Contents
- List of 5 Best mutual funds to invest in for beginners – 2019
- Portfolio of Best mutual funds to invest in for beginners
- Reliance Large-cap fund-Direct growth
- Mirae Asset Large-cap fund-Direct growth
- HDFC Small cap fund-Direct growth – One of the best mutual funds to invest in for beginners
- Franklin India Ultra-Short Bond Fund- Super Institutional Plan- Direct Plan
- L&T Money Market Fund – Direct-Growth – Another one of the best mutual funds to invest in for beginners
- Market Conditions of 2018
- How Is the Market Likely to Perform in 2019?
- So what should be the best mutual funds to invest in 2019 for beginners
Mutual Funds can range from highly unpredictable small-cap mutual funds and sector-specific funds to extremely conservative liquid funds. Those who are new in mutual funds should go for relatively low-risk, high-quality funds. Investing in a sector-specific or small-cap fund can be potentially risky, especially when you encounter your first market correction. In this article, we are going to discuss the best mutual funds to invest in for beginners.
Investing in mutual funds can become a tough task considering there are more than 5000 options for someone to buy. It is always recommended by the mutual fund advisors to invest in a mutual fund portfolio instead of a single mutual fund scheme. This blog on Best mutual funds to invest in for beginners will help them for understanding the mutual funds and where to invest their money.
List of 5 Best mutual funds to invest in for beginners – 2019
| Fund Name | 1 Year | 3 Year | 5 Year | Expense Ratio | Turnover Ratio | Category | Risk |
|---|---|---|---|---|---|---|---|
| Mirae Asset Large-cap fund-Direct growth | 14.12% | 16.39% | 14.93% | 0.64% | 22% | Equity(Large-cap) | Moderately High |
| Reliance Large-cap fund-Direct growth | 15.67% | 15.76% | 13.33% | 1.21% | 79% | Equity(Large-cap) | Moderately High |
| HDFC Small cap fund-Direct growth | -0.21% | 15.82% | 16% | 0.84% | 37% | Equity(small cap) | Moderately High |
| Franklin India Ultra-Short Bond Fund- Super Institutional Plan- Direct Plan | 9.7% | 8.97% | 9.28% | 0.44% | NA | Debt(Ultra Short Duration) | Moderate |
| L&T Money Market Fund- Direct-Growth | 7% | 7.95% | 8.3% | 0.28% | NA | Debt(Money Market) | Moderately Low |
Portfolio of Best mutual funds to invest in for beginners
Reliance Large-cap fund-Direct growth
This is one of the most popular large-cap mutual funds in the market right now and has given a 14.4% return since its launch.
Ideal investment duration for this fund: 4 years and above.
Key Information
| Launch Date | 8 August 2007 |
|---|---|
| NAV(2 Nov 2018) | ₹34.4 |
| Plan Type | Direct |
| AUM(Fund Size) | ₹1,898 cr. |
| Riskometer | Moderately High |
| Minimum SIP | ₹100 |
| Minimum SWP | ₹1000 |
| Performance w.r.t.its Benchmark | has consistently outperformed its benchmark S&P BSE 100 TRI since its launch |
| Age of the fund | 5 Years old |
| Expense Ratio | 1.28% |
| Exit Load | If redeemed between 0 to 1 year, Exit Load is 1% |
| Type | Open-Ended |
Mirae Asset Large-cap fund-Direct growth
This is one of the most popular multi-cap mutual funds in the market right now and has given a 16.9% return since its launch.
Ideal investment duration for this fund: 5 years and above.
Key Information
| Launch Date | 1 January 2013 |
|---|---|
| NAV(2 Nov 2018) | ₹49.3 |
| Plan Type | Direct |
| AUM(Fund size) | ₹8755 cr. |
| Riskometer | Moderately High |
| Minimum SIP | ₹1000 |
| Minimum SWP | ₹1000 |
| Performance w.r.t. its benchmark | has consistently outperformed its benchmark S&P BSE 100 TRI since its launch |
| Age of the fund | 5 Years old |
| Expense Ratio | 1.32% |
| Exit Load | If redeemed between 0 to 1 year, Exit Load is 1% |
| Type | Open-Ended |
HDFC Small cap fund-Direct growth – One of the best mutual funds to invest in for beginners
This is one of the most popular small-cap mutual funds in the market right now and has given an 18.38% return since its launch.
Ideal investment duration for this fun: 7 years and above.
Key Information
| Launch Date | 3 April 2008 |
|---|---|
| NAV(2 Nov 2018) | ₹44.7 |
| Plan Type | Direct |
| AUM(Fund Size) | ₹4,948 cr. |
| Riskometer | Moderately High |
| Minimum SIP | ₹500 |
| Minimum SWP | ₹1000 |
| Performance w.r.t.its Benchmark | has consistently outperformed its benchmark NIFTY small cap 100 TRI since its launch |
| Age of the fund | 5 Years old |
| Expense Ratio | 0.54% |
| Exit Load | If redeemed between 0 to 1 year, Exit Load is 1% |
| Type | Open-Ended |
Franklin India Ultra-Short Bond Fund- Super Institutional Plan- Direct Plan
This fund invests in debt & money market instruments, such that the duration of the portfolio is between 3 – 6 months.
Ideal investment duration: 3 to 6 months
Key information:
| Launch Date | 18 December 2007 |
|---|---|
| NAV(2 Nov 2018) | ₹25.3 |
| Plan Type | Direct |
| AUM(Fund Size) | ₹13,240 cr. |
| Riskometer | Low |
| Minimum SIP | ₹1000 |
| Minimum SWP | ₹1000 |
| Performance w.r.t.its Benchmark | has consistently outperformed its benchmark CRISIL liquid since its launch |
| Age of the fund | 5 Years old |
| Expense Ratio | 0.34% |
| Exit Load | NIL |
| Type | Open-Ended |
L&T Money Market Fund – Direct-Growth – Another one of the best mutual funds to invest in for beginners
This fund invests in money market instruments that have a maturity of up to 1 year.
Ideal investment duration: 12 months
Key information:
| Launch Date | 1 January 2013 |
|---|---|
| NAV(2 Nov 2018) | ₹18.2 |
| Plan Type | Direct |
| AUM(Fund Size) | ₹1,325 cr. |
| Riskometer | Moderately Low |
| Minimum SIP | ₹1000 |
| Minimum SWP | ₹1000 |
| Performance w.r.t.its Benchmark | has consistently outperformed its benchmark CRISIL Liquid since its launch |
| Age of the fund | 5 Years old |
| Expense Ratio | 0.28% |
| Exit Load | NIL |
| Type | Open-Ended |
Market Conditions of 2018
The Sensex fell 2.2% or 760 points to 34,001, and the Nifty 50 Index dropped 2.2% or 225 points to 10,235. Sensex wiped out all its 2018 gains as it fell 0.16% year-to-date. The Nifty has already declined 3% year-to-date. Unlike last year, when the stock market rose steadily and considerably, both Sensex and Nifty has gotten off to a disappointing and disconcerting in 2018.
In August 2018, the Indian stock market indices were at an all-time high. Both the Sensex and Nifty have been registering phenomenal growth over the past few months, with very few instances where the markets have nosedived. Sensex soared to close at 38,645.07 on 31st August 2018. On the other hand, Nifty rose over to touch a new peak of 11,680.80.
Since then, Sensex came down to 34,376.99 and its counterpart Nifty 50 came down to 10,316.45. The domestic stock market has lost about $300 billion since August 2018, with concerns over the impact of rising crude prices and a weakening rupee. It’s now worth only $1.97 trillion, falling below the $2 trillion for the first time since August 2017.
Here is the graph showing the last 24 months of the trend:
As concerns have shifted back and forth from a sluggish economy to an overheating one, the market has taken investors on a roller coaster ride, resulting in poor returns and testing investors’ strategy and resolve. However, the mutual fund industry is still on the growing trend. The AUM of the Indian MF industry has grown from ₹ 4.83 trillion as on 30th September 2008 to ₹22.04 trillion as on 30th September 2018, more than four and half fold increase in a time period of 10 years!
The total number of accounts (or folios as per mutual fund parlance) as on September 30, 2018, stood at 7.79 crore (77.9 million), while the number of folios under Equity funds, ELSS and Balanced Mutual funds schemes, wherein the maximum investment is from the retail segment stood at 6.54 crore (65.4 million). This is the 52nd consecutive month witnessing a rise in the no. of folios.
How Is the Market Likely to Perform in 2019?
The global research and brokerage firm Morgan Stanley has forecasted a Sensex target of 44,000 June 2019 in a bull case scenario following better-than-expected results on the back of policy and global factors and markets believing in strong election results.
For the base case scenario, the 30-share barometer Sensex is seen at 36,000 keeping all outcomes at a moderate level and slow growth acceleration. But if global conditions deteriorate, the market starts pricing in a poor election outcome then Sensex may steer back to a level of 26,500 (bear case), Morgan Stanley report said.
The global financial services firm seeing signs of investment rate rising and therefore profit margins should rise. The Big Bull believes India will be seeing big improvements in its manufacturing capability in the coming years.
So what should be the best mutual funds to invest in 2019 for beginners
Based on current and future market conditions, an ideal collection for 2019 will be one that has 5 mutual fund schemes spread over different market capitalization and beyond various asset classes, especially if you are a beginner. The best technique would be to include types of mutual funds like one large-cap fund, one multi-cap fund, one small-cap fund or mid-cap fund and 1 to 2 debt funds.
Now, if you want to save tax by investing in mutual funds, you can replace 1 fund with the multi-cap or large-cap category with ELSS funds. For long-term debt mutual funds, choose a fund that will invest across tools like gilt funds, corporate bonds, commercial paper, and deposits and also change its portfolio maturity based on the interest rate cycle. Avoid funds that will take exposure to credit, specifically have corporate bonds as a theme.
Also, ensure that you increase your investments across different mutual fund houses for a particular category. This will create stability in your portfolio even if there are major changes in the fund house or at the fund manager level. Different fund houses follow different investment philosophies and follow different strategies for stock picking. Also, the age of the investor and his risk appetite plays an important role in deciding the funds he should have in his portfolio.
Once you have selected the funds based on the above-mentioned criteria you must regularly visit your portfolio to check for its performance and review if it’s living up to the purpose for which it was bought. If a particular fund has not performed for say a quarter or so, there is no need to panic. Give it some more time before deciding to replace it with a better performing fund. Don’t judge a fund by its past performance alone, check if it has really performed during bear market situations also.
Our services at WealthBucket provide services to people who want to invest in mutual funds. These services include equity funds, liquid mutual funds, debt mutual funds or small-cap mutual funds. You can either call us at +91 9999379929 or email us at contact@wealthbucket.in.
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The data provided in this article is dated 31st Dec 2018. Please visit the site WealthBucket for the latest data.
