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A mutual fund raises money from investors and on their behalf, they invest that money. A little amount fee is charged for maintaining and handling the money. For People who don’t know enough about investing, a mutual fund is a perfect investment vehicle for them (general investors). A beneficial and profit earning part for investors in a mutual fund is that they can select a mutual fund scheme according to their demands and requirement. The base foundation for a mutual fund scheme would be decided according to the investor’s financial goals.

mutual funds for beginners

Approaches to Investing in Mutual Funds

There are 4 common approaches to invest in mutual funds. They are as follows:

  • Bottom-up approach: This approach focuses on picking the stocks of some companies that are performing well regardless of the prospects for the economy or the industry under which the companies fall.
  • Top-down approach: This approach recognizes the big economic picture and sees countries or industries that are forecast to perform well in the future. Investments are then made in companies that fall under the sectors or countries that are supposed to perform well.
  • Technical analysis:This approach studies preceding market data to analyze the direction of investment prices.
  • Combination of Bottom-up and Top-down approach: This approach connects the 2 most common approaches to investing in mutual funds. The fund manager normally uses the top-down analysis to figure out the countries in which to invest and then uses the bottom-up analysis to build the portfolio.

Basic terms of mutual fund

  • Bid: In mutual funds, it is a price at which the shares are bought back by the fund. A bid is simply called Sell Price.
  • Shares or Fund Units: In mutual fund investments are made by purchasing the shares or the units of a particular fund. The more units purchased the greater investment it would be.
  • NAV (Net Asset Value ): The NAV is also known as unit price or price per share of the fund. In mutual funds, the units are bought, sold, and redeemed at the current unit price of the NAV at the time of sale or purchase. The net asset value of a fund keeps changing depending on the fund’s performance.
  • Offer document: This an official document which describes the basic points of the fund. It’s the guidance for the investors that comprises all the related information about the mutual funds and to assist an investor to do his or her investment choice. The documents contain the objective of the fund, the asset classes that the fund will invest in, and the terms and conditions of the fund. The general points are also written in the document such as the risk factors, history of the fund performance, and many more.
  • Expense Ratio: It means the expenses acquired by the fund in association with the total assets.
    Expense ratio = operating expense/Average value of fund assets.
  • Redemption: The redemption in mutual funds is done at the time of fund units canceled, sold, or transferred.
  • Lock-in Period: This a period in which the specified fund’s units cannot be sold. The investors can’t liquidate their investment in this lock period. If approved, it is subjected to a loss or penalty of advantages.
  • AUM: It refers to the Assets Under Management the entire market value of funds being maintained or controlled by a mutual fund company.
  • NFO: AMC launched NFO (New Fund Offer) in the market as new funds or schemes. The NFO benefits investors as they can purchase the units of the new funds at the price offered that is usually reasonable. The purchase in these mutual funds is done at the current NAVs.
    When the sale, purchase, and transfer of fund units are made by the investors then a cost is charged by the AMC, that is the Entry load / Exit load. These are amounts paid and they act as an extension to the amounts deducted from NAV on transfer/ redemption or NAV on purchases.


Let’s us look at the people who can invest in mutual funds in India are:

  • QFI (Qualified Foreign Investors)
  • Compliance with SEBI (Securities and Exchange Board of India) Regulations.
  • Partnership Firms
  • FII (Foreign Institutional Investors) enrolled with SEBI on a repatriation basis.
  • Industrial and Scientific Research Organizations.
  • NRIs and persons of Indian origin (PIO) living abroad, on a complete repatriation basis.
  • SPVs authorized by the relevant officials that is RBI approval.
  • AMC, Sponsor, Trustee, or their associates.
  • All the Navy, air force, para-military, army, and additional eligible institutions


Client Login

Sign in or log in to the account complete details Name, E-mail ID, Contact Number, and Password.

KYC Verification

It will ask for your PAN Number, enter it and Fill up details (Basic, Bank, Personal, and Address Details). Documents Upload for KYC is for the people who don’t have KYC, after that it will ask for a 5-second video upload.

Digital Signature Upload

The person needs a DSC (Digital Signature Certificate) for uploading on-page to proceed with the mutual fund investment procedure.

Start Investing Now

The page for investing will be open and you can pick the fund you want to invest in along with the payments process i.e. only Net banking.


The simple steps that help in and most practical way to invest in mutual funds are :

Step 1:

Log in to the mutual fund portal and click on the Sign-up/ Log in. Then choose for the client login and create a free profile.

Step 2:

Start creating an account and enter details like Name, Email-ID, Contact Number, and Password.

Step 3:

After this, you will see that the page will show a KYC Verification and ask for PAN Number. Enter your PAN Number. After that fill in all the details like Basic Details, Bank Details, Personal Details, and Address Details. If you already have KYC the ” Document Upload” page will be shown and If you don’t have KYC then upload documents on the Documents, Upload Page. At last, they will ask for a signature upload of your Digital signature certificate.

Step 4:

In case you don’t have KYC it will ask for 5 seconds video upload do that what is mentioned on the page. And If you already have KYC, then it will directly show the page and you can start investing.

Step 5:

Invest and watch and create good wealth!

It’s that simple to invest in mutual funds with WealthBucket.

Benefits of mutual fund investment

The purpose of investing in a mutual fund by the people are mentioned below :

  • A mutual fund is a pool of centered investment highlight schemes that simply defines which assets are targeted for investments, and it also enables investors to direct savings to various asset classes in a focused way.
  • Fund managers of the asset management companies operate the mutual funds which are essential for professional management. It is seen that many people find difficulty in deciding which assets to invest in, due to a lack of financial knowledge. With expertise, investment skills managers reduce risks and increase returns to investors.
  • SIP (Systematic Investment Plans) benefits people by allowing to invest little amounts on a monthly basis to get profits of rupee cost averaging. It’s an option to those who cannot spend lump sum amounts thereby inviting investors over income levels.
  • Securities and Exchange Board of India (SEBI) assures, regulates investments and dealings as per directions. This contributes a factor of security to investments made.
  • Risk is varied as funds invest in a number of securities. The possibilities of each stock performing badly at the same time are low. Losses experienced on a few stocks are balanced by profits made on others, this reduces risk.
  • An investment can be made by people who do not hold sizeable amounts of indirect equity or other devices that need a huge initial investment, mutual funds offer for an affordable investment avenue. A number of investors reducing individual charges when even transaction charges are spread out over maximum investors.
    Mutual funds provide versatility which is remarkably necessary by allowing investors to switch between funds or between schemes to receive genuine terms or valid returns.
  • A Mutual funds investor has clear statements of every investment which makes it simple for investors to hold a check. Equitable and large-quality give investors an avenue to reach both debt funds and equity at one go in a balance of option. It can be difficult for investors to always evaluate their investment portfolios.
  • Investors have a wide variety of investment options such as debt funds, hybrid funds, regional funds, sector funds, and many more.


We have collected a record of the greatest performing mutual funds in India according to various classifications of mutual funds. This will assist you to get a bright recognition of the performance of a specific type of fund. You can accordingly choose a fund to spend your money in.

  • Equity Funds: Consistently these are equity funds that have been performing great.
  • Debt Funds: Constantly these debts funds are performing great.
  • Balanced Funds: These are equitable plus balanced funds that have been performing well constantly.
  • Monthly Income Plan (MIP) – They are funds that give greater returns to the investors matched to other MIPs. But, these funds are competitive in nature, they bear greater risk. It comes under the class of investments that gives a selective payment on a monthly basis to the investor.
  • Balanced Mutual Funds: These funds allow you to build a stable portfolio consisting of Money market components bonds and stocks.
  • Index Funds: Index funds are mutual funds where the portfolio is created with the purpose of coordinating or following market index elements.
  • Liquid Funds: The mutual funds defined by a low maturity period and spend essentially in securities such as commercial papers, term deposits, and treasury bills.
  • Small and Mid-Cap Equity Funds: Funds which one can spend in a blend of Mid-cap and small-cap stocks. These funds share their investments in both mid-cap companies and small-cap companies. The portion of the money spent or invested in the mid-cap and small-cap will vary.
  • Ultra-Short-Term Debt Fund: Invest in these funds are holding short-term maturities. Also, give greater returns than other money market tools.
  • Short-Term Income Funds: Invest in securities over a smaller period of time to give the shareholder a flow of income through dividend payments and interest.
  • Long-Term Gilt Funds: The funds that invest in long-term government protection.
  • Credit Opportunities Funds: These funds give greater returns by understanding the risk as a consequence of investing in lower-rated devices. These funds view for mismatches among the fundamentals of a bond and credit rating. They are open-ended debt mutual funds.
  • Long-Term Income Funds: Invest in securities over a large period to give the shareholder with a flow of income through dividend payments or interest.
  • Large-cap-oriented equity funds: Mutual funds that spend a larger part of their collection of funds in organizations that have a high market capitalization, usually with a cost higher than $10 billion.
  • ELSS- Equity Linked Savings Scheme: These funds are those which help you in saving income tax under Section 80C of the Income Tax Act and saves up to Rs.1.5 lakh. These funds have 3 years lock-in period.
  • Thematic – Infrastructure Funds: As the name implies, Invent in a specific sector as per the standard theme. Thematic funds are the funds that are invested in companies that trade with activities or schemes linked with a foundation such as construction, steel, cement, and so on.
  • Diversified Equity Funds: Funds that invest people money in any organization without seeing into its area or volume. It changes or shares investments over the whole stock market for providing the high-grade returns to the investors.


For resident Indians

Every customer who plans to invest in mutual funds is required to be KYC verified. Individual investors will have to present their identity proof and address proof.

  • Application Form
  • KYC Compliance
  • ID and Address Proof-Aadhaar card, Voter ID or Driving Licence
  • Utility Bills- Electricity/Telephone/Gas Bill
  • Bank statement ( 3 months old)

If any of the certificates include attestations in the identity proof and address proof is outlined in a foreign language, they have to be translated into the English language before submission.

For Non-Resident Indians

Non-resident Indians living out of India are required to present the following approval documents:

  • ID Proof and Address Proof
  • PAN Card
  • Attested copy of passport
  • Copy of proof of abroad address
  • Copy permanent address


  • Review for the AMC management and the profile of the mutual fund managers. This can be seen in the scheme of the particular Mutual Funds.
  • Routine analyses of the performance of the funds for diverse time frames that can be 3 months, 6 months, or 1 year. A person can go up to 6 years for equity funds.
  • You need to view the past history before operating for the mutual fund which indicates to be knowledgeable about how it has made market improvements as well as collisions.
  • Shortlisted funds by person/investor will be compatible performers and are most suitable to be operated by good fund managers.
  • Constantly watch for the greatest mutual funds in the asset class. Make sure that they will assist you to reach your financial goals in the future that you want and see that they are according to your risk profile.


Observe your fund’s performance once a year. In case the performance is poor in comparison to the previous years withdraw it. So owing to key factors such as a shift in the proportion of the portfolio, a shift in fund manager, etc.Don’t neglect expenses in a case where mutual funds impose a fee to some extent form investors.
Decide that you need to purchase a bond fund or money-market fund.Don’t invest in a fund without evaluating it’s performance and offer documents. Don’t invest just because your known person has purchased it newly.
Funds in which one can invest in involve a blend of mid-cap and small-cap stocks. These funds allocate their investments in both mid-cap companies and small-cap companies. The portion of the money invested in the mid-cap and small-cap will change.Don’t review your fund’s NAV every day. Net Asset Value may shift in the short term but all that values is the percentage profit or loss.
A fund’s expenses can differ from a trading cost and fund administration.Don’t’ invest all your money into the funds in one go which was designated for a goal.
The thing that is needed to be done is to change into various asset classes, Mid, and small-cap Equity Funds.Don’t blindly follow a fund for it’s recent performance or view another for it’s dull performance in the past.

Frequently Asked Questions

What is Mutual Fund?
How to get mutual fund service?
How much does it cost to get mutual fund service?
What is the process to get mutual fund service?
What are the documents required to invest in mutual funds?
Can a Non-Resident Indian (NRI) invest in the schemes of mutual fund schemes?
What is KYC and how to make KYC checked for mutual funds investment?
What is Net Asset Value?
Which factors are considered for selecting a mutual fund?
What are the most common mistakes people make when choosing mutual funds?
Is the custodian an independent organization?
If the mutual fund makes changes to the scheme. How will one get to know about it?
Why should one invest in mutual funds only?
How will NAV of a debt fund fall?
Is there any value of folio number in mutual funds?
What is the difference between Mutual Funds and Portfolio Management Schemes?
What do you mean by the cheque-writing facility?
What are the main things one should check when he/she downloads or receive a scheme information document?
How important is the expense ratio?
Do mutual funds provide a guaranteed return?