Investing in mutual funds can be a powerful way to grow wealth over time, especially for those looking for systematic and disciplined investment options. With so many choices available, selecting the right mutual funds requires careful evaluation to align with personal goals and risk tolerance.
Mutual fund investments have gained popularity for their potential to offer high returns while catering to varying risk appetites. This year, funds such as the Nippon India Small Cap Direct and Quant Small Cap Direct are showing promising performance, particularly for Systematic Investment Plan (SIP) investors seeking reliable growth over the long term.
Let’s explore other top mutual fund schemes and understand the key criteria to consider when selecting the best funds for your portfolio.
Other top mutual funds in 2024
- Nippon India Large Cap Direct
- Motilal Oswal Mid Cap Direct
- Tata Small Cap Direct
- Quant Mid Cap Direct
- Nippon India Flexi Cap Direct
5 key points to choose the best performing mutual funds
1. Historical performance
Examine a fund’s past performance over different time periods, such as one, three, five, and seven years. Consistency in delivering strong returns compared to benchmarks can indicate a fund’s potential for future growth but remember that past performance does not guarantee future success.
Also, check if the fund has performed well in both bullish and bearish market phases.
2. Expense ratio
This is the annual fee charged by the fund, affecting your overall returns. Opt for funds with lower expense ratios, especially if you are investing over a long period, as these fees can accumulate and reduce net returns.
A lower expense ratio can be particularly advantageous for SIP investors aiming for cost-effective, long-term growth.
3. Risk profile
Choose funds based on your risk tolerance. Small-cap and mid-cap funds generally have higher potential returns but come with increased risk, while large-cap funds are comparatively stable.
Consider the volatility of each fund type to ensure it aligns with your financial comfort zone.
4. Fund manager’s expertise
The fund manager’s experience and track record play a crucial role in navigating market fluctuations. A manager with a history of making prudent investment choices can significantly enhance a fund’s performance over time.
Researching the manager’s investment style and previous achievements can give insights into how they handle changing market conditions.
5. Investment goals
Align your choice of mutual funds with your financial goals, whether it is wealth accumulation, income generation, or specific life goals like retirement. Different funds serve different purposes, so make sure the fund’s objectives match your personal objectives.
Matching your timeline with the fund’s investment horizon is key to achieving the desired outcomes.
Ending Note
Choosing the best mutual fund investments in 2024 involves careful consideration of factors such as performance, expense ratios, risk, fund manager’s expertise, and your own financial goals. By focusing on funds that meet these criteria, you can create a diversified and resilient portfolio.
SIPs make mutual fund investments accessible and systematic, allowing investors to gradually build wealth with discipline. Remember, with the right approach, mutual fund investments can provide a strong foundation for achieving financial aspirations.