BEST PERFORMING MUTUAL FUNDS TO INVEST IN INDIA

To begin with, many people might find mutual funds complicated and intimidating. Well, to simplify it – a mutual fund is a type of investment vehicle consisting of portfolios of stocks, bonds or other securities. These funds give small or individual investors access to diversified professionally managed portfolios at a low price. These are of different categories representing the kind of securities they invest in, their investment objectives and the type of returns they seek. Mutual funds charge annual fees called expense ratios and in some cases, commissions, which can affect their overall returns.

Mutual Funds Investment

Mutual funds pool money from the investing public and use that money to buy other securities ,usually stocks and bonds. The value of the mutual fund company depends on the performance of the securities it decides to buy. So, when you buy a unit or share of a mutual fund, you are buying the performance of its portfolio or more precisely , a part of the portfolio’s value. Investing in a share of a mutual fund is different from investing in shares of stock. Unlike stock, mutual fund shares do not give its holders any voting rights. A share of a mutual fund represents investments in many different stocks instead of just one holding. That’s why the price of a mutual fund share is referred to as the net asset value (NAV) per share. A fund’s NAV is derived by dividing the total value of the securities in the portfolio by the total amount of shares outstanding which are held by all shareholders, institutional investors and company officers or insiders. Investors earn a return from a mutual fund in three ways:

-Income is earned from dividends on stocks and interest on bonds held in the fund’s portfolio. A fund pays out nearly all of the income received over the year to fund owners in the form of a distribution. Funds often give investors a choice either to receive a cheque for distributions or to reinvest the earnings and get more shares.

-If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution .

-If fund holdings increase in price but are not sold by the fund manager ,the fund’s shares increase in price. You can then sell your mutual fund shares for a profit in the market.

TYPES OF MUTUAL FUNDS TO INVEST

Mutual funds are divided into several kinds of categories, representing the kinds of securities they have targeted for their portfolios and the type of return they seek. There is a fund for nearly every type of investor or investment approach. Other common types of mutual funds include money market funds, sector funds, alternative funds, smart-beta funds, target –date funds and even funds of funds ,or mutual funds that buy shares of other mutual funds.

BEST PERFORMING MUTUAL FUNDS

Given below is a list of top 10 mutual fund schemes .There are two schemes from five different categories which a regular investor might find useful.

-Axis Bluechip Fund

-Mirae Asset Large Cap Fund

-Parag Parikh Long Term Equity Fund

-Kotak Standard Multicap Fund

-Axis Midcap Fund

-DSP Midcap Fund

-Axis Small Cap Fund

-SBI Small Cap Fund

-SBI Equity Hybrid Fund

-Mirae Asset Hybrid Equity Fund

Aggressive hybrid schemes are ideal for newcomers to equity mutual funds .These schemes invest in a mix of equity (65-80%) and debt (20-35). Because of this hybrid portfolio they are considered relatively less volatile than pure equity schemes that invest the entire corpus only in stocks. Aggressive hybrid schemes are the best investment vehicle for very conservative equity investors looking to create long-term wealth without much volatility.

On this note, please take a wise and well informed decision before taking a leap to invest your hard earned money