Today we will tell you how to invest in mutual funds. First of all you have to choose four mutual funds.
1. Small Cap
A Small Cap Mutual Fund is a kind of mutual fund with small company investments. These are businesses still developing, not as large as well-known brands. Usually with less than ₹5,000 crore, "small cap" indicates the company's smaller market value. Invest in Small Cap Mutual Funds for what?
Great Potential for Growth Little businesses can expand rapidly. Should the business perform well, the value of your investment may rise rather significantly.
Ideal for Long Term If you wish to invest five years or more, small cap funds are better.
2. Midcap or flexi Cap
A flexi-cap fund is a type of mutual fund which invests in large cap, mid cap, small cap companies. The percentage of investment allocation is not predefined based on the market capitalisation of the companies. With flexi-cap funds, the fund manager has the flexibility to invest money across different companies and different sectors. One could say that flexi cap is more of an extension of how multi caps function given their increased popularity over the past few years among investors. They are the second largest category amongst equity based mutual funds. The benchmark that is applicable for a flexi-cap fund and tries to outperform is the NIFTY 500 Total Return Index.
3. Large Cap
If you want to invest in large players in the Indian stock markets, you may consider investing in certain large-cap mutual funds that invest your money predominantly in the equity of large-cap companies. These companies have the distinction of being among the top-tier 100 companies in the Indian ecosystem of industries. You could say that these companies are famous for their growth and expansion potential and for their upstanding credibility over the years. These are the companies whose products and services are in use on a daily basis in the Indian diaspora.
Large-cap mutual funds work by investing your capital in the equity of large-cap companies with a market capitalisation of ₹20,000 crore or over. The aim of these mutual funds is to seek capital appreciation for investors with a long-term perspective of investment.
4. Credit Risk Fund ( Only FD Beat.)
Credit risk funds (essentially debt funds) are mutual funds that invest in low-rated corporate debt securities. These funds hold an objective to generate higher returns by investing in securities that provide a higher yield than high-rated funds. High-rated corporate or government securities hold a lower risk profile.