticals, infrastructure etc.
A sector specific fund may underperform if that particular sector does not do well in a time period.
Portfolio of a diversified fund involves different sectors.
Diversified mutual funds usually perform well in the long run and the risks are very less.
Kotak Select Focus, SBI Blue-chip Fund and Aditya Birla Frontline Equity funds are large cap funds.
Again, investing with large cap funds carries lower risk in stock markets. Their past 3 years returns show that they are consistent performers.
L&T Emerging Business Fund, L&T Midcap Fund and Reliance Small Cap Fund are midcap and small cap funds. Returns shown by these high yield investments seem very lucrative.
These kind of funds can generate very handsome returns in favourable market conditions but risks are equally large in adverse market conditions as compared to large cap funds.
Investor may take exposure of a fund in his portfolio of mutual fund investments but according to his or her risk profile.
These are the best mutual funds to buy at this time.
If you are planning to start investing in mutual funds, you can go ahead with any of these funds.
As I already stated, it always good to go via SIP route.