Last Updated on Jan 20, 2023 by Nikitha
Everyone knows the benefits of mutual funds, but finding the right one from thousands of funds can be an overwhelming task, especially for beginners. Here in this article, we’ve listed the best mutual funds for beginners according to the different categories – equity, debt and hybrid.
Table of Contents
Best mutual funds for beginners (2023)
Based on three different categories, we’ve listed the best mutual funds for each. The lists are derived using Tickertape’s Mutual Fund Screener.
Based on equity
These funds invest the majority of the investment in equities.
| Name | Sub Category | AUM (Rs. in cr.) | Expense Ratio (%) | CAGR 5Y (%) | CAGR 3Y (%) | NAV |
| Quant Small Cap Fund | Small Cap Fund | 2,580.22 | 0.62 | 24.81 | 52.66 | 156.06 |
| Tata Digital India Fund | Sectoral Fund – Technology | 6,463.67 | 0.32 | 23.96 | 28.40 | 35.50 |
| ICICI Pru Technology Fund | Sectoral Fund – Technology | 9,356.93 | 0.88 | 23.46 | 32.09 | 147.58 |
| SBI Technology Opp Fund | Sectoral Fund – Technology | 2,740.91 | 0.89 | 23.11 | 27.97 | 156.71 |
| Quant Tax Plan | Equity Linked Savings Scheme (ELSS) | 2,506.48 | 0.57 | 22.38 | 39.55 | 267.27 |
| Aditya Birla SL Digital India Fund | Sectoral Fund – Technology | 3,244.21 | 0.87 | 22.22 | 28.47 | 128.65 |
| Quant Active Fund | Multi Cap Fund | 3,544.03 | 0.58 | 21.51 | 36.15 | 485.89 |
| Quant Mid Cap Fund | Mid Cap Fund | 1,329.97 | 0.63 | 21.05 | 37.23 | 151.42 |
| Quant Infrastructure Fund | Sectoral Fund – Infrastructure | 827.76 | 0.64 | 20.96 | 41.09 | 25.51 |
| SBI Tax Advantage Fund-III | Equity Linked Savings Scheme (ELSS) | 31.44 | 2.6 | 20.08 | 29 | 63.55 |
Note: The information is dated 17th January 2023. We have listed the 10 best mutual funds for beginners based on the following parameters:
- Category – Equity
- CAGR 3-yr
- CAGR 5-yr – sorted from high to low
- NAV
Based on debt
These funds invest the majority of the investment in fixed-income government securities such as bonds, treasury bills or corporate deposits.
| Name | Sub Category | AUM | Expense Ratio | CAGR 5Y | CAGR 3Y | NAV |
| UTI Overnight Fund | Overnight Fund | 6,629.06 | 0.07 | 162.82 | 3.79 | 3,029.54 |
| Aditya Birla SL Medium Term Plan | Medium Duration Fund | 1,636.57 | 0.81 | 8.61 | 13.83 | 33.73 |
| DSP G-Sec Fund | Gilt – Short & Mid Term Fund | 407.16 | 0.54 | 8.45 | 6.92 | 82.48 |
| IDFC G-Sec-Constant Maturity Plan | Gilt – Long Term Fund | 215.29 | 0.49 | 8.37 | 5.50 | 37.50 |
| IDFC G-Sec-Invest | Gilt – Short & Mid Term Fund | 1,427.72 | 0.62 | 8.33 | 6.61 | 30.96 |
| ICICI Pru Gilt Fund | Gilt – Short & Mid Term Fund | 2,537.95 | 0.56 | 8.29 | 7.38 | 89.37 |
| ICICI Pru Constant Maturity Gilt Fund | Gilt – Long Term Fund | 403.03 | 0.23 | 8.25 | 6.07 | 20.36 |
| Kotak Gilt Fund-PF&Trust | Gilt – Short & Mid Term Fund | 1,756.32 | 0.4 | 8.25 | 7.13 | 91.21 |
| Kotak Gilt Fund | Gilt – Short & Mid Term Fund | 1,756.32 | 0.4 | 8.25 | 7.14 | 89.07 |
| Nippon India Gilt Securities-DMDO | Gilt – Short & Mid Term Fund | 1,136.41 | 0.63 | 8.25 | 6.23 | 35.15 |
Note: The information is dated 17th January 2023. We have listed the 10 best mutual funds for beginners based on the following parameters:
- Category – Debt
- CAGR 3-yr
- CAGR 5-yr – sorted from high to low
- NAV
Based on hybrid funds
These funds invest in both debt and equity instruments.
| Name | Sub Category | AUM | Expense Ratio | CAGR 5Y | CAGR 3Y | NAV |
| Quant Multi Asset Fund | Multi Asset Allocation Fund | 530.01 | 0.56 | 21.74 | 32.06 | 92.26 |
| Quant Absolute Fund | Aggressive Hybrid Fund | 867.83 | 0.56 | 18.82 | 30.64 | 324.14 |
| ICICI Pru Equity & Debt Fund | Aggressive Hybrid Fund | 21,655.35 | 1.2 | 13.63 | 19.76 | 262.96 |
| ICICI Pru Multi-Asset Fund | Multi Asset Allocation Fund | 15,473.05 | 1.16 | 13.31 | 20.37 | 519.43 |
| Baroda BNP Paribas Aggressive Hybrid Fund | Aggressive Hybrid Fund | 787.69 | 0.61 | 12.80 | 14.10 | 20.72 |
| Kotak Equity Hybrid Fund | Aggressive Hybrid Fund | 3,209.48 | 0.59 | 12.15 | 16.80 | 47.29 |
| Edelweiss Aggressive Hybrid Fund | Aggressive Hybrid Fund | 431.63 | 0.51 | 12.13 | 16.01 | 44.81 |
| Canara Rob Equity Hybrid Fund | Aggressive Hybrid Fund | 8,405.74 | 0.62 | 12.11 | 14.49 | 273.24 |
| HDFC Balanced Advantage Fund | Balanced Advantage Fund | 51,026.69 | 0.89 | 11.87 | 17.52 | 345.89 |
| Mirae Asset Hybrid Equity Fund | Aggressive Hybrid Fund | 7,323.43 | 0.36 | 11.66 | 13.88 | 25.37 |
Note: The information is dated 17th January 2023. We have listed the 10 best mutual funds for beginners based on the following parameters:
- Category – Hybrid
- CAGR 3-yr
- CAGR 5-yr – sorted from high to low
- NAV
How to invest in mutual funds in India for beginners?
You can make a lump sum investment in mutual funds or choose SIP for periodic investments. Once you’ve decided the way you want to invest and the fund, you can invest as per the ways below:
- Online or offline from the mutual fund house directly
- Through your broker
- Through AMFI registered agents
You can use Tickertape Mutual Fund Screener to find the best mutual funds in India. You can filter the funds based on your preferred parameters like AUM, NAV, 1-yr returns and more. You can also download the list of funds filtered as per your preferred parameters.
The best part is you can watchlist your favourite funds to monitor them regularly. Click to read more about how to use Tickertape Mutual Fund Screener.
Why should you invest in mutual funds?
Mutual funds are managed by fund managers who invest your money into different asset classes for profits. The reasons you need to invest in mutual funds are below:
- Start little: Mutual funds provide an opportunity to invest with less investment, starting at Rs. 100 at regular intervals. This can even establish a disciplined approach in you.
- Diversified: As the investment is made in different instruments, the investment is diversified. Hence even if one asset doesn’t perform well, there can be other options in the fund to compensate for the loss.
- Quick and simple: You can invest in mutual funds online quickly with simple steps.
Important factors to know while investing in mutual funds
Though mutual funds can provide good returns with a diversified option, there are certain factors you need to consider before investing.
- There are several mutual funds available that are categorised based on their portfolio composition and risk. You need to pick the right mutual fund according to your investment goal and risk tolerance.
- While investing in mutual funds, keep your long-term and short-term goals in mind and find the fund accordingly.
- It is important to check the fund’s performance before investing. However, you also must remember that the fund may not perform the same way yearly.
- Ensure your fund is not over-diversified, as it can dilute your profits.
Conclusion
Mutual funds can be a good investment option only when you understand the working of the fund. Ensure it aligns with your investment objective. You can do your research or contact a financial advisor before investing.
FAQs
1. Can NRIs invest in mutual funds in India?
Yes. NRIs are allowed to invest in mutual funds in India. However, you can check the scheme’s terms and conditions before investing.
2. How much money can I invest in mutual funds?
There is no maximum limit to investing in mutual funds. But pick a fund according to your investment goal, risk appetite and fund performance. Also, ensure you have left some money for emergency funds.
3. Do we need a Demat account to invest in mutual funds?
No. Having a Demat account to invest in mutual funds is not mandatory. However, you must complete your KYC with the AMC (Asset Management Company) you are picking to invest in mutual funds. The KYC includes the basic details of an investor.
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