I want to invest Rs 1.5 lakh in mutual funds. Should I invest it in a lumpsum or through an SIP? I am planning to invest for around five to six years. What are some of the mutual funds that I should look for?
-Surya Maiti

It seems, you are new to mutual funds. Do you understand the basics of investing in mutual funds? If no, you should seek the help of a mutual fund advisor near you. Many new investors need a lot of reassurances and hand-holding during troubled phases in the market. Only an advisor near you would be able to offer such personalised advice during such trying times.

Here are a few pointers that would help you. One, when you have an investment horizon of five to six years, you may invest in an equity mutual funds with a relatively lower risk. You may consider investing in an aggressive hybrid scheme or large cap mutual fund scheme. Aggressive hybrid schemes invest around 65-80% of their corpus in equity and 20-35% of the corpus in debt. The mixed portfolio makes these schemes relatively safer than pure equity schemes that have the mandate to invest the entire corpus in stocks.

Similarly, large cap mutual fund schemes that invest in top 100 stocks by market capitalisation are considered more stable than other pure equity mutual fund categories.

If you want to invest more conservatively, you may also opt for balanced advantage funds. These hybrid funds also invest in a combination of equity and debt. The equity part of the portfolio will be decided by key ratios or in-house parameters set by the mutual fund house.

It is always better to stagger your investments over a few weeks or months when investing in an equity mutual funds, especially when you are investing for a period of five to six years.

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