Before discussing the best mutual funds to invest in 2024, lets understand what is mutual fund: a mutual fund is an investment fund managed by an assets management company where an investor invests its funds and then the asset management company invests those funds in various securities based on common financial goals with the help of a financial expert on behalf of the investors.
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In return, the Asset Management Company keeps 1-2% of the collective returns on the investment as fees or charges. The risk and return on Mutual funds depends on where funds are invested by the Asset Management Company. There are different types of Mutual Funds.
They are as follows:
Equity Mutual Funds
Equity Mutual funds are those mutual in which the funds are invested in the Stock Market and thus this mutual fund consists of high risk and high returns.
If the funds are invested in big companies then it is known as Large Cap Equity Funds and if you invest in small companies then it is known as small-cap equity funds and similarly, there are mid-cap equity funds.
Diversified Equity Funds
Diversified Mutual Funds are those Mutual funds where the funds are invested in Mid Cap Funds, Large Cap Funds, and Small Cap Funds or it is invested in different companies.
Diversified Equity Funds are also known as Multi-Cap Funds.
Here the risk is comparatively low compared to equity mutual funds. Some examples of diversified equity funds are Axis Long-Term Equity Fund, ICICI Prudential Long-Term Equity Fund Tax Saving, and SBI Magnum Long-Term Equity Scheme.
ELSS Equity Linked Savings Schemes
(ELSS) Equity Linked Savings Schemes are tax-saving mutual funds in India that come with a 3-year lock-in period and the investor can redeem their fund after the lock-in period is over.
Compared to other mutual funds ELSS is the only Mutual Fund eligible for tax deductions under provisions of Section 80C of the Income Tax Act, 1961 where an investor can claim a tax rebate of up to Rs. 1,50,000.
Sector Mutual Funds
In this type of mutual fund, all the investment is made in specific one-sector companies i.e. if you want to invest in the agriculture sector then all the funds are invested in companies under the agriculture sector.
These types of mutual funds are very risky because funds are invested in one specific sector and there is no diversification. For example UTI Transportation and Logistics Funds.
Index Mutual Funds
Index Funds are passively managed funds these funds depend on the movement of Sensex and nifty. It tracks and attempts to replicate the performance of a market index such as the NIFTY 50, NIFTY Next 50, Sensex, etc.
Debt Mutual Funds
Debt mutual funds are those mutual funds that are invested on the debt instruments. There are various types of debt instruments such as bonds, debenture, certificates of deposits, etc. These types of mutual funds consist of low risk and low return.
There are different types of Debt Mutual Funds such as:
Liquid Funds
Liquid funds are those funds that can be easily and quickly converted to cash. Liquid Funds invest in short-term, good quality, and liquid securities with maturities of upto 91 days.
We can also call liquid funds an alternative to savings accounts as they consist of very low risk. An example of a liquid fund is Essel liquid fund direct growth.
Gilt Funds
Gilt funds are a type of Debt Mutual Fund in which investments are made in bonds and securities issued by the State Government and Central Government.
These funds contain Minimal risk as the money is invested with the government.
Fixed Maturity Plan
Fixed Maturity Plan is an alternative to Fixed Deposit as it contains very low risk as fixed deposit. Here investment is made for a specific period of time and you cannot withdraw the money before the maturity period.
Hybrid Mutual Funds
Hybrid mutual funds are a mixture of debt and equity funds. This type of mutual fund is for people who do not want to invest in only the stock market but in debt and equity funds.
These types of mutual funds contain low risk and are for investors looking for a balance of capital preservation and growth potential.
An example of the best-performing hybrid Mutual Fund is Quant Multi Asset Fund Direct-Growth.
Equity-oriented Hybrid Funds
Equity-oriented hybrid funds are those funds in which 65% of the total asset is invested in equity and equity-related instruments of companies across various market capitalizations and sectors and the rest 35% of the total asset is invested in debt securities and money market instruments.
Debt-oriented Hybrid Funds
Debt-oriented hybrid funds are those funds in which 60% of the total asset is invested in fixed-income securities like bonds, debentures, and government securities, and the rest 40% of the total asset is invested in equity and equity-related instruments of companies across various market capitalizations and sectors.
Some funds invest a small amount of the total asset in a liquid scheme.
Balanced Funds
Balanced Funds are those funds in which 70% of the total asset is invested in equity and equity-related instruments of companies across various market capitalizations and sectors and the rest 30% of the total asset is invested in securities like bonds, debentures, and government securities.
When it comes to Taxation these funds are considered to be equity funds and offer tax exemption on long-term capital gains of up to Rs. 1 lakh.
Factors to consider before Choosing Best Mutual Funds to Invest in 2024
There are many factors to be considered before choosing the best mutual funds to invest in 2024 such as how much risk you can tolerate and what is your financial goal; how much money you want to invest and for how much time you want to invest your money, depending upon these factors you will be able to choose best mutual funds to invest in 2024.
Financial Goal
Before investing your money in any mutual fund first, you need to understand what your financial goals are after deciding your financial goals you can choose whether you want to invest your money in debt-oriented or equity-oriented mutual funds or hybrid mutual funds depending upon the risk level and liquidity they offer and most important the return percent should match your financial goal.
Time Period
Time period is an important factor that plays a great role in choosing the best stock to invest in 2024 as it has a direct impact on the return percentage of your investment.
You can invest your money in both long-term. i.e. Period more than 5 years and short term. i.e. Period of less than 5 years.
If you want to invest your money for a short period of time then you should look for funds that invest in stocks and bonds with higher risk but higher potential return and if you want to invest your money for the long term then you should look for low-risk investments with smaller returns but steady growth over time.
Risk Tolerance
Risk Tolerance means how much risk you can take with the money you want to invest in the market. If you want to take low-risk or very low risk then debt mutual funds are the best option for you and if you can take high risk with the money you are investing in the mutual funds then Equity based mutual funds can be a better option for you.
Fund Performance
After considering the above factors the next step is to analyze the fund performance and whether it has given good returns in the past few years and if yes then it is a good fund to invest in.
You should invest in funds without checking all the aspects such as performance of the last 5 years, returns, maturity, and risk.
Taxes
The last factor that is to be considered before choosing the best mutual funds to invest in 2024 is the taxes. Taxes must be considered while choosing the best mutual funds as some funds are taxable and some are not.
A balanced fund offers tax exemption on long-term capital gains of up to Rs. 1 lakh as these funds are considered to be equity funds.
Thus, these are the important factors that are to be considered before choosing the best mutual funds to invest in 2024 and there are more factors that you can look at such as expense ratio, fund managers’ experience, etc.
Lists of Best Mutual Funds to Invest in 2024
| S.NO | FUNDS NAME | FUNDS SIZE |
| 1 | Parag Parikh Flexi Cap Fund Direct-Growth | ₹48,293.88 Cr |
| 2 | Mirae Asset Large Cap Fund Direct-Growth | ₹36,132.35 Cr |
| 3 | UTI Flexi Cap Fund Direct-Growth | ₹25,503.37 Cr |
| 4 | Kotak Emerging Equity Fund Direct-Growth | ₹36,527.95 Cr |
| 5 | Axis Small Cap Fund Direct-Growth | ₹17,915.66 Cr |
Let’s discuss the Funds which are listed above under the head best mutual funds to invest in 2024
Parag Parikh Flexi Cap Fund Direct-Growth
Parag Parikh Flexi Cap Fund Direct-Growth is a Equity Mutual Fund Scheme launched by PPFAS Mutual Fund. The main objective of this fund is to achieve long-term capital appreciation by investing primarily in equity and equity-related instruments.
The fund size of this mutual fund is ₹48,293.88 Cr and it is rated 5 stars. The minimum investment for SIP and One-time payment is ₹ 1000.
Parag Parikh Flexi Cap Fund Direct-Growth has an annual return of 38.4% and it is rated very high risk. The total Assets Under Management (AUM) of this fund is ₹54,459.66 Cr.
Mirae Asset Large Cap Fund Direct-Growth
Mirae Asset Large Cap Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Mirae Asset Mutual Fund. The main objective of this fund is to achieve long-term capital appreciation by investing in equity and equity-related instruments.
The fund size of this mutual fund is ₹ 36,132.35 Cr and it is rated 4 stars. The minimum investment for SIP is ₹500 and One-time payment is ₹ 5000.
Mirae Asset Large Cap Fund Direct-Growth has an annual return of 19.4% and it is rated very high risk. The total Assets Under Management (AUM) of this fund is ₹1,51,718.15 Cr.
UTI Flexi Cap Fund Direct-Growth
UTI Flexi Cap Fund Direct-Growth is an Equity Mutual Fund Scheme launched by UTI Mutual Fund. The main objective of this fund is to achieve long-term capital appreciation by investing predominantly in equity and equity-related instruments.
The fund size of this mutual fund is ₹25,503.37 Cr and it is rated 2 stars. The minimum investment for SIP is ₹500 and One-time payment is ₹ 5000.
UTI Flexi Cap Fund Direct-Growth has an annual return of 21.1% and it is rated very high risk. The total Assets Under Management (AUM) of this fund is ₹2,73,674.64 Cr.
Kotak Emerging Equity Fund Direct-Growth
Kotak Emerging Equity Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Kotak Mahindra Mutual Fund. The main objective of this fund is to achieve long-term capital appreciation by investing predominantly in equity and equity-related instruments of mid-companies.
The fund size of this mutual fund is ₹36,527.95 Cr and it is rated 4 stars. The minimum investment for SIP is ₹100 and One-time payment is ₹100.
Kotak Emerging Equity Fund Direct-Growth has an annual return of 33.0% and it is rated very high risk. The total Assets Under Management (AUM) of this fund is ₹3,50,070.82 Cr.
Axis Small Cap Fund Direct-Growth
Axis Small Cap Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Axis Mutual Fund. The main objective of this fund is to achieve long-term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies.
The fund size of this mutual fund is ₹17,915.66 Cr and it is rated 5 stars. The minimum investment for SIP is ₹100 and the One-time payment is ₹100.
Axis Small Cap Fund Direct-Growth has an annual return of 36.9% and it is rated very high risk. The total Assets Under Management (AUM) of this fund is ₹2,62,558.91 Cr.
Thus, these are the best mutual funds to invest in 2024 according to the current market situation and you can choose the best mutual funds that are suitable to your financial goals by considering the factors which are highlighted and explained above and start your investment journey.
