Best mutual funds for sip: How to choose the right one for you

One of the essential aspects of building wealth and a secure future is saving money. Not only does it offer an opportunity to enjoy a quality life, but it also helps a way out of the uncertainties of life. So it was around a few months ago when I was planning to invest in a Fixed deposit or FD, and just like any other individual, I went on the web and searched for the best mutual funds for SIP

I knew that putting aside some chunk of your salary systematically can help steer you out of many hurdles and obstacles in life. 

What are mutual funds?

It is an investment channel where many investors pool their hard-earned money ultimately to earn returns on their capital over a period of time. Notably, this corpus of funds is managed by a professional known as a fund manager or portfolio manager. Further, it is the manager’s responsibility to invest the corpus in different securities such as stocks, bonds etc., and seek to provide potential returns to all the investors. 

Therefore, then the profit or loss on the investment is shared collectively by the investors in proportion to their contribution to the fund. 

However, a facility offered by mutual funds to investors to invest in a disciplined manner is called a Systematic Investment Plan (SIP). It basically allows an investor to invest a fixed amount at pre-defined intervals in the selected mutual fund scheme. 

Here are the top four factors on how to choose the best mutual funds for SIP – 

1. Goal

The primary step while choosing is to first consider your financial goals. Further, calculate the actual value of your goals as they mean the current rate plus inflation over the investing period. 

2. Allocation

Before going for the best-performing mutual funds, asset allocation is very important. This means how much of your money you can allocate to which types of mutual funds meet your financial goals, considering your risk appetite. 

3. Risk

Different mutual funds come with different degrees or types of risk. So, when you search for the ‘best mutual fund to invest today‘ on the web, ensure you do the proper research and accurately assess your risk appetite to arrive at the correct asset allocation for your portfolio.

4. Performance

Fund performance matters and should be considered for a reasonable time period before investing. So, if the fund you are planning to invest in has not been able to beat its benchmark over three, five, or ten years, it might not be a good investment.

It is a well-known fact that when mutual funds were introduced in our country, there was a lack of awareness among people. But, with time, several platforms now provide the necessary resources and even the option to invest. Honestly speaking, I’ve only invested in Mutual Funds via such a platform. 

Bajaj Finserv is my go-to application for all kinds of digital payments, and when I was planning to invest, I did the same on this app only. It is highly recommended! Moreover, just a pro tip – before investing, make sure that you use a mutual fund calculator to experiment and get to know what’s the best for you.

Related Articles

Latest Articles