Mutual funds are one of the most popular investment options for Indians. They offer the opportunity to invest in a diversified portfolio of stocks and bonds, which can help reduce risk and increase returns. However, with so many mutual funds to choose from, it can be challenging to find the right one. In this article, we will discuss how to choose the best mutual funds in 2024.
Before we begin, let’s understand what mutual funds are. Mutual funds are a type of investment vehicle that pools money from multiple investors to buy securities. The fund is managed by a professional fund manager who decides which assets to invest in and when to buy and sell them. The return you get on your investment depends on the performance of the underlying assets.
Here are some factors to consider while choosing the best mutual funds in 2024:
1. Risk and Return
All mutual funds come with some level of risk. As an investor, you need to decide the level of risk you are willing to take. Mutual funds with higher risk tend to offer higher returns, but they are also more volatile. On the other hand, funds with lower risk provide stable returns but lower returns in the long run.
2. Investment Objective
Mutual funds come with different investment objectives, such as growth, income, or balanced. Growth funds invest in stocks of companies that are expected to grow significantly, while income funds invest in bonds and fixed income securities that generate regular income. Balanced funds invest in a mix of both stocks and bonds.
3. Fund Manager
The fund manager is responsible for managing the mutual fund. They decide which stocks and bonds to invest in, and when to buy and sell them. A good fund manager can make a significant difference in the returns you get from your investment.
4. Expense Ratio
Expense ratio is the amount charged by the mutual fund company for managing the fund. It includes the fund manager’s fee, administrative expenses, marketing expenses, etc. A high expense ratio can eat into your returns, so it is essential to choose a mutual fund with a reasonable expense ratio.
5. Performance
The performance of the mutual fund in the past is a good indicator of how it is likely to perform in the future. However, past performance is not a guarantee of future performance. Hence it is essential to choose a fund that has a consistent track record of good performance.
Based on the above criteria, we have shortlisted the best mutual funds in India in 2024. Please note that these are not recommendations, and investors should do their research before investing in any mutual fund.
1. Axis Bluechip Fund
Axis Bluechip Fund is a large-cap equity fund that aims to generate long-term capital appreciation by investing in blue-chip companies. It has a track record of consistently outperforming its benchmark, and its fund manager has a proven track record of managing funds successfully. The fund has an expense ratio of 1.77%.
2. SBI Small Cap Fund
SBI Small Cap Fund is a small-cap equity fund that aims to provide long-term capital appreciation by investing in small-cap companies with strong growth potential. It has outperformed its benchmark consistently in the last few years and has an expense ratio of 1.83%.
3. HDFC Hybrid Equity Fund
HDFC Hybrid Equity Fund is a balanced fund that invests in a mix of equity and fixed income securities. It aims to provide long-term capital appreciation while also generating regular income. The fund has consistently outperformed its benchmark over the last ten years and has an expense ratio of 1.59%.
4. ICICI Prudential Corporate Bond Fund
ICICI Prudential Corporate Bond Fund is a debt fund that invests in high-quality corporate bonds with a maturity period of up to three years. It aims to provide regular income while maintaining a low-risk profile. The fund has consistently generated attractive returns and has an expense ratio of 0.49%.
5. Aditya Birla Sun Life Tax Relief 96 Fund
Aditya Birla Sun Life Tax Relief 96 Fund is a tax-saving fund that aims to provide long-term capital appreciation through investments in equity and related instruments. It has consistently outperformed its benchmark over the last ten years and has an expense ratio of 1.96%.
In conclusion, mutual funds are an excellent investment option for people looking to diversify their portfolio and generate long-term returns. However, it is essential to consider all the factors mentioned above before investing in any mutual fund. Investors should also be aware of the risks involved in investing in the Indian financial market and should gauge all the pros and cons of trading in the market.
Summary:
Choosing the best mutual funds in India that suits your portfolio is a challenge, but it is a rewarding investment option. To make an informed decision, you need to consider various factors such as risk and return, investment objective, fund manager, expense ratio, and performance. Apart from these fundamental factors, it is wise to remain updated with the market trends and keep a close eye on the market performance of the mutual funds. We have listed Axis Bluechip Fund, SBI Small Cap Fund, HDFC Hybrid Equity Fund, ICICI Prudential Corporate Bond Fund, and Aditya Birla Sun Life Tax Relief 96 Fund as the best mutual funds to consider in 2024. However, before investing in any mutual fund, investors must gauge all the pros and cons of trading in the Indian financial market and make the right call.
