Best mutual funds plan to invest for higher profit return

What are the best mutual funds plan that give you a best returns in terms of investments? or Which are the best performing mutual funds in India last 5 years? These are the typical questions arise in your mind, when you plan to invest your money in some sip or mutual funds, right? So, here we are try to clear certain doubts and clear your fundamental understanding of top performing mutual funds in India. Also, What is the best SIP (systematic investment plan) in India with great returns? How long should the investment be done for? Continue with a beginners guide for investment planning for log term big gain from your investments.

Best Mutual Fund Plan And Higher Return Profit

Top performing mutual funds plan:

Investment in Mutual Funds through SIP route should be for a minimum period of 5 years. (If you want your money back in less than 5 years, then invest in AAA-rated Fixed-Interest instruments like FDs or NCDs (Non Convertible Debentures etc.) etc.)
The rule is “High-Risk = High-Returns” when you invest in Mutual Funds. (However, keep this in mind: High-Risk also means, be ready to lose your capital also.)
Always invest in 5-star or 4-star rated Mutual Funds of reputed Mutual Fund Houses (names stated in paras below), if you want your money to be in safe hands.
Please note, Large and Very Large Companies (= LargeCap Companies) are typically considered Very Safe Companies to invest in.
Please note, Small and Very Small Companies (= SmallCap and MicroCap Companies) are typically considered Very Risky Companies to invest in.
Mid-Size Companies (= MidCap Companies) are also typically considered Risky Companies to invest in, but they are considered safer than Small/Very Small Companies.
Indicative TAX-FREE Returns (provided the investment in 5-STAR-Rated MFs, through SIP, is for minimum 5 years):

15% returns per year, if you invest in Balanced/Hybrid Equity Oriented MFs (Very Low Risk Category)
17% returns per year, if you invest in LargeCap MFs (Low Risk Category)
19% returns per year, if you invest in MultiCap MFs (Low Risk Category)
21% returns per year, if you invest in MidCap MFs (High Risk Category)
23% returns per year, if you invest in Small/MicroCap MFs (Very High Risk Category)
23% returns per year, if you invest in Sectoral MFs (Very High Risk Category) (Sectoral = FMCG, Pharma, IT…… sectors.)

When you invest monthly in Balanced MFs, taking the SIP (Systematic Investment Plan) route, then

Your investment will double in 5 years at ~15% CAGR.

So, in 10 years, value of your investment will become 4 times the invested amount.

In 15/20/25/30/35 years, it will become 8/16/32/64/128 times. Your money would just keep on growing.

Your investment will grow as if money is growing for you on a money plant.

This investment journey & opportunity will give you much better returns than your investments in gold.

Those who don’t know much about SIP and about Investments in Mutual Funds, may like to read the following text.

SIP (Systematic Investment Plan) = An Investment Plan which provides you with a facility of making investments systematically on a Monthly basis in MFs (Mutual Funds). (Weekly or Quarterly options are also available but the Monthly option is more popular.)

You may like to contact ICICI Bank or HDFC Bank or any other good bank or a trusted broker to start making investments in MFs using the SIP route.

It is proved that if you make small investment in 5-star-rated MFs every month, then you will get very good returns on your investment and your investment amount will double in about 4–5 years.

So, do start your MF investments through the monthly SIP route immediately.

I am giving below some basic inputs on how to make safe investments in Mutual Funds on a monthly basis and how to double your money every 4–5 years.

What are Mutual Funds (=MFs)?

When we invest directly in the stock market, we purchase shares of AsianPaints, Infosys, ITC, Nestle, TCS…. But, as we are not experts, many times we buy & sell shares (=stocks) at wrong prices which lead to unexpected losses.

So, instead of shares, wise people purchase MFs. Each MF is managed by a Fund Manager who is an expert in buying & selling of shares. So, when you buy a mutual fund worth Rs. 10,000/-, the Fund Manager buys many shares worth total Rs. 10,000/- making sure that he is buying them at the right price. So,when you buy an MF, you don’t have to worry about buying individual shares. The Fund Manager does it for you.

MFs typically give about 15% TAX-FREE returns per year in the long run. In other words, if you invest in Mutual Funds for 4–5 years, then your invested money will double in 4–5 years. (In Bank/Company Fixed Deposits, Recurring Deposits etc. your money will double only in about 8-10 years as you can get maximum 7-10% returns.)

You can double your investment in approximately 4-5 years if you invest, taking the monthly SIP (Systematic Investment Plan) route, in 5-star-rated Balanced and/or MultiCap Mutual Funds, and that too TAX-FREE. (Please note that the highlighted words are very important.)

Invest equal amounts of money in 2-3 of the following Mutual Funds , in the first 5 days of every month. In other words, start a weekly/monthly SIP (Systematic Investment Plan) by going through ICICI/ HDFC/ SBI or any other dependable bank or broker.

Mutual Funds (MFs) are very good for safe investments if you don’t touch the investment for 5–6 years. (This investment is to be done for a long-term, exactly the same way as you do when you purchase a piece of land or a house or a flat or gold. Such items are not to be sold in just 1-2 months/quarters/years but only after 5/10/15/20/25/30/…… years.)

Investments in MFs are safe though the value of investment fluctuates as per the stock market movements.

You should ideally do monthly investments in 2–3 MFs taking the SIP (Systematic Investment Plan) route.

Mutual funds plan investment categories/asset classes & yearly returns:

FDs/RDs:7–9% per year

Gold: 9–10% per year

Real-Estate: 10–12% per year (Limitation: Can’t invest just a few thousands per month in real estate. You have to invest in lakhs only. If you urgently need money, you can’t easily get a buyer. From the time you think of selling, till you get the money in hand, it could take a few months. Also, you can’t sell just one room out of a 2 bed-room flat, if you require only a few lakhs for an emergency.)

Mutual Funds (You can invest as low as Rs. 1000 per month in a mutual fund. You can also sell only a very small part of your investment in a 5-star MF if you need only a small amount for an emergency.)

>> 5-star rated Hybrid/Balanced MFs (Returns ~ 15% per year tax-free in a block of 5–6 years. Typically, your invested amount will double every 5 years.) Prices of Hybrid/Balanced MFs fluctuate less than the prices of MultiCap MFs.

>> 5-star rated MultiCap MFs for medium risk (Returns ~ 20% per year tax-freein a block of 5–6 years. Typically, your invested amount will double every 4years.) Prices of Hybrid/Balanced MFs fluctuate less than the prices of MultiCap MFs.

These fluctuations of prices can make you worry about your investments in MFs. However, if you have invested in 4 or 5 star MFs and if you are a long-term investor, then you should not worry about your investments in MFs at all.

After you make investments in 5 or 4 star Mutual Funds of Hybrid/Balanced and/or MultiCap category, don’t sell them in a panic for 5–6 years even if the stock market fluctuates substantially. They will go down in value & again go up. Don’t worry.

There are other categories which can give higher returns but are very risky. So, I am not recommending those categories. (If you want to invest in stocks To Get Rich Quick, then don’t invest in any stock directly based on Tips from so called knowledgeable people. They will help you with Get Poor Quick tips. Today, on Infosys & Welspun, you can get very contradicting tips. Instead, invest in 5-star rated MidCap and/or Small/MicroCap MFs. However, remember one thing, if the SENSEX crashes by 20% then these funds would go down in value by 40–50%. You should have courage to take such a BIG HIT in the value of your investment.)

Then in:

Hybrid/ Balanced MFs: (Returns ~ 15% per year tax-free in a block of 5–6 years. Typically, your invested amount will double every 5 years.)

(A816)

Hybrid / Balanced Equity Oriented MFs

Tata Balanced Fund – Regular Plan

SBI Magnum Balanced Fund

ICICI Prudential Balanced Fund

L&T India Prudence Fund

MultiCap MFs: (Returns ~ 20% per year tax-free in a block of 5–6 years. Typically, your invested amount will double every 4 years.)

(A816)

MultiCap Equity Oriented MFs

ICICI Prudential Value Discovery Fund

Franklin India High Growth Companies Fund

These funds are managed by experienced fund managers. So, these are safe investments.

Always invest in 5-star (or minimum 4-star) rated mutual funds of reputed fund houses of ICICI, HDFC, Tata, Franklin Templeton, Birla Sunlife, DSP BR, BNP Paribas, SBI…

Never invest in 1/2/3-star Mutual Funds even of these reputed fund houses.

After you understand more about investments through these balanced MFs, you may also invest in multi-cap mutual funds after a few quarters.

Please note that directly investing in the stock market (=shares) is very risky and you may lose your money as it is a Very High Risk investment avenue. So, don’t invest in stocks/shares directly. Invest in MFs.

Investing = (Buying and not having any intention of selling for minimum 1 year or preferably for minimum 5–10 years) = (Like our investments in real estate or gold where we don’t think of selling it for a very long time)

Trading = Buying a stock (=share) and having plans of selling it, in less than a week/ month/ quarter/ year for making quick profits. Traders are sometimes lucky in some initial trades (=beginner’s luck). However, in the long run, they don’t make money or make losses.

Depreciating Asset: Value of a Car worth Rs. 7 lakhs becomes ‘zero’ in 10 years. (Shallow and unwise people normally splurge on latest & expensive cars, bikes, mobile phones, watches…)

Appreciating Asset: Value of an investment in a flat/house/Mutual Fund worth Rs. 7 lakhs becomes approx. Rs. 25-28 lakhs in 10 years. (Rich & Wise people prefer to invest in appreciating assets.)

Most of the people think,

>> (Monthly Earnings minus Monthly Expenses) = (Monthly Savings)

In reality (as per the Billionaire Warren Buffet), it should be,

>> (Monthly Earnings minus Monthly Savings) = (MonthlyExpenses)

So, you should FIRST put your money in savings (=investment) on a monthly basis and THEN start spending for the month from the balance money available to you after your monthly systematic savings/investments.

When you invest monthly in MFs, taking the SIP (Systematic Investment Plan) route, then

Your investment will double in ~5 years at 15% per year appreciation (tax-free).

So, in 10 years, value of your investment will become 4 times the invested amount.

In 15/20/25/30/35 years, it will become 8/16/32/64/128 times. Your money would just keep on growing.

Please note that this growth will not be uniformly achieved every year, but will be achieved in a block of 5–6 years.

Your investment will grow as if money is growing for you on a money plant.

This investment journey & opportunity will give you much better returns than your investments in gold.

Know more about investments and money managements:

All the best!!

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Best Mutual Fund Plan And Higher Return Profit

Top performing mutual funds plan:

Know more about investments and money managements:

By Mitul Patel