Best Mutual Funds in India for Long Term Planning

A mutual fund is a collective investment vehicle that collects & pools money from a number of investors and invests the same in equities, bonds, government securities, money market instruments. The money collected in mutual fund scheme is invested by professional fund managers in stocks and bonds etc. in line with a scheme’s investment objective.

The income / gains generated from this collective investment scheme are distributed proportionately amongst the investors, after deducting applicable expenses and levies, by calculating a scheme’s “Net Asset Value” or NAV. In return, mutual fund charges a small fee. Following are Best Mutual Funds in India for Long Term Planning:

Balanced Advantage Funds:

Balanced Advantage Funds are financial instruments that invest in a mix of both equity and debt segments in specific ratios. These funds also known as hybrid funds. They enable investors to diversify their mutual fund-based portfolios. Balanced mutual funds are mostly equity-oriented and invest 65-70% in equity shares. The biggest advantage of investing in these funds is that they ensure capital appreciation and provide a safety net against potential risks.

Multi-Asset Allocation Fund:

Multi-Asset Allocation Fund are combination of asset classes that are comprises of Equity, Debt, Gold, REITs etc. The allocation of assets and their composition tends to vary depending on an individual investor. An investor can invest up to 80% of capital in either of the asset class. Mutual Funds units and stock lending up to 20% of assets can be a probable investment prospect for the said fund.

Retirement Fund:

Retirement funds, also known as pension funds, are investment options that allow an individual to save a certain portion of their income for their retirement. Retirement mutual fund plans usually invest in low risk investment options, like Large cap Shares, Government-securities, to ensure steady returns. However these funds have Lock-in Period of 5 Years and no redemption is allowed till the lock-in period.

Children’s Fund:

Children’s fund is a form of mutual fund with specific child-related goals and terms. These are a commonly availed investment option, acting as solution-oriented plans for the rising cost of education and other essential expenses. Most mutual fund child plan invests in both equity and debt portfolios. Investors can also choose between higher debt and higher equity-based investment depending on their risk appetite and time horizon.

Disclaimer: The author, Mr. Rameshwar Lal is NISM/AMFI registered Mutual Fund Distributor and can be accessed at rameshwarspanwar@gmail.com. Further, please note that Mutual Fund Investments are subject to market risks, read all scheme related documents carefully and invest only after discussion with your financial advisor.

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