MUTUAL FUNDS, (TOP FUNDS FOR FOR 2020)
If you are one of those investors who want to invest in the markets but does not have clear information about investing, a mutual fund is the best option for you. There are various advantages of mutual funds as compared to direct investment. So before we proceed to discuss the best mutual funds to invest in 2020, let us first understand what a mutual fund is, how does it function and what are the advantages.
MUTUAL FUND AND IT,S TYPES
Mutual Fund is basically a professionally managed investment fund that pools money from different investors and purchases securities.
Also, there are various types of mutual funds to choose from depending upon your future financial goals.
Types of Mutual Funds
Money Market Funds these invest in short term fixed income securities like treasury bills, Government Bonds, Commercial papers etc. Low level of risk as well as low returns.
They invest in stocks majorly growth stocks that do not pay dividends and income funds which usually pay large dividends.
These invests in a mix of equities and fixed income securities. They usually follow the diversification model.
These invest in real estate, commodities or in Companies that support socially responsible causes.
Fund of Funds
These funds invest in other funds again focusing well on diversification.
Tax Saving Funds With long term financial goals
especially if you a salaried person tax saving fund is the most suitable choice to go for. It helps in wealth creation as well as saving tax with a minimum lock-in period of 3 years.
Advantages of Mutual Funds
- Affordable- Usually have minimum investment requirements.
- Diversification- This is the most important benefit involved with mutual funds. With adequate diversification comes a lower risk.
- Various types- As mentioned above there are various categories and types to choose from depending on the financial goals of each person.
- Less complex and easy to buy- It is simple to understand and can be easily purchased from brokers, banks, insurance companies.
- Professionally Managed- Another unique feature of a mutual fund is that it is well-managed by a professional team of experts and consequently there is a low chance of loss.
After giving you a brief introduction to the relevance of Mutual Funds we will now look at the
top ten Mutual Funds to invest in 2020. (Values in cr)
CR Equity Diversified Fund (G)-
It is a multi-cap fund with NAV of 126.96.
- Mirae Asset India Equity (G)- It is also a multi-cap fund with NAV of 48.08.
- Axis Bluechip Fund (G)- It is a large-cap fund with NAV of 27.
- CR Bluechip Equity Fund (G)- It is also a large-cap fund with NAV of 23.55
- Edelweiss Large Cap- A (G)- Also a large-cap fund with NAV of 33.78
- Invesco Growth Opprtunities Fund (G)- It is a large and mid-cap fund with NAV of 32.28.
- Sundaram LArge and Mid Cap Fund (G)- It is a large and mid-cap fund as well with NAV of 32.56.
- Axis Mid Cap Fund Growth- It is a mid-cap fund with NAV of 34.20
- Invesco India Mid Cap (G)- It is also a mid-cap fund with NAV of 46.51.
- HDFC Small Cap Fund (G)- It is a small-cap fund with NAV of 41.66.
Top Five Tax Saving Mutual Funds
ELSS ( Equity Tax Saving Schemes) –
Tax deduction under section 80c can be claimed in Income tax by investing in these tax saving mutual funds. Minimum 3 years of lock-in period is applicable from the purchase date.
- ABSL Tax relief’96 Direct (G)
- Invesco India Tax Plan DP (G)
- Taurus Tax Shield (G)
- Taurus Tax Shield Direct (G)
- Invesco India Tax Plan (G)
All the above mentioned are top rated Mutual Funds by CRISIL as well. But before investing please do remember that markets are subject to risk and make sure your selection of Mutual Fund is in align with your financial goals and risk tolerance.
Hope it helps !!
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