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.   

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. 


NameSub CategoryAUM (Rs. in cr.)Expense Ratio (%)CAGR 5Y (%)CAGR 3Y (%)NAV
Quant Small Cap FundSmall Cap Fund2,580.220.6224.8152.66156.06
Tata Digital India FundSectoral Fund – Technology6,463.670.3223.9628.4035.50
ICICI Pru Technology FundSectoral Fund – Technology9,356.930.8823.4632.09147.58
SBI Technology Opp FundSectoral Fund – Technology2,740.910.8923.1127.97156.71
Quant Tax PlanEquity Linked Savings Scheme (ELSS)2,506.480.5722.3839.55267.27
Aditya Birla SL Digital India FundSectoral Fund – Technology3,244.210.8722.2228.47128.65
Quant Active FundMulti Cap Fund3,544.030.5821.5136.15485.89
Quant Mid Cap FundMid Cap Fund1,329.970.6321.0537.23151.42
Quant Infrastructure FundSectoral Fund – Infrastructure827.760.6420.9641.0925.51
SBI Tax Advantage Fund-IIIEquity Linked Savings Scheme (ELSS)31.442.620.082963.55

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.

NameSub CategoryAUMExpense RatioCAGR 5YCAGR 3YNAV
UTI Overnight FundOvernight Fund6,629.060.07162.823.793,029.54
Aditya Birla SL Medium Term PlanMedium Duration Fund1,636.570.818.6113.8333.73
DSP G-Sec FundGilt – Short & Mid Term Fund407.160.548.456.9282.48
IDFC G-Sec-Constant Maturity PlanGilt – Long Term Fund215.290.498.375.5037.50
IDFC G-Sec-InvestGilt – Short & Mid Term Fund1,427.720.628.336.6130.96
ICICI Pru Gilt FundGilt – Short & Mid Term Fund2,537.950.568.297.3889.37
ICICI Pru Constant Maturity Gilt FundGilt – Long Term Fund403.030.238.256.0720.36
Kotak Gilt Fund-PF&TrustGilt – Short & Mid Term Fund1,756.320.48.257.1391.21
Kotak Gilt FundGilt – Short & Mid Term Fund1,756.320.48.257.1489.07
Nippon India Gilt Securities-DMDOGilt – Short & Mid Term Fund1,136.410.638.256.2335.15

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. 

NameSub CategoryAUMExpense RatioCAGR 5YCAGR 3YNAV
Quant Multi Asset FundMulti Asset Allocation Fund530.010.5621.7432.0692.26
Quant Absolute FundAggressive Hybrid Fund867.830.5618.8230.64324.14
ICICI Pru Equity & Debt FundAggressive Hybrid Fund21,655.351.213.6319.76262.96
ICICI Pru Multi-Asset FundMulti Asset Allocation Fund15,473.051.1613.3120.37519.43
Baroda BNP Paribas Aggressive Hybrid FundAggressive Hybrid Fund787.690.6112.8014.1020.72
Kotak Equity Hybrid FundAggressive Hybrid Fund3,209.480.5912.1516.8047.29
Edelweiss Aggressive Hybrid FundAggressive Hybrid Fund431.630.5112.1316.0144.81
Canara Rob Equity Hybrid FundAggressive Hybrid Fund8,405.740.6212.1114.49273.24
HDFC Balanced Advantage FundBalanced Advantage Fund51,026.690.8911.8717.52345.89
Mirae Asset Hybrid Equity FundAggressive Hybrid Fund7,323.430.3611.6613.8825.37

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. 


Nikitha
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