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Mutual Fund Investment Guide

Updated on September 23, 2020 , 4584 views

Are you new to mutual fund investments? Then refer to mutual fund investment guide for having an overall understanding about mutual funds. Asset Management Companies (AMCs) prepare a mutual fund investment guide to create awareness about the concept of mutual funds among people.

A Mutual Fund invests the money collected from individuals in financial instruments like shares and Bonds. There are many categories of mutual funds like ELSS funds, Index Funds, and tax saving funds.

Mutual fund investment guide also helps individuals to determine the money required to fulfill their objectives. So, with the help of mutual fund investment guide let us understand the different aspects of mutual funds like What is a Mutual Fund, How to Invest in Mutual Funds, different Types of Mutual Funds like index funds, ELSS funds, tax saving funds, selecting the best mutual funds, mutual fund calculators and other aspects of mutual funds.


Mutual Fund Investment Guide: Introduction To Mutual Funds

Most of the mutual fund investment guide start by giving a brief introduction about mutual funds. As mentioned earlier, a Mutual fund is an investment avenue that collects money from different individuals sharing a common objective of trading in shares, bonds, and other financial securities. Mutual funds in India are run by AMCs or fund houses. Individuals owning mutual fund units are entitled to a proportional share of profits and losses depending on the fund’s performance. The regulatory authority of mutual funds in India is Securities and Exchange Board of India (SEBI). Association of Mutual Funds in India (AMFI) is another body which is responsible for developing the mutual fund industry in India.

Categories Of Mutual Fund

Categories or types of mutual funds is also one of the topics covered in a mutual fund investment guide. Since mutual fund schemes are designed to suit the customer’s requirements, there are various types of mutual funds. For instance, a risk seeking individual would invest in a fund whose stakes in equity markets are higher. In contrast, an individual who is risk averse would invest in a scheme having more exposure in debt and fixed income instruments. Based on these requirements, mutual funds are classified into various categories like Equity Funds, Debt fund, index funds, and so on. Mutual Fund also offers one of the best tax saving Mutual Fund scheme- ELSS, which is a type of equity funds.

Equity Funds

Equity funds refer to the mutual fund schemes that invest a predominant portion of their corpus amount in equity shares of different companies. This mutual fund schemes do not offer fixed returns as their performance is dependent on the performance of underlying equity shares. These funds can be considered as a good option for long-term investment purposes. The various categories of equity funds include Large cap funds, Small cap funds, ELSS, sectoral funds, etc.

Best Equity Mutual Funds to Invest in 2020

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2019 (%)
Franklin Asian Equity Fund Growth ₹25.8559
↓ -0.06
DSP BlackRock US Flexible Equity Fund Growth ₹29.4549
↓ -0.56
SBI Small Cap Fund Growth ₹57.2848
↑ 0.77
Principal Emerging Bluechip Fund Growth ₹105.8
↑ 2.34
Kotak Equity Opportunities Fund Growth ₹122.685
↑ 2.59
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Sep 20

Debt Funds

Also referred to as fixed income funds, the corpus of these funds is mostly invested in fixed income instruments. Some of the assets forming part of the debt funds include treasury bills, commercial papers, certificate of deposits, government bonds, corporate bonds, and so on. The debt funds are classified on the basis of maturity profile of the underlying assets, for instance, Liquid Funds whose portfolio consists of assets having a maturity period of less than or equal to 90 days. These funds are considered by risk-averse investors whose risk appetite is low.

Best Debt Mutual Funds to Invest in 2020

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2019 (%)
PGIM India Short Maturity Fund Growth ₹34.7394
↓ -0.01
ICICI Prudential Long Term Plan Growth ₹27.056
↓ -0.03
Aditya Birla Sun Life Corporate Bond Fund Growth ₹83.3843
↓ 0.00
HDFC Corporate Bond Fund Growth ₹24.2168
↓ -0.01
HDFC Banking and PSU Debt Fund Growth ₹17.3598
↓ -0.01
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Sep 20

Index Funds

Index funds also known as index tracker funds refer to the mutual funds whose performance is based on the performance of an index. The underlying assets of an index fund are similar to that as held by a particular index in the same proportion.

Best Index Funds to Invest in 2020

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2019 (%)
ICICI Prudential Nifty Next 50 Index Fund Growth ₹23.331
↑ 0.60
IDBI Nifty Junior Index Fund Growth ₹19.8585
↑ 0.43
SBI Bluechip Fund Growth ₹37.684
↑ 0.89
Aditya Birla Sun Life Frontline Equity Fund Growth ₹210.16
↑ 4.99
Nippon India Large Cap Fund Growth ₹29.4147
↑ 0.79
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Sep 20

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Mutual Fund Investment Guide: Selecting Best Mutual Funds

Selecting the best mutual fund is one of the challenges that individuals face while Investing in mutual funds. To overcome this challenge, mutual fund investment guide explains How to select the best mutual fund as per the individual's requirement. The primary concern of individuals is whether my mutual fund investment will give me best returns. Most individuals generally invest in a mutual fund by just considering its ranking which is a misnomer.

Before selecting a mutual fund, individuals should specify their objectives first. Without determining their objective or the goal to be achieved, individuals would not be able to select a mutual fund based that is in-line with their objectives. Post determining their objective, individuals then search for the mutual fund as per their requirements. While investing in mutual funds, individuals should consider various parameters like past performance of the fund, its due diligence process, credentials of the fund manager in-charge of the fund, entry and exit load attached to the fund, expense ratio of the fund, and many other related factors. In addition, they also should assess the performance of the fund house.

Mutual Fund Calculator

mutual fund calculator is one of the areas that is explained in this mutual fund investment guide. Also known as the sip calculator, mutual fund calculator helps individuals to understand how much amount they need to invest now in order to fulfill their objectives. There are various calculators available with respect to planning for retirement, purchasing a house, purchasing a vehicle, planning for higher education, and other goals that individuals wish to achieve.

Advantages Of Mutual Fund Investment

Any mutual fund investment guide always shows the benefits of investing in a mutual fund scheme. Some of the advantages of the mutual funds include:

  • Diversification wherein the money collected is invested in a group of assets instead of a single asset.
  • Professional Management which means that the mutual funds are managed by professional managers also known as the fund manager. These professionals invest the money only after a thorough research of the company.
  • liquidity which means the mutual funds can be easily converted into cash. In other words, individuals can easily get in and get out of mutual funds.

Investing In Mutual Funds

A Mutual Fund investment guide also talks about how to invest in mutual funds too. Investment in mutual funds can be done through various channels. Some of the prominent channels of mutual fund investment include directly through the mutual fund company, independent financial advisors, mutual fund brokers, online portals, and other channels.

How to Invest in Mutual Funds Online?

  1. Open Free Investment Account for Lifetime at

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

    Get Started


In addition, mutual fund investment guide also covers certain additional information such as the best mutual fund schemes to invest, the future of mutual fund industry in India, performance of mutual fund industry, and other aspects. Mutual fund investment guide serves as a companion those who want to invest in mutual funds, however, are not much familiar with the investment process. Thus, individuals should go through the mutual fund investment guide so that their process of investment becomes easier and can reap maximum benefits from mutual fund investment.

All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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