Mutual funds are an investment tool where you invest in a shared pool overseen by experts from asset management companies. It is a way to get exposure in the stock market without increasing risk exposure. Depending on your risk tolerance and investment horizon, you can select a mutual fund that fits your investment style.
The popularity of mutual funds has been growing over the years. Besides offering various funds to select, mutual fund investment provides dozens of other advantages. This blog will discuss some of the best mutual funds in India where beginners can invest.
Canara Robeco Equity Tax Saver Fund
The Canara Robeco Equity Tax Saver Fund is a direct growth fund offered to investors in December 1987. The scheme aims to achieve a long-term capital appreciation for investors by primarily investing in equities.
The fund invests in the primary and secondary markets and may also invest in the overseas equity market, such as ADRs/GDRs. Moreover, investors can claim tax benefits u/s 80C of the Income Tax Act.
ICICI Prudential Equity & Debt Fund
This scheme has been available to investors since October 12, 1993.
ICICI Prudential Equity & Debt Fund is a hybrid scheme that invests in equities and equity-related securities to generate long-term capital gains for investors. Investors can avail of tax deductions under section 80c of the Income-tax Act.
DSP Tax Saver Fund
The scheme aims to earn medium to long-term capital appreciation for investors by investing in equities and equity-related securities. It is one of the best mutual funds for beginners.
The scheme was introduced to investors on December 16, 1996.
It also allows investors to receive tax deductions under the Income Tax Act.
Mirae Asset Tax Saver Fund
Mirae Asset Tax Fund primarily invests in equity and equity-related securities. It is appropriate for investors looking to invest their funds for more than three years. As an ELSS fund, it offers investors tax savings and long-term capital appreciation.
Since its introduction in 2019, the fund has constantly generated higher returns for investors and is the best mutual fund to invest in 2022.
Kotak Tax Saver Fund
The fund is designed to generate long-term capital appreciation. The scheme predominantly invests in equities and offers income tax benefits to investors.
Kotak Tax Saver was made available to investors in August 1994 and is still among the best mutual funds for beginners.
Edelweiss Aggressive Hybrid Fund
As the name suggests, Edelweiss Aggressive Hybrid Fund is a direct-growth hybrid fund focusing on middle and long-term capital appreciation. The scheme has been available since 2008.
The fund invests significantly in equity and equity-related securities and the residue portion in debt and money market instruments.
SBI Equity Hybrid Fund
It is one of the long-running and best mutual funds in India. SBI Equity Hybrid Fund ranks among the top mutual funds to generate long-term capital appreciation. It invests in a mix of equity and debt market instruments, providing investors with the liquidity and benefits of an open-ended fund.
Baroda BNP Paribas Aggressive Hybrid Fund
BNP Paribas introduced the scheme in 2004. It aims to generate balanced risk returns for investors by investing in high-growth companies and low-risk fixed-income instruments.
Factors to consider before investing
Before buying the best mutual funds to invest in 2022, here are a few factors to consider.
- Mutual funds are categorised based on portfolio composition and risk. Different funds have different threats and returns, requiring investors to choose based on risk tolerance and investment goals.
- Choose an alternative that fits your overall financial plan, keeping short-term and long-term goals in sight.
- Check the fund’s performance before buying. Performance consistency and uniformity are the criteria of a quality fund.
- While diversification is key to reducing risk, over-diversification can also dilute your returns.
- Although we said that performance consistency is critical, it is unlikely that the fund will generate the same return every year.
We hope this article has helped you understand the best mutual funds for beginners. But you must research before selecting the most suitable option.
Mutual funds are excellent financial vehicles for investing in the share market, even if you are a novice. Investors who want to invest but lack knowledge can also invest in mutual funds. Start investing in mutual funds with Angel One. Open a free Demat account today.
Disclaimer: This blog is exclusively for educational purposes. The securities quoted are exemplary and are not recommendatory.