The most stable approach to increasing wealth gradually is through mutual fundsThis way, the money can be invested in a pool of stocks, bonds, and other kinds of security. Be it mid-cap or small-cap or in sectors, the right combination will do wonders for you in terms of returns. This article discusses five of the best mutual funds from their recent performance:
- Motilal Oswal Mid Cap Fund Direct-Growth
This is a mid-cap fund which especially invests in medium-sized groups that have appropriate scope for growth. The companies invested here are usually termed as the future giants of their industries, hence making the fund a favourite for investors seeking big returns. Mid-cap funds are riskier than large-cap funds, and hence, even if the returns are excellent, there is much exposure. Investors with very long-term horizons and risk-ability can invest in such a fund.
- Bandhan Infrastructure Fund
It focuses on sectors related to infrastructure such as construction, energy, and transportation. Its return in the last year is as huge as 43.68%. It’s supposed to benefit from the future increased development of infrastructure in India, which is expected to go sky-high in the future. This fund has a potential for high growth but involves higher risk as it gets more exposure to one single sector. Best suited to investors who are highly positive about India’s infrastructure story and can stomach short-term volatilities for long-term return.
- Nippon India Small Cap Fund
The Nippon India Small Cap fund had given a return of 43.10% within one year. The fund pools its money into small-cap companies, usually not that well-established but carrying huge potential. Of course, small-cap funds have an aggressive growth strategy but at much higher risk levels than their large-cap and mid-cap funds.
- ICICI Prudential BHARAT 22 FOF Direct-Growth
This fund of funds from ICICI Prudential BHARAT 22 FOF has given 42.88% in one year. The FOF scheme invests in Bharat 22 ETFs consisting of 22 stocks cut across various sectors that comprise public sector companies and financial institutions. It offers a diversified investment opportunity and is also sensitive to government policy, as most of the corpus consists of PSUs.
- DSP: The Infrastructure Growth and Economic Reforms Regular Fund Direct-Growth
The DSP Infrastructure Growth and Economic Reforms Fund is an investment scheme that emphasizes companies expected to benefit from infrastructure development and economic reforms in India. It has provided 41.95% returns in the last year and thus has tremendous growth potential. But like any sector-specific fund, it comes with higher risk as its focused investment strategy would make it more vulnerable.
Conclusion
Best mutual funds are actually an efficient way of acquiring long-term financial growth especially when aimed at a particular goal of an investor along with risk tolerance. The mid-cap and small-cap funds generate more returns, but these funds come along with a higher risk attached to them.
For the investor in pursuit of a steady, long-term investment solution, SIP mutual fund is perfect. Systematic investment plans, through regular inflows of investments, may actually help to alleviate the volatility and create a patterned discipline in the investment game. SIPs are valuable because they help an investor generate wealth continuously, coupled with reducing volatility due to constant investment.
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