Many want to diversify their financial portfolio by investing in different instruments which yield the best returns. Out of the many options available today, Mutual Funds are one of the most preferred options which many choose, however a majority of them are not aware of how to choose the right Mutual Funds that would give the desired returns. According to ET Money if one wants to get attractive returns, they need to select the best mutual funds in India. Before the start of your investment journey, you need to do extensive homework on this subject which will ensure you don’t put in your hard-earned money which would give zero results or ROI.
One has to keep in mind that your Mutual Funds portfolio should have a healthy mix of different schemes like equity hybrid schemes, large cap, mid-cap, small cap and flexi cap schemes, which would suffice the investment targets of a regular Mutual Funds investor. Furthermore, one should keep in mind some important points before investing in these diversified schemes by finding out in depth about each category and whether it suits your investment objective and risk profile or not.
Talking about equity hybrid schemes which are less volatile than traditional equity schemes, offering a mix of equity and debt, are considered to be ideal for those who want the returns of equity schemes but with lesser risk. Second in line are large cap schemes, which invest in top stocks and are also comparatively safer than mid-cap and small cap schemes, making it one of the best mutual funds to invest if one is looking to balance risk with returns.
For aggressive investors who don’t mind taking that extra risk for better returns, mid-cap and small cap schemes are ideal. Mid-cap schemes invest majorly in medium-sized companies, and small cap funds invest in smaller companies in terms of market capitalisation. Despite being extremely volatile, they can offer superior returns over a long period of time. One looking for long term investment can go for these schemes.
For investors who carry a moderate risk appetite, flexi cap mutual funds or diversified equity schemes are ideal as they invest across distinct sectors according to the research done by the fund manager. Investors can capitalize from the spurt of growth in any of the sectors by investing in these schemes.
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