Best Mutual Funds to invest through Systematic Investment Plan


Best Mutual Funds to invest through Systematic Investment Plan

Investors who are planning to invest their money and are ready to take some risks to get high returns should go for small-cap mutual funds. These funds do offer high returns when the market is going good, but when the market faces a downfall, these funds can be highly affected and that’s when the risk factor comes into being.
 
Best Mutual Funds to invest through Systematic Investment Plan
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Before getting into the best and not so best mutual fund investments, let’s go through some different kinds of mutual fund investments that are small or large-cap mutual funds and also how the investors are going to decide on that.

What are small-cap mutual funds?

The funds that are invested in companies that are below the top 250 stocks, in the exchange as per the capitalization of the market are called small-cap mutual funds. The returns are quite high as per the other options.

Before taking this up just because of its high returns should not be done and the investors are suggested to check on the risk factors as all the mutual funds are liable to some risk factors. So before going for these small-cap mutual funds, the following factors should be kept in mind for the investor:

  • The risks- Everything in this world has some risk factors so as the best small-cap mutual funds. But despite some risks, they do provide good returns which cannot be denied. An investor should look for some small-cap funds that provide a good return and at the same time are less risky.
  • The return- Providing high returns is the key factor of small-cap mutual funds. These funds specialize in providing great returns with little risks, which others might not be able to give.
  • The Cost- The cost and the expense is managed well in terms of your investment. For a fund related matter this is known as the ratio of the expense of a fund which is specified by SEBI. 2.50% is the percentage that is ideally limited by SEBI as the same.
  • The Goal- When the situation is critical and everyone is going through a crisis then even the best small-cap funds can face a bad situation and decrease their return rates. So, to stick to a better plan even if the situation gets worse, one should go for long term plans which would be helpful later in the future.
  • Taxation-Small units of small-cap mutual funds are redeemed to gain capitals. The rate of taxation depends on how long the amount was held in these types of funds.

How to invest in small-cap mutual funds?

Nowadays, everything has become digital to make everyone calmly sit at home and do the needful. Investing in Small Cap Funds is a very simple and hassle-free process that everyone can easily follow. Please follow these steps below:

  • Download an online investment app or its website from your search engine.
  • A page will open to show you various fund options
  • Find and choose the one Small Cap Fund you want to invest in
  • Click on Invest Now, enter the amount and mode of investment
  • Provide necessary details like Pan & Bank Details
  • After entering all the details and completing the necessary steps, you’re done!

Let’s now see, the top 5 best small-cap funds that one can go for! Here, we will also show you the returns for 3 years and 5 years that each one gives.

  1. SBI Small Cap Mutual Fund

Return on investment for 3 years- 7.62%

Return on investment for 5 years- 13.06%

  1. Axis Small Cap Mutual Fund

Return on investment for 3 years- 15.29%%

Return on investment for 5 years- 14.79%

  1. HDFC Small Cap Mutual Fund

Return on investment for 3 years- 1.33%

Return on investment for 5 years- 8.75%

  1. Nippon India Small Cap Mutual Fund

Return on investment for 3 years- 3.58%

Return on investment for 5 years-   10.21%

  1. Kotak Small Cap Mutual Fund

Return on investment for 3 years- 5.75%

Return on investment for 5 years- 9.13%

What are large-cap mutual funds?

Based on market capitalization, mutual funds are divided into 3 types of small-cap mutual funds, mid-cap mutual funds and large-cap mutual funds. Funds that invest more of their parts in companies that have big market capitalization are known as large-cap mutual funds. They also provide a good return on investments for its investors with very fewer risk factors.

Let’s discuss some benefits of investing in large-cap mutual funds:

  • Have the potential of earning more growth and profit
  • Comes with low-risk factors and if analyzed in totality, this gives the best returns than others
  • These funds don’t easily get much affected even if the market condition is poor. Approximately 3years returns on investments in this funding system are between 50-60%, which is quite good.
  • These are for long terms, so chances of money loss are also less.

Now let’s focus on the top 5 best large-cap mutual funds. Here, we will also show you the return on investment for 1 year.

  1. Axis Bluechip Fund

Return on investment for 1 year- 3.7%

  1. Mirae Asset Large Cap Mutual Fund

Return on investment for 1 year- 6.0%

  1. Invesco India Large Cap Mutual Fund

Return on investment for 1 year- 6.8%

  1. Canara Robeco Bluechip Equity Fund

Return on investment for 1 year- 11.8%

  1. Kotak Bluechip Fund

Return on investment for 1 year- 7.8%

Bottomline

In simple words, investors who are planning to invest their money and are ready to take some risks to get high returns should go for small-cap mutual funds. These funds do offer high returns when the market is going good, but when the market faces a downfall, these funds can be highly affected and that’s when the risk factor comes into being.

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