Most investors in India consider mutual funds one of the most important aspects of managing personal finance. They give a means of spreading investment risks and generating higher revenue as compared to the saving methodologies of yesteryears.
Over the years, mutual funds have become a major way of investment into different companies. Some of the mutual funds in the year 2024 have outshone themselves, performing very well. This paper identifies the seven best performing mutual funds of the year and gives a quick insight into what mutual funds are, their types, and how well one should invest in them.
What Is a Mutual Fund?
A mutual fund is a vehicle that pools money from the public and invests in stocks, bonds, or other securities towards a pre-defined objective. Mutual funds are managed by professional fund managers, offering investors the advantage of diversification and professional management, apart from the possibility of higher returns. The body governing them is the Securities and Exchange Board of India, for some amount of safety and transparency, or the opposite.
Varieties of Mutual Funds
Value Funds: Such funds follow value investment strategy. They are suitable for investors looking for long term appreciation of their investments.
Fixed Income Funds: These are funds investing mainly in fixed-income-type securities, such as bonds, and are suited to conservative investors seeking steady income.
Hybrid Funds: These are funds that invest in a mix of equities and debts with the objective of balancing risk with return.
ELSS Funds– Equity Linked Saving Schemes: These are basically tax-saving funds under the Income Tax Section 80C and are mainly equity-oriented.
How to Invest in Mutual Funds
Direct Investment: Investors can carry out investments directly through the mutual fund company’s website.
Through an Advisor: An advisor provides custom advice and access to the investment process.
Online Platforms: These are the online platforms where you can find several options for mutual funds, which make it easier for mutual fund investors to compare and invest in.
Also read – How to exit a non performing stock
Top Performing Mutual Funds in 2024
- Nippon India Large Cap Fund
- Type: Large-cap fund
- 5-year return: 94.01%
- Overview: The Nippon India Large Cap Fund has demonstrated robust performance by focusing on large-cap stocks, which are typically more stable and have a proven track record. This fund is ideal for investors looking for stability and consistent growth over the long term.
- ICICI Prudential Bluechip Fund
- Type: Large-cap fund
- 5-year return: 81.39%
- Overview: Known for its strategic allocation in high-quality blue-chip companies, the ICICI Prudential Bluechip Fund has been a reliable performer. This fund is suitable for investors who prefer investing in established companies with a strong market presence.
- JM Large Cap Fund
- Type: Large-cap fund
- 5-year return: 80.78%
- Overview: The JM Large Cap Fund has shown commendable returns by investing in well-established large-cap stocks. It caters to investors seeking lower volatility and long-term capital appreciation.
- Quant Active Fund
- Type: Multi-cap fund
- 5-year return: 141.24%
- Overview: The Quant Active Fund has outperformed many of its peers by maintaining a diversified portfolio across different market capitalizations. Its flexible approach allows it to capitalize on opportunities in various segments of the market, making it a great choice for growth-oriented investors.
- Nippon India Multicap Fund
- Type: Multi-cap fund
- 5-year return: 128.22%
- Overview: With a strong performance record, the Nippon India Multicap Fund invests across large-cap, mid-cap, and small-cap stocks. This strategy helps in balancing risk and return, appealing to investors who want exposure to different market segments.
- Mahindra Manulife Multi Cap Fund
- Type: Multi-cap fund
- 5-year return: 113.68%
- Overview: The Mahindra Manulife Multi Cap Fund has delivered impressive returns by maintaining a well-diversified portfolio. It focuses on identifying growth opportunities across various sectors, providing a balanced approach to investing.
- Bank of India ELSS Tax Saver
- Type: ELSS fund
- 5-year return: 116.05%
- Overview: The Bank of India ELSS Tax Saver fund not only offers excellent returns but also provides tax benefits under Section 80C. It is ideal for investors looking to save on taxes while investing in a growth-oriented equity fund.
Predictions for Mutual Funds in India Over the Next 5 Years
The mutual fund industry in India is poised for remarkable growth over the next five years, driven by increasing investor awareness, digital transformation, and favorable economic policies. As more individuals recognize the benefits of systematic investment plans (SIPs) and diversified portfolios, mutual funds are expected to see a surge in participation from both urban and rural areas.
Technological advancements, such as AI-driven analytics and robo-advisors, will further personalize investment strategies, making them more accessible and efficient. Additionally, the government’s push for financial inclusion and regulatory measures aimed at safeguarding investor interests will enhance confidence in mutual funds. With these positive trends, the industry is likely to witness robust expansion, offering diverse and lucrative opportunities for investors seeking to maximize their wealth.
Why Invest in Mutual Funds
Diversification: Mutual funds have a common feature in spreading investments across various assets or securities, and therefore.
Professional Management: Professional fund managers practice their professional capacity towards making decisions on which investments should be selected.
Liquidity: Mutual funds are easy when it comes to buying and selling; this feature gives investors convenience and makes them liquid.
Accessibility: Mutual funds have the ability to appeal to many investors because the minimum required investment in the fund is relatively low.
Conclusion
Mutual funds are rewarding not only for fresh investors but also investment gurus. The best mutual fund gives good returns in a diverse category for the year 2024, as in the gains above. The amount invested in mutual funds for any purpose, whether it be stability through large-cap funds, growth through multi-cap funds, or tax saving through the help of ELSS funds, mutual funds serve every purpose of investment.
Always remember your investment horizon, risk appetite, and financial goals before you invest. A financial adviser would certainly help in this regard so that you customize your investment strategy according to your life situation. These are the concepts that you have to learn and understand in order to make decisions for your investments that are much wiser, thus allowing you to reach your financial ambitions.
Inputs take from livemint