Top 10 Mutual Funds To Invest In 2024
Table of content:
- About Mutual Funds
- Which are the best mutual funds in India that one can invest in 2024?
- Top 10 Mutual Funds
- How to decide while choosing mutual Funds?
- How to calculate the tax applicable on mutual funds in India?
- Who should be investing in mutual funds?
About Mutual Funds.
Mutual fund is an investment option that allows people to invest in a fund that is further invested in various securities. As expert investors handle mutual funds, the chances of increment in the invested value are significantly higher. Also, as the fund is divided into several market-linked instruments, there is risk of losing the invested capital. Moreover, there are several types of mutual funds that one can invest in. Hybrid mutual funds, debt mutual funds, equity mutual funds are the most popular mutual funds available in the financial market in India. Therefore, one must invest in mutual funds wisely.
Investors may invest in mutual funds via SIP (Systematic Investment Plan), which allows them to invest every month, quarter, or predetermined interval. Investing in the best SIP plans for Rs. 1000 per month is a much better alternative as it prevents the need to deposit a bulk amount. It also helps the investor understand how the invested money grows as the deposits increase.
Which are the best mutual funds in India that one can invest in 2024?.
Mutual funds can be divided into different types based on the underlying assets in which they are further invested. Therefore, the debt mutual funds invest their capital in debentures, whereas equity mutual funds invest their capital in equities. Hybrid mutual funds invest the capital in mixed securities. Each of these funds is associated with a certain degree of risk. Investors must analyse these risks and choose the ones that align with their investment goals. Or else, they can find the top performing SIP mutual funds in each of these categories and invest in some of them. Several other mutual funds like index mutual funds, tax saver mutual funds, blue chip mutual funds, etc., can be suitable for some investors.
Some are top long-term mutual funds, whereas some are the best short-term mutual funds. Smart investors pick the top mutual funds in each of these categories and invest in the ones that can help them attain their short- and long-term financial objectives.
Each investor has a certain preference when it comes to investing. Some individuals like investing in real estate, while others prefer investing in gold and fixed-income instruments. The choice of mutual funds can vary as per an individual’s investment preferences. Also, each investor can handle a certain level of risk. Therefore, the best mutual funds to invest in 2024 cannot be the same for everyone.
Top 10 Mutual Funds.
Here are the top 10 mutual funds in India that you can consider to invest in!
Note: These are the top 10 mutual funds in India when it comes to equity mutual funds. However, these are not the only mutual funds in the market. The top 10 mutual funds in India for debt and hybrid mutual funds will vary.
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How to decide while choosing mutual Funds?
Investors can choose the best performing mutual funds in 2024 based on these factors:
Investment goals
Every investor has a financial plan, and therefore, it is better to consider this plan while investing in mutual funds. In the short term, all mutual funds might not be top return mutual funds but can be ideal for growing capital over a longer period. Thus, if one needs to arrange capital over the short term, they need to go for the top mutual funds to buy that can provide fast growth within a short period. However, as the returns are higher, their risks will be higher as well. To balance the risks and returns, one must invest in multiple mutual funds instead of allocating all the capital in one mutual fund.
History of the funds
The performance of a mutual fund is assessed through the corrections and risings that it has shown over a period. It also displays whether the prices of the funds were stable when the market conditions were turbulent.
The performance of the mutual funds launched recently cannot be predicted as they have no previous records to measure and monitor. Therefore, it is wiser to invest in mutual funds with a proven track record over a long duration.
Expense ratio
The fund manager will charge a fee to manage a mutual fund’s assets. When it is calculated as the fund’s total asset percentage, it is known as the expense ratio. A higher expense ratio indicates that the returns will be lesser. Therefore, the best mutual funds to invest in will be those having a lower expense ratio.
Track record of fund manager
The fund manager's track record should also be assessed as transparency in managing the funds and fees are essential to safeguard the investor’s capital.
Apart from these things, one must also evaluate financial ratios like beta and alpha to determine India's top 10 mutual funds.
How to calculate the tax applicable on mutual funds in India?.
Even the best mutual funds in India are taxable irrespective of whether they are the best large cap mutual funds, best mid cap mutual funds, or best small cap mutual funds. The earnings through mutual funds can be classified into gains in capital and periodic dividends. The dividends are included in the investor’s total income, and the applicable taxes will depend on the income slab to which their earnings and investments belong.
The investment duration and mutual fund type will decide the tax applicable on the capital appreciation. For instance, the short-term gains earned through equity mutual funds within a year will attract a 15% tax. The mutual funds that allocate at least 65% of their capital in equities are classified to be equity mutual funds. Long-term gains that are above Rs. 1,00,000 are taxed at 10%.
The rules of debt mutual funds and hybrid mutual funds vary according to their holding period. The best mutual funds to invest can be figured out only after examining the tax deduction applicable.
Who should be investing in mutual funds?
Though investing in mutual funds is a wise decision, not everyone can digest the risks associated. Investors who want to realize their investment goals should consider investing in the top 10 mutual funds in India that are listed as per the mutual fund type. Also, to earn high returns, one must be able to invest regularly in mutual funds. SIP is also an excellent option for employees who make a periodic income.
Traditional financial instruments, like FDs or RDs, do not offer the same interest rate that they provided some years ago. Therefore, if investors want steady growth in capital high enough to beat the inflation rates, investing in the top 10 mutual funds in India is the perfect option. Also, as fund managers manage mutual funds well, they will prove less risky than investing directly in stocks. However, investors must be able to diversify their investment portfolios to balance the risks that come with mutual fund investments.
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| Question | Answer |
|---|---|
| What is a mutual fund? | A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. It offers a way for individuals to invest in a diversified portfolio without having to manage individual investments themselves. |
| How do I invest in a mutual fund? | You can invest in a mutual fund by opening an account with a mutual fund company or through a financial advisor. You typically have the option to invest a lump sum amount or set up regular contributions through systematic investment plans (SIPs). The mutual fund company then uses your money to buy shares in the fund. |
| What are the different types of mutual funds? | Mutual funds come in various types, including equity funds (investing in stocks), bond funds (investing in bonds), money market funds (investing in short-term, low-risk securities), and hybrid funds (mix of stocks and bonds). Additionally, there are sector-specific funds, index funds, and actively managed funds, each with its own investment strategy and risk profile. |
| What are the fees associated with mutual funds? | Mutual funds may charge various fees, including an expense ratio (management fees), front-end load (charged when you buy shares), back-end load (charged when you sell shares), and 12b-1 fees (marketing and distribution costs). It's essential to understand these fees before investing and choose funds with expense ratios that align with your investment goals. |
| What are the risks associated with mutual funds? | Mutual funds are subject to market risks, which means the value of your investment can go up or down based on the performance of the underlying securities. Additionally, there's the risk of poor fund management, interest rate risk (for bond funds), and liquidity risk (difficulty in selling shares). To mitigate risks, diversify your investments across different types of funds and industries. |
