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Finding the Best Mutual Funds for Investing INR 1 Lakh

Summary:

Investors who are just starting off their trading journey find mutual funds to be among the safest forms of investment. This blog explains how to choose the best mutual funds for investing INR 1 lakh.

Introduction to identifying mutual funds:

Investors who are just starting off their trading journey find mutual funds to be among the safest forms of investment. Finding the right fund manager is crucial. They take care of investing in shares, stocks and bonds on behalf of the investor and allot them based on the capital being used. A fund manager will find it easy to make these investment decisions when they know that the investor has already decided on investing 1 lakh in mutual funds.

Often, investors remain apprehensive about how much to invest and end up making a decision based on the risks and returns that a mutual fund that they have shortlisted has to offer. In a scenario where the capital is already decided and kept ready, the task becomes simpler. The following steps may then be handy for choosing the right mutual funds.

Top five mutual funds for investing INR 1 lakh:

  1. Axis Small Cap Fund Direct Growth: CEO Chandresh Nigam heads Axis Mutual Fund, which was launched in 2009. Axis Bank Limited is among its sponsors. Schroder Singapore Holdings Private Limited is the holding company under which it operates as a large-cap fund.
  2. Nippon India Small Cap Fund: This is a small-cap fund that had a five-year CAGR of 25.47% (as of October 31, 2023). The goal of the fund is to generate capital appreciation in the long run, making it ideal for investors looking to put INR 1 lakh in mutual funds.
  3. SBI-Focused Equity Fund: This fund is popular among investors because its goal is capital appreciation in the long run and its three-year annualised return has been 20.69%. Given its standing in the Indian market, it is one of the most reliable funds for an investment like this.
  4. Mirae Asset Emerging Bluechip Fund: Through investments in equity and its related securities, the goal of this fund is capital appreciation and income generation through a diversified portfolio. It is ideal for those looking to invest INR 1 lakh and get returns.
  5. SBI Small Cap Fund Growth: Long-term capital growth is the goal of this fund which was launched on January 1, 2013. It is a small-cap fund and has provided a three-year annualised return of 31.62%.

Summing up

It is important to note that mutual fund investments involve risk and there aren't guarantees of returns. When looking for the best mutual funds for investing INR 1 lakh, having a long-term approach works for generating income. Also, it is necessary that an investment of as much as INR 1 lakh needs to be planned and implemented with caution so that the risks are minimised. Consulting with a financial advisor who can provide personalised guidance based would make it easier to choose the right mutual funds. It is imperative to regularly monitor and review the position and make adjustments to the portfolio when things do not align with the goals. Through diversification, the portfolio can be made resistant to shocks that may arise from fluctuations in any specific sector or industry.