A mutual fund is managed by professionals and is a collaboration of a group of people who invest their money in stocks, bonds and other securities. Well, SIP or systematic investment plan allows an individual to deposit a fixed amount regularly in a mutual fund scheme.
Many investors often remain in a dilemma as to which mutual fund will be the most appropriate. For that purpose, there is a list of 10 best mutual funds for SIP given below.
1. Money market funds:
This would be one of the best funds for investors who tend to invest for a short-time period. This enables one to earn money from the shareholders and maintains a NAV of $1 per share.
2. Fixed income funds:
Here, real return rates or periodic income can be received at regular intervals and periodic levels. For the reliability of the return policies, these funds allow retired investors to feel safe investing here.
3. Equity funds:
The equity funds are also known as growth funds. They provide the benefit of professional management and diversification to ordinary investors.
4. Speciality funds:
As the name suggests, this fund invests money in a particular sector or in a single industry. Diversification is not observed here and hence, this is risky. Sector funds and regional funds fall under this category.
5. Balanced funds:
It is a dynamic assimilation of safety, income and capital appreciation. Moreover, one has to invest in a portfolio of both fixed income and equities.
6. Large-cap schemes:
Large-cap mutual funds invest in large market capitalizations. Being steady compounders and regular dividend players, they are preferred a lot.
7. Debt short-term funds
These funds make sure of tax-free returns and lower tax outgo. They involve low risk as they invest in the highest credit rated debt paper.
8. ETF funds:
The full name is exchange-traded fund. This is a marketable security and tracks an index, commodity etc. they have higher daily liquidity and lower fees.
9. Fund of funds:
This very interesting mutual fund indulges the investors to invest in other types of funds.
10. Tax saving funds:
They are similar to other mutual funds with an added bonus that investments made in them are able to enjoy tax benefits under section 80C.
Thus, these were the top 10 best mutual funds for SIP.
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