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Business

5 Mutual funds that are perfect for the first time investors in 2019

5 Mutual funds that are perfect for the first time investors in 2019
Sarah Alice
June 5, 2019

Many millennials have and would be joining the workforce in the coming months. There might be many hopes of being financially independent and earning on our potential savings. Not just these millennials, there would be many salaried and other professionals who might be contemplating on starting their investing journey.

What best way to do this than by starting a Systematic Investment Plan, which has become the talk of the town lately.

Mutual funds

Therefore in this article, we bring to you five best mutual funds to invest if we are starting with our investing journey in the markets. We have made sure to include various categories of funds basis the risk tolerance of our investors.

The funds include large cap, large and mid-cap, mid-cap, small cap and ELSS funds. An investor can look into these funds and invest based on predetermined goals and risk appetite. Also, we should make sure to hold on to these funds for a long term horizon (5 to 10 years or more).

Let’s begin!

Let us now look at all of these funds in detail so that we can gauge which funds would be the best for us.

  1. ICICI Prudential Bluechip Fund – Direct – Growth

ICICI Prudential Bluechip Fund is one of ICICI Mutual Fund’s flagship products. It was launched in 2013 and has a strong track record of robust performance since inception. It has beaten its benchmark S&P BSE 100 TRI since inception. The fund is managed by strong professional managers such as Rajat Chandak and Priyanka Khandelwal who have huge experience in the field of investment management.

Focuses mainly on key sectors and names such as HDFC Bank Ltd., ICICI Bank, ITC Ltd., Infosys, HDFC Ltd., ONGC etc this fund will provide enough opportunities to provide capital appreciation in key sectors which are poised to grow (Financials, consumer goods, energy)

Key Information:

Launch Date 01 – Jan – 2013
AUM (Size) 21,846 crores
Minimum SIP 100
Minimum for First Investment 100
Performance w.r.t its benchmark Has beaten the benchmark S&P BSE 100 TRI over consistent periods of time
Age of the fund 6 years
Expense Ratio 1.31%
Turnover                    98%
Exit Load If the fund is redeemed between 0 to 12 months, exit load is 1%
Type Large Cap
Fund Manager Rajat Chandak, Priyanka Khandelwal, Anish Tawakley

Investment Objective

The investment objective for the fund is two-fold as highlighted below:-

  • The fund managers seek to generate long term capital appreciation and income distribution through investment in 20 large cap stocks (equity and equity related instruments) in terms of market capitalization on the National Stock Exchange (NSE);
  • The fund manager also puts some portion of the fund in debt securities and money market instruments

The investment universe is Top 200 stocks in terms of market capitalization on NSE India Ltd.

Mutual funds

  1. Mirae Asset Emerging Bluechip Fund – Direct – Growth

The benefits of this scheme are endless. Firstly, Mirae AMC as a mutual fund house is doing great. Most of its funds have given tremendous returns for investors. Mirae Asset Emerging Bluechip Fund is no less.

With an expense ratio as low as 0.60 per cent, consistent benchmark-beating returns, strong fund management cadre and a special focus on key sectors such as financials, energy and healthcare have led this fund to be Rank 1 within this category over returns generated (for 1Y and 3Y).

This fund would be a great investment for someone starting out their investing career. The portfolio consists of top names in the industry such as HDFC Bank, ICICI Bank Ltd., Axis Bank Ltd., Reliance Industries Ltd., Bharat Financial Inclusion Ltd., Voltas Ltd. etc. These have provided stable returns over the period and are expected to grow even more in the coming years.

Key Information

Launch Date 01 – Jan – 2013
AUM (Size) 7,271 crores
Minimum SIP 1000
Minimum for First Investment –
Performance w.r.t its benchmark Has beaten the benchmark S&P BSE 250 Large Mid-Cap TRI over consistent periods of time
Age of the fund 6 years
Expense Ratio 0.60%
Turnover                    35%
Exit Load If the fund is redeemed between 0 to 12 months, exit load is 1%
Type Large & Mid Cap
Fund Manager Neelesh Surana, Ankit Jain

 

Investment Objective

The investment objective of the scheme is to generate capital appreciation from a diversified portfolio of equity and equity-related securities. The companies that are selected are not part of the top 100 stocks by market capitalization and have at least INR 100 crores market cap while the time of investing.

At the same time, portfolio managers may also seek to invest in other equity and equity related securities to achieve portfolio construction.

  1. Kotak Emerging Equity Fund-Direct – Growth

Although this fund is in the mid cap category, the volatility of the fund is lower than the benchmark and at the same time beaten its benchmark S&P BSE Midcap TRI consistently. The expense ratio is 0.76 per cent, which is low.

The fund size is also moderate reflecting that there is still a long way to go. Now that mid and small cap space have corrected, we can look to invest in this scheme as the number of units allocated through SIP would be more thereby leveraging on this front at the beginning of our investment horizon.

It would be best for investors to invest in this scheme now and wait for at least five to seven years to see handsome returns generated by the scheme.

Key Information:

Launch Date 01 – Jan – 2013
AUM (Size) 4,028 crores
Minimum SIP 1000
Minimum for First Investment 5000
Performance w.r.t its benchmark Has beaten the benchmark S&P BSE Midcap 100 TRI over consistent periods of time
Age of the fund 6 years
Expense Ratio 0.76%
Turnover                    24%
Exit Load If the fund is redeemed between 0 to 12 months, exit load is 1%
Type Mid Cap
Fund Manager Pankaj Tibrewal

Investment Objective

The investment objective of this fund is to look for potential opportunities in the mid and small cap space and invest in those scrips (equity and equity-related securities) to generate long term capital appreciation

  1. Mirae Asset Tax Saver Fund – Direct – Growth

Mr Neelesh Surana is one of the marquee names in the asset management industry and is also at the helm of affairs for Mirae Asset Tax Saver Fund. With benchmark-beating returns, low expense ratio (0.73 per cent), low fund size and a low portfolio turnover churn rate has made this a 5-star rated fund.

The fund is also in the ELSS category, therefore, inculcates within an investor the habit of disciplined investing as the investment gets locked in for three years. The exit load is also nil for this fund. The portfolio is neatly mixed with high exposure to financials, FMCG, technology etc. sectors.

Therefore if we are starting our investing journey and want the twin benefits of long term capital gains as well as saving taxes, then Mirae Asset Tax Saver Fund is the best fund available under this category.

Key Information:

Launch Date 28 – Dec – 2015
AUM (Size) 1,949 crores
Minimum SIP 500
Minimum for First Investment 500
Performance w.r.t its benchmark Has beaten the benchmark S&P BSE 200 TRI over consistent periods of time
Age of the fund 3 years
Expense Ratio 0.73%
Turnover                    23%
Exit Load Nil
Type ELSS
Fund Manager Neelesh Surana

 

Investment Objective

The investment objective of the scheme is to generate long term capital appreciation from a diversified portfolio of predominantly equity and equity related instruments.

  1. HDFC Small Cap Fund – Direct – Growth

As the performance of the fund has dropped in the last one year due to the correction in mid and small cap space, HDFC Small Cap Fund is one of the ripe investments that we can make this year. The sharp fall happened due to the market correction and there are no signs of worry.

However, this actually gives us a great opportunity to invest in this scheme.

On the contrary, if we look closely into the portfolio of the scheme, it suggests that a great picture lies ahead.

The businesses in the portfolio have exhibited robust performance over the years and are ripe in terms of fundamentals (some of them are Aurobindo Pharma, Sonata Software, KEC International, Jammu & Kashmir Bank, Balkrishna Industries, Gujarat Fluorochemicals Ltd., ). Also, a small portion is also invested in equity derivatives.

 

 

Key Information:

Launch Date 01 – Jan – 2013
AUM (Size) 7,660 crores
Minimum SIP 500
Minimum for First Investment 5000
Performance w.r.t its benchmark Has beaten the benchmark S&P BSE Smallcap 100 TRI over consistent periods of time
Age of the fund 6 years
Expense Ratio 0.86%
Turnover                    37%
Exit Load If the fund is redeemed between 0 to 12 months, exit load is 1%
Type Small Cap
Fund Manager Chirag Setalvad, Amar Kalkundrikar

 

Investment Objective

The investment objective of the fund is to generate long term capital appreciation for the investors by investing in three major instruments namely:-

–          Equity and equity related instruments;

–          Equity Derivatives

Conclusion

Through this article, we have made sure to include different categories of mutual funds available in the markets. This, therefore, encompasses selecting mutual funds based on our risk tolerance. If we are more risk averse, it is better to stick to funds from large cap categories such as ICICI Prudential Bluechip Fund, Mirae Asset Emerging Bluechip Fund and Mirae Asset Tax Saver Fund. These three funds have a higher exposure to large caps and hence are less prone to volatility.

At the same time, if we have a higher risk appetite and are willing to wait for a long time for our investments to fructify (at least five years), funds such as Kotak Emerging Equity Fund and HDFC Small Cap Fund would be the most sought after funds.

Therefore, we must resolve to stick to our goals and adjudge our risk profile while taking the dive into the world of mutual funds.

 

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Business
June 5, 2019
Sarah Alice

Love to write about entrepreneurship and Technological solution in the World.

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