What are various types of mutual funds in India?

Types of mutual funds in IndiaWhat are various types of mutual funds in India?


In last 2 months there were several questions from readers saying they are new to mutual funds and they invest in such schemes. However, they are not aware what are different types of mutual funds available in India to invest. If you are a new investor in mutual funds and want to know the available types of mutual funds, this article is for you. If you are already investing, you would know which mutual funds suits you better.

Also Read: 10 Best Mutual funds where I am investing?

What are mutual funds?


Mutual fund schemes pool money from investors and invest in various stocks, securities and bonds depending on the investment objectives of the schemes. The entity which does this is called Mutual fund House. There are various mutual fund houses like HDFC Mutual fund, ICICI Mutual fund, Birla Mutual funds, Tata Mutual funds, Quantum mutual fund etc. These mutual fund houses float various mutual fund schemes. However, each scheme would have its own investment objective. Hence it is important for you to understand the various types of mutual funds in India and who should invest in such schemes.

Also Read: 

a) Types of mutual funds based on maturity


There are two kinds of mutual funds which an investor can invest based on maturity.

i) Open ended Schemes: These are mutual fund schemes which are open for subscription at any time during the year. Means you can purchase them on a daily basis based on their Net Asset Value (NAV) which is determined by mutual fund houses. There is no maturity date for such mutual fund schemes. These would continue to invest in the stock market, securities, etc. based on investment objectives. An investor can exit any time from such schemes by redeeming the mutual fund units. Based on NAV and exit terms, the redemption amount is paid to the investor.

ii) Close ended schemes: Close ended schemes are those where the maturity date is fixed. Generally there are two types of mutual funds in close end schemes.

  • Fixed Maturity Plans: These are mutual fund schemes where the maturity date is fixed and they cannot be redeemed during the period. However, as an alternate route, one can find a buyer in stock exchange and sell those units to them.
  • Capital protection plans: As the name suggests, these mutual fund schemes aim to do capital protection. Means their objective is capital protection and not taking much risk. Generally the returns are low in such MF schemes.

b) Types of mutual funds based on investment goals


There are investors whose investment goals are different. Some think they need regular income, but something that they want to grow their money over a period of time.

  • Growth option in mutual funds: Mutual fund schemes that aim to provide growth for the investment in the long term are growth mutual funds. If you are young and started earning in your career, this is the best way to invest. Here, such mutual fund schemes keep earning returns, however, they would be paid only during redemption or at maturity. If you want to invest money for 10 or 15 years, growth mutual funds can grow your money like anything. Do you know that ₹ 1,000 per month SIP can  make you Crorepathi in 15 years if you go thru growth option in mutual funds?
  • Dividend option in mutual funds: These schemes aim to provide income by way of dividends. Since dividends received from mutual funds are not taxable, this can be treated as one of the best ways to have tax free income. This is suitable for those who want to enjoy returns every year instead of enjoying at maturity.

Also Read: What are the pros and cons in Growth or divident option in mutual funds?

c) Types of mutual funds based on investment objectives


Now, I am coming to the main point. Though above gives a theme for you, below are real and various kinds of mutual funds where you need to think and invest. All these funds would have growth and dividend options. Also close ended mutual funds would be under Debt mutual funds segment which are indicated below.

1) Index Mutual funds: As the name indicates, mutual fund schemes that invests in Index (Sensex, Nifty, Banking Nifty, etc.) and would perform in line with the index are index mutual funds. However, MF houses would not be researching any particular stock here. They  blindly invest in Index stocks. Hence returns are limited.

Who can invest: If you  believe that markets are expected to go new highs in the coming years, this is one of the options to invest in mutual funds. This is for high risk appetite individuals. In the last 4 out of 5 years, the SENSEX has not raised much. SENSEX raised only in the last 1 year. Similarly, investors enjoyed returns only this year. Hence, one should consider such facts before investing in such funds.

2) Equity mutual funds: This is one of my favorite mutual funds. Equity mutual fund schemes invests more than 65% of its portfolio in equity related stocks and instruments and balance in debt securities and bonds. Such schemes would research and invest in a variety of stocks depending on investment objectives. There could be large cap funds, mid-cap/small-cap funds, sector based funds etc.

Who can invest: If you are young investor or married and have kids and looking to invest for a period of 10 to 15 years, these are the best schemes to invest. These are high risk to medium risk mutual funds. Annualised returns are expected between 12% to 18%, depending on the period and schemes chosen by you. You don’t need any separate investment plan for your kid either for education or for their marriage. If you invest in best mutual funds, you would be the winner. 

3) Balanced mutual funds: These are a kind of mutual fund schemes where it invests up to 65% in equity and remaining in debt securities. The advantage with these schemes is they can reduce stock exposure quickly and invest the majority in debt securities depending on market conditions. These are some what medium risk mutual funds.

Who can invest: Investors with a medium risk appetite, but expecting to get good annualized returns of 10% to 15% in long run of 8 to 10 years can invest in such schemes. Investors can also invest in the medium term of 3 to 5 years. Some of the top funds in this category are HDFC Prudence Fund, ICICI Balanced Fund and HDFC Balanced fund.

4) ELSS Mutual funds: If you are looking for tax saving in mutual funds, along with good returns, you should opt for ELSS (Equity linked Saving Schemes) Mutual funds.

Who can invest: ELSS funds provide higher returns along with tax savings u/c 80C up to a maximum of ₹ 1 Lakh. Lock-in period for such funds are 3 years. All other tax saving options have 5+ years of lock-in period. Hence this is the best way to invest for tax saving purpose. These are for medium risk appetite investors.

Also Read: What are the top ELSS-Tax Saving Mutual funds to invest?

5) Debt funds: All the funds indicated above carry some risk as they invest in stock markets based on their investment objective. However, if you are looking for low risk mutual funds, but want returns better than Bank FD, you can consider debt funds. Debt funds invests in debt related securities like commercial papers, Govt. Securities, bonds, etc.

Who can invest:  These funds are for low risk appetite investor. You can invest for 2 to 5 year time frame to get benefit out of these funds. The annualized returns would be between 8% to 11% which are better than bank FD Schemes.

6) Liquid funds: I had some surplus funds where I got variable pay from my company. However, I want to utilize such funds for any purpose in the short term of 3 to 6 months. If I deposit in a bank FD scheme, it would give only 2% return (For short term, 6% interest rate would give me 2% for 4 months). However, I have chosen liquid funds for parking short term money. I got returns of 3% in the short term of 4 month period.

Who can invest: If you have surplus money and want to invest for short term of 1 month to 6 month period, but do not know when you need it, this is the best place to invest. You can expect good returns from this compared to bank FD schemes. Alternatively, you can choose ultra short term mutual funds which have similar objectives.

Quicky summary by way of chart


Types of mutual funds in India-Chart

Readers, what type of mutual funds you are investing?

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Suresh
Types of mutual funds in India

Suresh KP

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99 comments

  1. Hello Sirs,

    I want to buy policy for my family, me n wife n girl child. Which should include medical, accidents, education plan together. Where I can invest for family policy 3000 per month. Or for each person I can invest 1000 per month. For 21 years. Plz suggest which policy I can buy.

  2. Thank you sir for your such informative article. I want to invest in ELSS for tax savings and also a lump sump money got as incentive in sector based funds. Please give your valuable suggestion.

  3. Respected sir,I am a medical student who can save Rs.1000 to 1500 per month. Can you suggest me a balanced mutual fund? I wud be grateful if u throw light upon these because I am very new. I would be very grateful if you provide the link about any previous article about the same topic.

  4. Hello Sir,

    Thanks for ur valuable feedback…. I am new to MF… I am NRI… I have two boys, one is 7yrs, 2nd is 2.5years.

    For my kids higher education, Pls suggest me some MF’s. As of now, i am putting amount in realestate, PPF everymonth 5k for each kid.

    I can investment 5k to 20k p.m for the next 5 years and also i can invest 1L p.a lumsum amount at a time.

    Kindly suggest some good profits MF’ with low risk to medium.

    Thanks,
    Venkat

  5. Dear sir,
    very good work and service to all of us. Please write a post titled ” HOW TO CALCULATE YOUR PROFITS IN MUTUAL FUNDS”
    looking into factors & data’s (list the data and factors) it will also be helpful to us. different types of calculating profits in mutual funds.

  6. Dear Sir,

    Am new to MF and am planning to invest 2000/pm on SIP for new born for next 10-15 years.
    Can pls guide which SIP would be the best option for my goal.

    Thanks in advance.

  7. sir,
    what`s your opinion about DSP BLACKROCK EQUITY NFO SERIES -1 REGULAR . I want to invest 25 k in this NFO. whether should I wait for another NFO or scheme.

    please guide me
    thanks

  8. Dear Suresh,

    Thanks for your guidance on Mutual Funds.

    Sir, I have other SIP of HDFC TOP 200 Rs. 13000/- and HDFC Equty Rs 12000/- My investment horizone is for 12+ years. Is my approch to salect equity fund is right or shall i need to focus on balanced and mid-small cap funds.

    I want to invest additional Rs 10000/- Pm I have shortlisted ICICI Pru Bluechip Equity Fund for the same. Is this fund similar to HDFC Equty? Shall i go ahead or you suggest some modifications.

    Thanks
    Ashish

    1. It depends on your risk appetite. If you are medium to high risk, you can consider more large cap funds. If you are medium risk taker, invest 50% in large cap and 50% in balanced funds.

  9. hi sir
    i m new in mutul fund i m planing to invest my 2000 (1000, 500, 500) in difrent mutul fund to 5 to 10 years for good return pls tell me good mutul fund to invest
    i m midum risk tekar
    thank you

    1. Since you are new to investment, my suggestion is to invest in balanced mutual funds to start with. 1) Invest in ICICI Balanced fund and HDFC Balanced fund. Keep some amount into recurring deposits also. 2) Once you are familar on how mutual funds operate, you can invest in large cap funds and diversified mutual funds. 3) If you can take some risk, you can invest in top 5 mid cap and small cap funds which I have recommended. But note that you should hold them for 8 to 10 years to get good returns. You can keep tracking every month on how your funds are progressing.

  10. Hello. I read many of your articles.
    I have a query, I am 22 yrs old and I earn around 20k. I am looking for good returns in long term but with moderate risk. My Parents don’t really like mutual funds as they invested in MetLife mutual funds and suffered heavy losses. Which type of mutual funds/other scheme would be beneficial for me?

    Thank you

  11. Hi Suresh,

    What is the difference between Dividend and Growth in Mutual funds? do we get any difference payout ?

    Thank you
    Kishore

  12. Hi Suresh,

    First thanks for your blog which is really very informative and helpful for all specially new investor…

    I am 32, get 44K salary pm, My expenses 15K pm. i have a LIC of 16371/-(Jeevan Anand) pa, Invested NSC of 15K pa & PPF of 10K pm, Please suggest my current investment is a good???

    Now planning to invest in Mutual Funds for 3 reasons. Child Education, Child Marriage & Retirement.

    My daughter age below 1 year. All these investment will be for 25 years.I want to invest in 35% in Mid & Smaller cap Fund, 25% in Large cap Fund, 20% in Diversified Fund & 20% in Balanced  Fund.

    It's OK or Can you suggest how to diversify the investment by selecting minimal mutual funds based on my investment appetite…

     Following are the funds that I selected. Can you please suggest me whether its a good investment for a long term or do i need to change in any of these funds/Remove them from portfolio???

    Mid & Smaller Cap Funds:-  (35%)

    1. HDFC MidCap Opportunities (G)- 1.5 K

    2. Franklin (I) Smaller Cos (G)- 1K

    3. SBI Magnum Midcap Fund (G)-1K

    Large cap Fund(25%)

    1. ICICI Pru Focused Bluechip Eqty (G)- 1K

    2. HDFC Top 200 Fund (G)- 1 K

    3. UTI Opportunities Fund (G)- 0.5K

    Diversified Fund(20%)

    1. Reliance Equity Opportunities – RP (G)- 1K

    2. UTI MNC Fund (G)- 1K

    Balanced  Fund(20%)

    1.  HDFC Prudence Fund (D)-1K

    2. ICICI Prudential Balanced Fund (G)-1K

    Warm Regards,

    Pankaj Kumar

     

    1. Good to see that you created best portfolio considering large cap, mid cap and balanced funds. Keep adding money / increase SIP going forward in large cap and mid-cap segment as you ar still 32, you can create good wealth in next 10-20 years

      1. Thanks for your valuable suggestion…
        Please suggest, Am i continue invest in current investment plan (PPF, NSC & LIC)??? And also suggest in large caps fund & Diversified fund which fund i am priority given for investment & which fund will be better result shown in long term goal.

        Thanks in advance.

  13. I am planning to invest in SIP Mutual fund. My plan is to 
    invest 5000 every month (3000 & 2000) into two different funds for next 10-15 years.

    Suggest me some good SIP mutual funds which doesn’t have high risk. Also let me know how to 
    invest in online since I am located abroad.

    1. Invest in these funds. 1) Large cap – HDFC Top-200 / ICICI Pru focussed blue chip fund 2) Mid-cap – HDFC Mid-cap opps fund / Franklin India smaller co’s / SBI Midcap fund 3) Balanced – You can check HDFC Prudence / ICICI Balanced fund. 

  14. Dear Suresh,

    Thanks so much for all your wonderful articles in yoru website. Cheers & keep up your wonderful work.

    I am a very strong believer of equity funds/markets and invest in equity through Mutual Funds (SIP route).

    I am 32 years old and have been investing in MF’s for the last 4-5 years and every year increasing my monthly investments. (started with 20, 25, 30 and so on)

     

    Right now I am investing 40,000 in the following funds; can you please review my distribution and share your thoughts if this is well diversified and also my choice of funds.

    I am a long term investor looking at another 6-8 years horizon.

     

    Birla SL MNC Fund(G)

     Diversified funds

    4,000

    10.0%

    DSPBR India T.I.G.E.R Fund

     Sector funds – Infra

    3,500

    8.8%

    HDFC Mid-Cap Opportunities Fund(G)

     Mid & small-cap funds

    4,500

    11.3%

    HDFC Top 200 Fund(G)

     Large-cap funds

    4,500

    11.3%

    ICICI Pru Exports & Other Services Fund

     Sector funds – IT, Pharma & Manuf.

    5,000

    12.5%

    ICICI Pru Focused BlueChip Eq Fund

     Large-cap funds

    5,000

    12.5%

    IDFC Premier Equity Fund

     Mid & small-cap funds

    3,500

    8.8%

    Reliance Banking Fund(G)

     Sector funds – Banking

    2,500

    6.3%

    UTI Opportunities Fund(G)

     Diversified funds

    2,500

    6.3%

    Franklin US Opp. Fund

    International funds

    5,000

    12.5%

     

     

    40,000

    100.0%

     

    Diversified funds

    2

    6,500

    16.25%

     Large-Cap funds

    2

    9,500

    23.75%

     Mid & small-cap funds

    2

    8,000

    20.00%

     Sector funds – Infra

    1

    3,500

    8.75%

     Sector funds – Banking

    1

    2,500

    6.25%

     Sector funds – IT, Pharma & Manuf.

    1

    5,000

    12.50%

     Sector funds – international

    1

    5,000

    12.50%

     

    40,000

    100.00%

     

     

    Look forward to hear from you on your comments.

     

    Thanks for your time!

     

  15. DEAR SIR

    I AM NEW IN MUTUL FUNDS .I WANT TO DO 3000 RS SIP IN MUTUL FUNDS .SO WOULD U SUGGEST ME WHICH MUTUL FUND I HAVE INVEST . I CAN INVEST FOR LONG TERM .IF I INVEST IN DIVERSIFID MUTUL FUND WOULD IT BE BETTER FOR ME OR HOW MUCH RETURNS I CAN EXPECT IN DIVERSIFIED FUNDS

    1. Since you are new to investment, my suggestion is to invest in balanced mutual funds to start with. 1) Invest in ICICI Balanced fund and HDFC Balanced fund. Keep some amount into recurring deposits also. 2) Once you are familar on how mutual funds operate, you can invest in large cap funds and diversified mutual funds. 3) If you can take some risk, you can invest in top 5 mid cap and small cap funds which I have recommended. But note that you should hold them for 8 to 10 years to get good returns. You can keep tracking every month on how your funds are progressing.

  16. Your choice is right. Since you are new to investment, my suggestion is to invest in balanced mutual funds to start with. 1) Invest in ICICI Balanced fund and HDFC Balanced fund. Keep some amount into recurring deposits also. 2) Once you are familar on how mutual funds operate, you can invest in large cap funds and diversified mutual funds. 3) If you can take some risk, you can invest in top 5 mid cap and small cap funds which I have recommended. But note that you should hold them for 8 to 10 years to get good returns. You can keep tracking every month on how your funds are progressing.

    1. Sir, please suggest me 5 top small/mid cap funds in which i can invest for 5-10 years. I can take low to medium risk.

  17. Hi Sir,

    I am planning to invest 5000/- per month for 10 years(atleast) on Franklin India Smaller Companies Fund (G) and 2000/- on Birla Frontline Equity Fund(G) for next 5 years. what do you suggest?

  18. Hello Mr. Suresh,

    I am new to Mutual Funds and I have read your article regarding what is mutual fund and types of available mutual funds. I like to thank you for sharing this knowledge which helped me a lot to have idea on this investment option.

    I also like to have advise from you regarding an one time investment of around Rs. 3 lacs for 4 years or something to get a good return. Please guide.

    1. Uday, There are several ways to do that 1) You can just do FD which is simple, low risk 2) If you can take some risk, you can invest in liquid funds / short term funds and do systematic investment plan to balanced funds for next 6-8 months. This way you can invest for 3-5 years and get good returns which would be higher than bank interest rates.

  19. hii sir.. I am 20 years old and i want to invest in Mutual funds. I have done a one month research in this. I have a long term vision of 12-15 years and thats why can take a moderately aggressive risk. And have decided to invest in SBI PHARMA FUND(G) Rs.500 p.m SIP and QUANTUM LONG TERM EQUITY FUND(G) Rs.1000 p.m. I can invest   upto 3500 p.m . 

    so, Please guide me if my selection is gud and also suggest me some more MF schemes to have a well round portfolio as i can devote Rs. 3500 p.m .   Please note that i have a long term view. Thanks in advance. 

    1. Selection is good. However for long term sector funds can turn negative. Instead invest in large cap funds like ICICI focussed blue chip fund or Birla sl front line fund etc.

    2. ok sir. I will proceed with investing in :

      1. Quantum long term equity Fund Rs. 1000 p.m

      2.ICICI focussed blue chip fund Rs. 1000 p.m

      3. HDFC Top 200 Rs.1000 p.m

      4. SBI magnum mid cap  fund Rs.500 p.m

      Is it ok sir for my long term plan of 12-15 years?? please tell me if my portfolio is too risky?

  20. Hi Suresh,

    I want to do one time inverstment of Rs.25000 for my 2 months old baby for period of 15 years. Please suggest me a good fund to invest . I am okay with risk funds and also please share your viwes on IDFC Premier Equity growth fund

    Regards,

    Prashanth

    1. Prashanth, Best way to invest in MF’s are SIP. since you want lumpsum invest in liquid or short term funds and then do STP to some to atleast 4-5 funds. Invest in these funds. 1) Large cap – HDFC Top-200 / ICICI Pru focussed blue chip fund 2) Mid-cap – HDFC Mid-cap opps fund / Franklin India smaller co’s / SBI Midcap fund 3) Balanced – You can check HDFC Prudence / ICICI Balanced fund. 

  21. Hi Suresh sir,
    I want to invest money 1000 Per month for 5-10 Year in mutual fund. I am first time investing in mutual fund. Which mutual fund i choose for good return? I am medium risk taker. Plz suggest.

    1. Invest in these funds. 1) Large cap – HDFC Top-200 / ICICI Pru focussed blue chip fund 2) Mid-cap – HDFC Mid-cap opps fund / Franklin India smaller co’s / SBI Midcap fund 3) Balanced – You can check HDFC Prudence / ICICI Balanced fund. 

  22. Hello Suresh Sir,
    Thanks for reply. My portfolio is
    1) icici pru value discovery
    2) icici pru dynamic plan
    3) icici pru focused bluechip
    4) hdfc top 200
    5) mirae asset India opportunities
    I selected growth option in all funds.
    I’m investing same amount in above funds through SIP. I’m looking for long term investment & I can take risk.
    Please give ur comment.

  23. Hello Suresh Sir,
    I’m planning to invest in following mutual funds through SIP.
    1) icici pru dynamic plan
    2) religare invesco mid & small cap
    3) hdfc balanced fund
    4) mirae asset India opportunities
    5) axis equity fund
    Is this right choice?
    Please give me ur suggestion?

  24. Hi Suresh,

    My age is 25 and i have ten months old kid. I am planning to do investments for his future. Please suggest me a good MF plan. Some suggests me do invest in RD and not in mutual Funds. Please guide me.

    1. Please see this article where you would get some idea. Based on this, pls post your query. https://myinvestmentideas.com/2014/06/6-best-child-investment-plans-in-india/

  25. Dear Suresh 

    Greetings for the day.

    I would be getting around 1700000/- in the month of August out of property sale.

    I made three options to invest this money:

    1. To invest in corporate FD scheems like Mahindra Finanace

    2. To invest in liquid Funds and take monthly dividend to tanfer to SIP of Equity MFOR Bank RD.

    3.  Invest entire money in to 2to 3 equity oriented MF's

    Could you please let me know which one would be better or any other way of investing.

    I am looking for 5 lks to be made in 3.5 yrs from now as we have plans of visiting UK in may 2017.

    Thanks and regards

    Ranganath.

     

     

     

     

  26. Hi Suresh,

    I dont huve much money to spare for Mutual Funds. At present I can invest 4000.00 per month in SIPs. I read some of your articles today and found your suggestions very much logical. 🙂

     

    My goal: To invest for long term, say 15 years, as my present age is 26.

    I want to go for growth funds 100% on equity

    Going by your articles have decided:

    To invest(buy) in 4 different SIPs next month (Aug 4,11,18,25) in Direct mode.

    Have decided for infrastructure and banking as 2 funds. Please suggest me 2 more  sectors.

    Also suggest me 2-3 funds in each of these 4 sectors.

    Your knowledge and way of delivery is awesome. Well done keep it up.

    Loop hole in the site:
    Cant right click the links to open in a new tab.

    1. Sammy, all links would open in seperate tab, so don’t worry. Invest in ICICI Pru focussed fund + Birla SL Frontline fund + Reliance Banking fund + HDFC Infra fund

  27. Hi Suresh, 

    I am investing 1000/ month in Axis long term equity fund, 2000/ month in HDFC-midcap opportunities (D) and Reliance small cap (1000/ month). I am also planning to start ICICI focused bluechip (2000/month), Birla sunlife infra fund (1000/month) and icici banking fund (1000/moth). My plan is to reedem any one or two funds in the next 3 years and contuning the rest based on the performance.

    I would like you to comment whether shall I go with these funds or shall i concentrate only any 2 funds with increased SIP amount. Please suggest me if you think any other fund instead of the above mentioned fund. Looking forward for your help.

      1. Thats why I am also planning to invest in ICICI pru foused blueship fund. Is this fund ok or else shall I choose any other fund. Also, please help on the infra and banking fund. Shall i go for that or instead of going both shall go any one of these?

        Thanks!

  28. Hi Suresh,

    Thanks for your good article. Recently I started investment in MF through SIP of Rs. 1000 in each fund. My portfolio consists of following funds.

    1. ICICI Pru Focused Blue chip Equity fund

    2. Birla SL Top 100 Growth fund

    3. SBI Magnum Mid cap Growth fund

    4. HDFC Mid cap Opportunities fund

    5. HDFC Balanced Growth fund

    Plz suggest your views on my portfolio. Plz tell me if any correction is required.

    Also plz let me know if I need Rs. 50 lacs after 10 years, how much I've to invest through SIP in which funds.  My age is 48 years. Thanks and regards

    Tamonash

     

     

     

      1. Dear Suresh,
        Thanks for your comments.
        Could you please suggest me if I have to achieve the target of Rs. 50 lacs in 10 years how much money I have to invest in MF through SIP and the name of the funds on which I have to invest?
        Looking forward to receive your valued suggestions.
        Thanks and Regards
        Tamonash

        1. Hi Tamonash, You can achieve this goal easily if you can invest in top performing funds with an annualised yield of 13%. So you need to invest Rs 20,000 per month for 10 years to achieve this. Invest in largecap or diversified funds like ICICI Pru focussed blue chip fund,HDFC Top-200, Birla SL Frontline fund, BNPP Equity fund, UTI Opps fund and Quantum long term equity fund. You can pick any of these funds.

          1. Dear Suresh,

            Thanks a lot for your valued guidance. I was eagerly wating for your suggestions.
            Thanks once again.

            Regards
            Tamonash

      2. Dear Suresh,

        Thanks for your comments.

        Could you please advise me that how much money is to be invested in MF through SIP to achieve the target of Rs. 50 Lacs in 10 years? And also if you could provide the names of the funds on which I have to invest that would be very helpful to me.

        Thanks and Regards

        Tamonash

      3. Hi Suresh,  I'm a recent days reader of your blog. Simply awesome suggestion. Actaully i'm working in a software filed. i'm home loan in LIC around 15K as EMI will detected. Apart from this, i can save around 10K after all other expenses. When i read your blog right starting from what is mutual fund, i had heard of these thing, frnd and other office collegues use to talk about this, but no one ready to inform clearly. i got some clarity on your blogs. now i got some idea abt this MF. i have a doubt, now in my saving 10K, i can use 7K to invest in the MF. As you suggested,in all the blogs, and for the readers, Tamonash invested in this 5 diff MF. if stared the same investment in this same Tamonash invested MF, my idea is

        ICICI Pru focussed blue chip fund – 1500
        HDFC Top-200 – 1500
        Quantum long term equity fnd – 1500
        SBI Magnum Mid cap Growth fund – 1500

        1.if i invest like this for 10 yrs , how much will i get profit ..?

        2. Will there be any risk ? Plz suggest. Your suggestion will be more help ful for me..

        Thank you Suresh.

  29. This is so far the best , simplified articale on MF i have read. Thanks to Suresh, it clears basic ideas of MF. 

    Regards,

    AMol

  30. Hi Suresh,

     

    Hope you are well !

     

    After Oct 2012 – you have not written any article on small business ideas so requesting you please suggest me Small and home based business ideas or small manufacturing ideas.

     

    Thanks

    Aklesh

    9819709152

  31. Iam  43 and a salaried person, I wanted to start investmenrt for my future, Cud you pls suggest me how i should begin. wheather I should start investing in FD or MF

     

    1. Hi Haridas, First start investing bank recurring deposits. Pls read articles on this blog about MF for next 2-3 months. Once you are familair you can invest in MF every month. All the best

  32. Hi Suresh,

    If possible to this question or as a separate article, could you please let us know the impact of the recent budget announcement of hike in long term capital gains tax rate from 10 to 20% and the tenure from 1 to 3 years for the debt mutual funds? And also does this impact all the debt funds (liquid, short term, ultra short term ..etc) ?

  33. Hi , 

    I am looking forward to investing in Balanced and Equity MF .I can invest upto 15000 Per month for the next 6-8 years.Can u suggest me 5-6 MF (A mix of both Low, Medium,High Risk) where I can invest through SIP. 

     

    1. Hi Kapil, 1) For balanced funds (low risk), invest in ICICI Balanced fund and HDFC prudence fund 2) For large cap funds (medium risk) – Invest in ICICI focussed blue chip fund, HDFC Top-200 and Quantum long term equity fund 3) For high risk invest in mid cap funds like HDFC mid cap opps fund, Franklin India smaller companies fund etc.

      1. Thanks a lot for your suggestion.

        One thing I wanted to ask is ..do we continue investing in these same funds for 5-6 years continuosly or we change one or two of them as per the performance ?

  34. Hi,

    I want to startinvestment in following.appreciate your comment on same.
    1.Reliance equity    2.icici pru balanced

    I am high risk investor. investment for 5-7 years.

    Regards,

    Kunj

    1. Kunj, If you are high risk investor, look for mid cap funds and sector based funds in Infra and banking sector. Pl ssee my latest articles about good funds in this category.

  35. Thanks for your comment, may I know in equity funds in which fund I can invest 1000/- per month sip for 15 years through growth option, where I can create good wealth. waithing for your reply. Thanks in advance

    1. Invest in largecap or diversified funds like ICICI Pru focussed blue chip fund,HDFC Top-200, Birla SL Frontline fund, BNPP Equity fund, UTI Opps fund and Quantum long term equity fund. You can pick any of these funds.

  36. Hi  Suresh

    Can you please write an article  to explain  small, mid-cap and large cap funds. Thanks.

    1. Hi Nagaraj, if you refer my articles about mid-cap and large segment articles, I have given details about positives negatives and some of the top funds. Pls refer them

  37. Hi Suresh

    Can you please share with us the top 10 mutual funds for 2014. The list you gave earlier must have changed due to change in the Govt at center and other reasons. Please publish them in this forum. 

    Thanks

    Rajesh

    1. Hi Rajesh, The top 10 funds remains same which I shared for 2013 and 2014. I shared some funds in 2013 and additional funds in 2014. All these 20 funds can be considered for investment. However due to change in Government, some sectors are going to perform better. Pls see my article on banking funds and Infra funds. You can look for investment in such funds if you are high risk investor.

  38. Hi Suresh,

    Thanks for the very informative article.
    Can you please also explain what is the difference between Regular and Direct funds?

    1. Hi Firoz, For regular funds, you would go thru mf broker and invest (like icici direct.com or fundsindia .com). However for direct funds, you would visit MF house website and invest directly. There are no brokers in between. All such plans are tagged with “Direct” at the end of the scheme. Since these are not going thru broker, MF houses would not paid any Trial fees. Your returns from direct funds would be 1% to 2% higher in a year compared to regular plans. Pls refer our complete artilce on this subject

  39. Hi Suresh

    You have said that through growth option mutual funds 1000/-per month for 15 years in sip one can become crorepathi. May i know in which fund to invest as am intrested to invest for 15 years please guide me regarding this. Thanks in advance

    1. Hi Anuradha, It depends on risk appetite. If you are moderate risk taker, you can invest in balanced funds like ICICI Balanced fund or HDFC Balanced fund. If you can take some more risk, invest in equity funds

  40. Dear Sir,

    I am very much happy to see your simple, easily understandable essay of "Various types of Mutual Funds".

    Similarly, in continuation of this, why don't you post the well performing various Mutual Fund Schemes availabel on the above heads like mutual fund scheme names from ICICI/HDFC/Birla &others on the above types.

    This will be verymuch useful for the readers like me to take a immeidate decision on investment.

    Thanks & regards.

    s.ravi chandiran 9894828077.

     

     

     

    1. Hi Ravi, I agree. However this article is basically targetted for new investors in mutual funds. If I feed every thing in single article, they may get confused. Once they go thru this and then other they would make out which funds are good and which are not.

  41. Hi Suresh,

    It was quite refreshing to me. You have shared a very good and useful information for the investers before starting their investments especially to the beginners 🙂 Keep posting!!

  42. Hi Suresh,

    I really like your blog and have become a regular reader – it has very informative and useful articles. I have recently begun investing in mutual funds through SIPs. I have started with ICICI Pru Dynamic Plan, ICICI Pru Balanced Fund, Mirae Asset Emerging Blue Chip Fund, Birla SL Top 100 and Birla SL Frontline Equity – all with Growth option.

    I have a basic question regarding the period of an SIP. When you suggest that we invest in equity (through SIPs) for 10-15 years, should the period (of monthly payment) of each SIP be 10-15 years? Or, can I choose a period of 18-24 months for an SIP and then re-invest the accumulated amount (i.e. the redeemed amount when the NAV is high some time after the period) in other/same mutual funds depending on the market (and also start new SIPs after the period of previous SIPs end) and continue in this manner for 10-15 years? Is there any difference with respect to returns in these two modes of investing?

    Thanks, Vaibhav.

    1. Hi Vaibhav, Thanks for your comments 1) When I sai 10-15 years, you should continously invest for such period every month 2) The strategy indicated by you to invest only for 18-24 months SIP and re-invest for 10-15 also works. However it may not be that effective. e.g. You have invested in Jan-2005 to Dec-2006 for say Rs 20,000 and your value is Rs 25,000 during Dec-2006. As per your strategy you would have reinvested this amount for remaining period. However there was market crash in 2007. Means your Rs 25,000 would have come down to Rs 18,000 for an example. Now in 2014, market boom is there and your investment value is increased to say Rs 30,000. What is your real addition. Only Rs 20,000. However if you would have continued with SIP during 2007 to 2013, your investmetn value would have been less and in 2014, you would have benefited more. This is why I keep recommending to invest for long term. If you see such 3-4 cycles in 10-15 year, you can create good wealth.

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