Mutual Funds are considered as one of the best investment nowadays. Mutual Funds invest in securities such as bonds, stocks etc. There are professional fund managers who manages amount received for investment and invest that money in various securities. The main objective of such fund managers is to provide good returns.
There are various types of mutual funds based on different factors. If we divide mutual funds according to asset class, there are 3 types of mutual funds: (A) Debt funds, (B) Equity funds and (C) Hybrid Funds. When dividing according to structure mutual funds can be divided into two types: (A) open-ended mutual funds and (B) close-ended mutual funds
Advantages of investing in Mutual Funds
Experts and professionals' team
Money invested in Mutual funds are managed by fund manager, which has the team of experts for investing your money and to ensure you a great returns. Thus, chances of making good profits are higher.
Option invest on regular basis
Mutual funds provide you an option to invest your money through systematic investment plan (SIP), which can be considered as a major advantage for investing in Mutual funds. A person with middle class background or a person working on a fixed monthly salary can also invest easily through SIP and he/she doesn't have to gather a large amount for investing in mutual funds.
Complete Regulation and Control
All the mutual funds houses are regulated by Securities Exchange Boards of India (SEBI) and Reserve Bank of India (RBI). Also, all the fund houses have formed a self regulatory named the Association of Mutual Funds in India (AMFI).
Best Mutual Funds in 2021
It is the era of equity investment. In the situation that anybody will invest for long term. He can make great wealth, no uncertainty. In MF industry each MF schemes are better. Ordinarily MFs execution dependent on execution of MF holding stocks.
On the off chance that stocks progressed admirably, naturally MF will give a decent presentation. It's actual, barely any fund managers are applying acceptable procedure. They holds such stocks, which will perform better in sector insightful.
For instance, before 10 years nobody even consider pharma stocks and gold. Yet, it was something awful, when Corona virus made an advantage to pharma and gold investors. They are profited more.
Additionally, a decent MF is such. Which is giving predictable return each calendar year. Their might be 19–20 distinction. Nothing enormous contrast behind them.
Here is the list of Mutual Funds which are likely to give better returns in the year 2021 and furthermore for future.
Best Equity Mutual Funds
- Axis Bluechip Fund
- Aditya Birla Sun Life Digital India Fund - Growth-Direct Plan
- ICICI Prudential Technology Fund - Direct Plan - Growth
- Axis Small Cap Fund
- TATA Digital India Fund DIRECT Plan Growth
- ICICI Prudential Technology Fund
- Parag Parikh Flexi Cap Fund
Best Debt Mutual Funds
- ICICI Prudential Multicap Fund - Dividend
- IDFC Government Securities Fund-Constant Maturity Plan-Growth-Direct
- IDFC Government Securities Fund-Investment Plan-Growth-Direct Plan
- Aditya Birla Sun Life CEF - Global Agri Plan - Growth-Direct Plan
- ICICI Prudential Constant Maturity Gilt Fund - Direct Plan - Growth
Best Hybrid Mutual Funds
- HDFC Retirement Savings Fund- Equity Plan -Direct Plan-Growth
- Canara Robeco Equity Hybrid Fund - Direct Plan - Growth
- Mirae Asset Hybrid - Equity Fund - Direct Plan - Growth
- ICICI Prudential Equity & Debt Fund - Direct Plan - Growth
- DSP Equity & Bond Fund - Direct Plan - Growth
Best Large Cap Mutual Funds (Market Cap of more than Rs 20,000 crore)
- Aditya Birla SL India GenNext Fund (G)
- ICICI Pru Dynamic Plan (G)
- Reliance Growth Fund (G)
- SBI BlueChip Fund – Reg (G)
- Tata Equity P/E Fund (G)
Best Mid-cap Mutual Funds (Rs 500 crore to Rs 10,000 crore)
- L&T Midcap Fund – Reg (G)
- Canara Rob Emerg Equities Fund – Reg (G)
- Aditya Birla SL Small & Midcap Fund (G)
- Franklin India Smaller Cos Fund (G)
- Edelweiss Mid and Small Cap Fund – Reg (G)
Risks associated with Mutual Funds
Credit Risk
Credit risk in Mutual Fund is resulted from situation when the scheme issuer doesn't have enough money for paying the pre-defined interest and as a result, it fails to pay the promised interest.
Inflation Risk
Inflation risk is the risk of losing purchasing power. If the inflation increases at higher or same rate as your rate of returns, then it is called the risk of losing purchasing power. If the inflation increases at the same rate as your rate of returns, your purchasing power will be zero. If the inflation increases at higher rate than your rate of returns, you will be losing your purchasing power.
Disclaimer: These are the personal views of the author. Please do your own research before investing in mutual funds.
(Also Read: Systematic Investment Plan)
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