How To Invest In Mutual Funds In 2021
What Are Mutual Funds?
MFs pool money from several investors to purchase securities.
The fund is handled by a fund manager who doubles up as a stock market or fixed income expert.
How MFs Work
Money is collected from a group of investors and invested together in different funds.
These funds can be based on the type of asset class or sub-asset class or even particular investment themes.
You can start by visiting the website of a fund house, completing your KYC (Aadhar, PAN details, etc) and registering yourself. Then you’re ready to invest!
For beginners, it’s best to start investing in MFs through Systematic Investment Plans, where a small amount (as low as Rs.500) is invested each week/month/quarter in a fund of your choice.
Systematic Transfer Plans let an investor periodically transfer a certain number of units from one MF scheme to another MF scheme within the same fund house, including from equity to debt.
Demat accounts can hold stocks, funds and securities. And through a Demat account, MF units can be bought and sold just like shares.
Top equity funds for 2021 include Axis Bluechip Fund, Invesco India Growth Opportunities Fund, Kotak Flexicap Fund, Mirae Asset Large Cap Fund.
Top debt mutual funds for 2021 include ICICI Prudential Savings Fund, Kotak Savings Fund and Tata Liquid Fund.
Tax Saving Funds
Top tax saving funds for 2021 include Mirae Asset Tax Saver Fund and Motilal Oswal Long Term Equity Fund.
Start Your Mutual Fund Journey Today
You now know the basics of what mutual funds are, how to set one up, and even which ones to invest in - so register with a fund manager today and start investing!
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.