BEST MUTUAL FUND FOR 2024
Welcome to my page, my dear friend, you are at the right place where you get all your doubts and query at your fingertip.
Investing in the stock market is not an easy task, especially for those who are new to the world of investing. However, one of the best ways to get started is by investing in mutual funds. Mutual funds have been a favored investment option for more than 100 years, and they have become one of the most popular investment vehicles in the world.
In this blog post, we will dive into the world of mutual funds and discuss why they are a great investment option for both new and experienced investors. We will start by explaining what mutual funds are and how they work. We will also look at the history of mutual funds and how they have evolved over time.
Next, we will explore the different types of mutual funds that are available in the market. We will discuss the advantages and disadvantages of each type of mutual fund, and help you determine which one is best for your investment needs.
Finally, we will reveal the best mutual fund for 2023. We will analyze the performance of different mutual funds and help you choose the one that is likely to give you the highest return on your investment.
We will break down the concept of mutual funds in an easy-to-understand manner, and help you make informed decisions about your investments. So, let's dive into the world of mutual funds and discover why they are such a valuable investment option.
In this blog, we discuss the following topics
So as you all know, I’m sure that you must be heard or seen “Mutual Fund Sahi Hai” in the advertisement, and maybe you searched and are interested to explore the topic, so worry not I’m here for you. A to Z i will explain and try to solve all.
Also Read:
Why Mutual Funds Are Great Investment Options
These days, mutual funds have become a popular investment option for many investors. They offer a simple and effective way to diversify your investment portfolio and can provide a steady source of income. In this section, we will discuss why mutual funds are a great investment option for the year 2023. Not only for the year 2023 but for the upcoming and for a decade as I think, because mutual funds have that type of potential, and it's already given a result in the past decade if you have invested in the last 5 years you are at the top level,
Mutual funds are simple and easy to use No more complex calculations and high risky as compare to stock.
Diversified Investment Portfolio.
Mutual Funds offer a diversified investment portfolio. By investing in a mutual fund, you are investing in a collection of different stocks, bonds, or other securities. This diversification helps to reduce the overall risk of your investment portfolio. As a result, even if one security performs poorly, the impact on your overall investment will be minimized. So I hope it's clear to you,
You might hear the wise words “Do not Put all your eggs in a single basket”. Because by mistake if a basket falls then you lose all your eggs, and you can not do anything. But if you diversify your eggs into many baskets, then the chance of falling off a basket is less than comparatively one basket.
In Summary, I want to make you understand that, You can minimize your losses by diversifying your investment to many securities.
Managed By Professionals
Mutual funds are managed by experienced fund managers who have the knowledge and expertise to make informed investment decisions. They constantly monitor the market and make changes to the portfolio as needed to optimize performance. This professional management ensures that your investment is in good hands, and you do not have to worry about the day-to-day management of your portfolio.
Fund managers are experienced professionals who have access to a wealth of research and analysis, and they can use this information to make informed investment decisions on your behalf.
Managers take care of all your investment, and you are relaxing at home, you do not have to worry about that because they have studied the market and have many years of real market experience.
Easy to Buy Sell
Mutual Funds are easy to buy and sell. You do not need to be a rocket scientist or do many complex calculations to buy and sell. Investing in mutual funds is relatively simple, and you can buy and sell them through a brokerage account or directly from the fund company. Additionally, most mutual funds have a low minimum investment requirement, making them accessible to a wide range of investors. Minimum Investment means you can start your mutual fund's journey with only 100rs.
You can do weekly, Monthly SIP to Secure your Future.
Overall, mutual funds are a great investment option for 2023 due to their diversified portfolio, professional management, and ease of access. By investing in a mutual fund, you can achieve a higher level of diversification in your portfolio, enjoy the benefits of professional management, and easily buy and sell your investments as needed.
2. What are mutual funds, and how do they work?
Mutual funds are, either you invest directly into the market or if you don't have time, knowledge, or capability, then also it's not a problem, You'll give money to someone, and he'll invest for you in equity or any other financial asset, so, this will be known as Mutual Fund.
Either you invest or someone invests for you in mutual funds. A fund manager is a person who invests for you. It is very simple to understand.
Mutual funds are Collections of money (funds) from many different investors that are invested in a variety of assets such as stocks, bonds, and other securities. The money is managed by professional fund managers who make investment decisions on behalf of the fund's investors.
When you invest in a mutual fund, you're buying shares in the fund. The price of the shares is based on the net asset value (NAV) of the fund, which is the total value of all the assets in the fund minus any liabilities, divided by the number of shares outstanding.
NAV value Daily update according to the market performance and follow the market.
So when you invest in mutual fund you will see NAV value, and you get the NAV according to your investment value.
For example - If you invest in ABC mutual fund let say 500rs, And that day NAV is 250rs then you get 2 NAV of the ABC Mutual Fund.
NAV value update daily on the day end of trading day, so your investment goes up or down according to the market performance on that particular day.
Mutual funds can be a great way to diversify your portfolio because you're investing in a variety of assets, rather than just one or a few. This can help spread your risk and reduce the impact of any one asset's performance on your overall portfolio.
Another advantage of mutual funds is that they offer liquidity. Unlike some other types of investments, such as real estate or private equity, mutual funds can be bought and sold on a daily basis, which makes it easy to access your money when you need it.
Mutual funds have liquidity. Liquidity means ? wait -wait I'm explaining the term.
So Mutual funds have alots of customer that are investing the money on different asses class. Mutual funds have the largest volume means on the same day and same time when one person is thinking of sold their holdings and assets on the same time another one wants to invest the money, or he wants to buy the asses class for some reason.
SO this cycle runs and never ends, and because have mutual funds have many customers they never face any issues like a customer wants to sell his NAV, but there are not any buyers on the market.
So Mutual funds offer liquidity and this is the best advantages of mutual funds, because whenever you feel, or you want to sell you can sell.
In summary, mutual funds are a popular investment option for those who want to diversify their portfolio and take advantage of professional management. They offer a variety of investment options and can be easily bought and sold, making them a convenient way to invest.
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3. History of Mutual Funds.
The first mutual fund was established in 1924 by the Massachusetts Investors Trust, which was designed to allow small investors to pool their money together and invest in a diversified portfolio of stocks and bonds.
They've become very popular because they allow people to invest in many things at once, reducing risk. Mutual funds are easy to buy and sell, and they've evolved over time to keep up with changes in the investment world. Today, mutual funds are still a great way for everyday people to invest in a diverse range of assets.
As these details are not much important because you are not going to make money by getting all these facts and details
But you have to know at least what is this and how its work and history because you are working on that thing.
IMPORTANT Point is You have to Know the History of The Mutual funds that you are investing, when this mutual funds started, by whom this is managed by and the history of funds managers and also check the performance of the mutual funds in past atleast 3 years.
4. Types OF Mutual Funds
Mutual funds can be categorized into various types based on their investment objectives, asset classes, investment strategies, and other criteria. Here are some common types of mutual funds:
So there are many more, but you do need to know all because they are not built for the retail investor, so worry not.
Also, when you are reading or checking for mutual funds I’m sure you heard that
Large-cap Funds, Mid-Cap Funds, Small-Cap Funds, Growth Funds, Value Funds, and Sector Funds.
So you are now confused that what is this if these are not the Types of Mutual Funds.
So, Mutual funds can be categorized based on the size of the companies they invest in, investment style, and other criteria. Here are some common types of mutual funds:
Large-cap Funds, Mid-Cap Funds, Small-Cap Funds, Growth Funds, Value Funds, and Sector Funds.
Every type of Mutual fund has the following categories, if we are talking about Equity Mutual Funds Then We have options to choose which category of mutual fund
For example, - Large-cap Equity Mutual Fund or Small Cap Equity Mutual fund.
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Now, let's elaborate the Types of Mutual Funds.
What is Equity Mutual Funds
Equity mutual funds are also known as stock funds or equity funds.
So in the Equity mutual funds are a type of mutual fund that invests primarily in stocks of companies with the aim of generating long-term capital appreciation. Equity mutual funds are also known as stock funds or equity funds.
Now it can be categorized based on the size of the companies they invest in, investment style, and other criteria. Here are some common types of equity mutual funds:
Large-cap funds: These funds invest in stocks of large-cap companies, which are typically well-established and have a large market capitalization.
Mid-cap funds: These funds invest in stocks of mid-cap companies, which are smaller than large-cap companies but have the potential for higher growth.
Small-cap funds: These funds invest in stocks of small-cap companies, which are often newer and have a smaller market capitalization than mid-cap and large-cap companies.
Value funds: These funds invest in stocks of companies that are considered undervalued by the market, with the potential for a higher return when the market recognizes their true value.
Growth funds: These funds invest in stocks of companies that have strong growth potential, with the aim of generating higher returns in the long run.
Sector funds: These funds invest in stocks of companies belonging to a specific sector, such as healthcare, technology, or energy.
Which is the best Equity mutual Funds or Debts Funds ??
Important Note:-
When you invest in equity mutual funds, you take a bigger risk than investing in debt mutual funds because the stock market can change quickly and is not easy to predict. However, equity mutual funds can give you the chance to make more money in the long run. Before investing in equity mutual funds, think about your goals, how much risk you are willing to take, and other important factors.
What are Debt Mutual Funds
Debt mutual funds are a type of mutual fund that invests primarily in fixed-income securities such as government bonds, corporate bonds, and money market instruments. These funds aim to generate regular income for investors while minimizing the risk of loss of capital.
Debt mutual funds are also known as fixed-income funds or bond funds. They can be categorized based on the maturity of the bonds they invest in, the credit quality of the bonds, and other criteria. Here are some common types of debt mutual funds:
Liquid funds: These funds invest in short-term money markets instruments such as treasury bills, commercial papers, and certificates of deposit, with a maturity of up to 91 days.
These funds are ideal for investors who need a high degree of liquidity and safety.
Short-term funds: These funds invest in fixed-income securities with a maturity of one to three years. They offer a slightly higher return than liquid funds but carry a slightly higher risk.
Income funds: These funds invest in a mix of government bonds, corporate bonds, and money market instruments with a maturity of up to five years. They offer a higher return than short-term funds but carry a higher risk.
Dynamic bond funds: These funds invest in a mix of short-term and long-term bonds, with the flexibility to adjust the portfolio based on changing market conditions.
Gilt funds: These funds invest primarily in government bonds, which are considered to be the safest fixed-income securities. They offer a low return but carry a very low risk of default.
Important Note:-
Debt mutual funds are considered to be less risky than equity mutual funds, as fixed-income securities are considered to be less volatile than stocks. However, debt mutual funds are not entirely risk-free and can be affected by factors such as interest rate changes, credit risk, and liquidity risk.
What are Balanced mutual Funds
Balanced mutual funds are a type of mutual fund that invests in a mix of stocks and bonds to achieve a balance between risk and return. These funds aim to generate both capital appreciation and regular income for investors.
Balanced mutual funds invest in a diversified portfolio of stocks and bonds, with the allocation of funds between stocks and bonds vary depending on the fund's investment objective.
These funds are also known as hybrid funds.
Conservative balanced funds: These funds invest mostly in bonds and a smaller percentage in stocks. They are suitable for investors who want a balance of stability and long-term growth.
Aggressive balanced funds: These funds invest mostly in stocks and a smaller percentage in bonds. They are suitable for investors who are willing to take more risks for potentially higher returns.
Balanced mutual funds can be an excellent investment option for those who want to balance the potential for higher returns of equity mutual funds with the stability of debt mutual funds. These funds can be customized to match the investor's risk tolerance and investment goals.
Important Note:-
Investing in balanced mutual funds can be less risky than investing in equity mutual funds, as the inclusion of bonds can provide a cushion against market volatility. However, it's important to evaluate your investment goals, risk tolerance, and other important factors before investing in any type of mutual fund.
4. What is Index Mutual Funds
Index funds are a type of mutual fund that tracks a specific stock market index, Such as if you take the example of the Indian market then It is NIFTY 50 or BSE Sensex.
First of all, i want to say and this the truth If you want to make money in long run and you do not want any burden on your head tension free then my friend this funds is for you.
Index Funds is my Favourite among of all, I regularly invest in this.
You know one thing Only this fund can beat any funds in long run, It is Simple no expense ratio nothing complex, even a layman can understand.
That's why i always suggest to all my friend and family to invest in Index Fund.
Instead of actively managing the fund's investments, index fund managers aim to match the performance of the underlying index by investing in the same stocks in the same proportion as the index.
What is the Advantage and Disadvantages of Index Mutual Fund.
Pros:
Low expenses: Index funds generally have low expense ratios compared to actively managed funds, as there is less need for a fund manager to make individual investment decisions.
Diversification: By tracking a specific index, index funds offer instant diversification across a broad range of stocks. This can help mitigate the risk of investing in individual stocks.
Consistent returns: Index funds tend to perform in line with the market they track, which can provide more consistent returns over time.
Cons:
Limited flexibility: As index funds track a specific index, they are limited in their investment options and cannot take advantage of potential opportunities outside of that index.
No active management: While low expenses are a benefit, index funds do not have the benefit of active management that may be able to outperform the market.
Market fluctuations: Index funds are subject to market fluctuations and may experience periods of volatility or losses.
In India, the popularity of index funds has grown in recent years, with the NIFTY 50 and BSE Sensex index funds being among the most popular. For example, the Nippon India Index Fund - Nifty 50 Plan aims to track the performance of the NIFTY 50 index and has consistently performed in line with the index over time. This provides investors with an easy way to invest in a diversified portfolio of large-cap Indian companies at a low cost.
5. What is Sector Funds
Sector funds are a type of mutual fund that invests in a specific sector or industry, such as technology, healthcare, or energy. These funds aim to provide investors with exposure to a particular sector and take advantage of potential growth opportunities within that sector. When you see any opportunity in any particular sector then you decided to invest and hoping that particular sector will rise in the upcoming days.
For Instance, You are working as a high post of Medical and Healthcare and something is invented and you know that invention can boost this Sector, So you invest in it.
You are not investing in a particular company of the sector like you are buying a stock of any company, you are investing on the whole sector
As you know these days Technology is on the peak and you know Everything is going to change in a Decade But you dont know What is going to and which Company is going to lead, SO you invest in Whole Theme Idea.
There are different types of sector funds, including:
Technology sector funds: These funds invest in companies that are involved in the development, manufacture, or distribution of technology products or services.
Healthcare sector funds: These funds invest in companies involved in the healthcare industry, including pharmaceuticals, medical devices, and healthcare providers.
Energy sector funds: These funds invest in companies involved in the production or distribution of energy, including oil and gas companies.
Sector funds can provide investors with the potential for higher returns compared to broad-based index funds, but they also carry higher risk. This is because the performance of the fund is heavily dependent on the performance of the specific sector it invests in.
For example, if a technology sector fund invests heavily in a few large technology companies, and those companies experience a downturn, the value of the fund may also decline. On the other hand, if the technology sector experiences significant growth, the fund may see higher returns.
Investing in sector funds can be a way to diversify a portfolio and take advantage of potential growth opportunities in specific industries.
However, it's important to carefully consider your investment goals, risk tolerance, and other factors before investing in any type of mutual fund, including sector funds.
6. What is Equity Linked Savings Scheme (ELSS)
It is also Known as Tax Saving Scheme, it is a type of mutual fund that provides tax benefits to investors. These funds primarily invest in equity and equity-related securities, with the goal of generating long-term capital appreciation for investors.
The investments made in tax saving funds are eligible for a deduction from taxable income under Section 80C of the Income Tax Act in India. This means that investors can claim a deduction of up to Rs. 1.5 lakh from their taxable income by investing in tax saving funds.
Tax saving funds have a lock-in period of three years, which means that investors cannot redeem their investment before the completion of the lock-in period. However, this can be beneficial for investors as it encourages long-term investing and can lead to higher returns.
Tax-saving funds can be a good investment option for investors who are looking to save taxes while also generating potential returns from the stock market. However, it's important to carefully consider your investment goals, risk tolerance, and other factors before investing in any type of mutual fund, including tax-saving funds. It's also important to note that while tax benefits are a major advantage of these funds, they should not be the sole reason for investing in them.
5. Best Mutual Funds For 2023
I know You are waiting for this, What is the best mutual fund for 2023, which is the best mutual fund for sip and all your doubts I'm going to clear in this blog.
I'll tell you about Large cap, Small Cap, Mid-cap, Flexi fund, Debt fund, Hybrid fund, and many more categories of the mutual fund.
Best mutual funds for this year.
You can decide yourself, I'll help in comment box. Let's start.
Hi Guys! Today, I'll solve your mutual funds' problem. Why? Today, I'll tell the top mutual funds in each category.
1. Equity.
In Equity, I'll tell you about large-cap funds, mid-cap funds, small-cap funds, flexi-cap funds, index funds.
In debt funds, I'll tell about short-term funds & liquid funds. Debt in long term is not sensible. So, I'll not tell.
In a hybrid fund, We'll see Balanced advantage fund. Today, you'll get to know about every category.
2 On what basis I have chosen these funds.
Let me tell you.
First Criteria, Fund's Performance For at least 3 years, fund must meet benchmark performance.
Second, expense ratio is not more than 1%. We, local People, need everything at cheap rates.
Then age of funds should be at least 5 years. We don't want to take risk in new funds. We want good funds which will give profits to us.
Fourth, At least Rs 5000 crores AUM must be there. I have chosen direct funds, not regular ones. Why do extra expenses?
Let's start with Equity Mutual Funds.
Equity-Mutual funds, as the name goes, Fund manager will put 65% money in Equity, or in equity-related schemes, that money will be in equity only.
You must hold Equity Mutual funds for 5 years, then only it will meet the benchmark, and will get optimum performance. Don't choose equity for 2-3 months.
Large Cap Mutual Fund
The first category is Large Cap Mutual Funds.
Again, it is also simple. India's Top 100 Companies will be chosen by fund managers to invest money.
What is the benefit of choosing top companies? You'll get the stability as they're good players, also big ones and give sustainable returns with normal growth, not sudden.
They give one of the best returns in long term. It is much better in recession because they are big companies and don't fall down easily. Also, they're less volatile. Hence, It is good.
The best part is that it is less risky. Every mutual fund has its own characteristics. None is good or bad in them. It totally depends on your needs. You can decide by doing a risk analysis.
You can choose any of the suggested mutual funds.
Important Data are as on 21 February 2023, it may change as market performs.
Then comes the mid-cap mutual funds.
Mid-Cap Mutual Funds
What is a mid-cap mutual fund?
Those who invests in mid-cap companies. You see how simple finance is. Terms are explaining their meanings. But it's not the same with Adani's case. Let's keep jokes apart. Let's come to the point.
Following are the mutual funds
- Axis Mid-Cap Direct Plan Growth
- Axis Mid-Cap Direct Plan Growth
Mid-cap category belongs to companies whose market capital is from 5000 cr to 20,000 cr.
These are fast-growing companies. They perform better than large-cap ones.
Companies become large-cap from mid-cap. So, you can invest in those mid-cap companies which will become large-cap companies in future.
They have more volatility than large-cap ones, but lesser than small-cap companies. Their growth is better than large-cap ones, but lesser than small-cap ones.
IMPORTANT :-
One more thing, Everything I am telling is researched by us, I'm telling after research, so, it do not trust blindly as I'm human and mistakes can be there, so before putting or investing money do your own research.
Small-Cap Mutual Funds
Now, comes Small-cap Mutual funds. Fund managers choosing small-cap particularly Small-cap mutual funds.
From the bottom companies of NIFTY, the top 250 companies come under this.
They give very high growth returns. They are very aggressive. Fund managers watch out for them. If you want to invest in small-cap mutual fund is the best option, studying small caps take a long time. They're highly volatile & very risky. If you invest in small-caps using these mutual funds, it makes a lot of sense.
Then comes Flexi-cap mutual funds.
Flexi Cap Mutual Funds
This is very interesting because In this, the fund manager invests equally in large-cap, mid-cap, and small-cap. He will invest accordingly. It makes sense a lot of times. As returns remain stable in this. It is less volatile & aggressive at the same time. He acts diplomatically every time. He uses diplomacy to solve every problem.
Index Mutual Funds
Finally, we have Index Mutual funds in equity. Which is the best according to me.
If you're confused & have no idea of stock markets then my friend go for index funds, they're safe, They give some of the best returns and if you're still confused about stock markets, Don't worry, I'm here for you, You know that.
Let me tell you the secret of Index funds, they obviously invest in Nifty or Sensex, in the top 30 or 50 companies. 89% of the large-cap mutual funds are unable to bite the index.
This is a fact. Majority of portfolio or fund managers in the world are unable to beat the index. If you beat the index, which is very easy, You will win the game. Let's see two most strong index funds.
Debt Funds
Let's come to debt funds. What are debt funds?
Equity fund, investing in equity or stock market Debt funds have different market Like Debentures, bonds, where there is fixed security, you'll invest money, they will give you returns in fixed amount. The return of interest is already decided. That bond can sold in the secondary market. That is known as the debt market.
If you're investing in a debt mutual fund, the money you're giving to the fund manager he is investing your money in debentures & bonds. For short term, this is one of the best things you can invest in. It's very safe. A few debt funds show you high returns you'll like to invest in them, but the problem is that they're risky. and if a recession happens tomorrow a great many times, the risky debt fails.
It's possible & has happened also. Whenever you choose a debt fund, be sure that they have invested in good debt instruments If you don't have the patience & knowledge, then choose the debt funds suggested by me.
Let's start with short-term debt fund, It's best if you want to invest for 1-3 years. and you want to be safe and risk-free.
Liquid Funds
Now, let's come to liquid funds. If you really want for very short-term, like in liquid fund, fund managers invest in the fund which is for 91 days, approximately 3 months.
If you want for a very short period, then liquid funds are for you, my friend.
For Ultra short term, this is really good.
Hybrid Funds
Hybrid, it is mixture of equity and debt. So, this is a hybrid mutual fund. If you look for a balance fund in this then it means there is balance in equity and debt So, risk and returns are also balanced. So, if you're looking for that balance in life, then this would be great for you.
It has two
THE END of my Blog, thank you so much for reading this.
In Conclusion, If you invest early and in right assets then you will become rich, so I would say Before investing or trading, Confirm twice what you do. So here are the best mutual funds for 2023, the best mutual funds to invest in 2023, mutual funds for beginners, mutual funds for Sip
If you have any doubts then worry not, I'm always there for you, DO comment.
Thank you So much
