10 BEST MUTUAL FUNDS FOR LONG TERM INVESTMENT IN 2022 FOR NRI
What are the 10 best Mutual Funds for Long Term Investment is 2022?
Mutual Funds – Overview
A mutual fund is a criterion in which the investors give money to invest in securities like bonds, stocks, and other assets. In addition, professional money managers operate mutual funds. Their job is to allocate the fund’s assets to produce income for its investors. Mutual funds enable small or individual investor access to manage portfolios of equities, bonds, and other securities.
Moreover, each shareholder contributes equally in the profits or losses of funds. Mutual funds are of several categories, representing the securities they invest in. In addition, it charges fees. However, in some cases, commissions also. The value of the mutual fund company depends upon the company’s performance. Investing in the share of mutual funds and investing in the share of stock is not the same thing. The voting rights are not present in it. A share of the mutual fund displays investment in various stocks.
HOW DO MUTUAL FUNDS WORK?
A mutual fund is an investment as well as an actual company. For Example, when an investor buys Apple stock, he buys a little bit of ownership of the company. Likewise, a mutual fund investor is buying partial ownership of the mutual fund company. The mutual fund company concentrates on making investments. The investors earn in three ways:
- Dividends-based incomes.
- By selling securities of the mutual fund that have increased in price.
- If the holdings increase but are not sold by the fund manager.
TYPES OF MUTUALS FUNDS
1. Equity Funds
It is the largest type of mutual fund. This type of fund invests in stocks. In addition, it has various subcategories. Some equity funds represent the size of the company they invest in. For Example, they can be small, mid, or large companies. Others reflect the investment approach. There are so many types of equity funds.
2. Fixed-Income Funds
After the equity fund comes the FIXED-INCOME FUND. It tries to focus on investments that pay a set rate of return, e.g., government bonds and corporate bonds. The fund portfolio’s main focus is to create interest income, which passes to shareholders.
3. Index Funds
On number three comes the index fund. It has gained success in recent years. The idea is that it is very hard and expensive to beat the market. So, the index fund manager buys stocks that respond to a major market index. Therefore, it demands less research from advisors and analysts and is less expensive.
4. Balanced Funds
Balanced funds are likely to invest in hybrid asset classes, whether stocks, bonds, or similar investments. The focus is to minimize the risk factor. The other name of balanced funds is ASSET ALLOCATION FUND. In addition, some funds represent a specific allocation strategy that is fixed. So, they can have a calculated exposure to various asset classes. Other funds follow Dynamic allocation percentages. It includes market conditions or the changing phases of the investor’s life.
5. Money Market Funds
It is a safe place to park your money. You may not get the returns, but your money is safe and sound.
6. Income Funds
Their prime focus is to provide current income on a high steady basis. These funds focus on investing in Government and high profile corporate debt. It mainly focuses on providing steady cash flow to the investors. However, they produce regular income, the non-taxpayer or fewer taxpayers want to avoid such funds.
7. Global Funds
As the name shows, these funds are international funds. Here you can invest only in assets outside the home country. Global funds can invest anywhere around the world and in your home country. Global funding is risky for some, while for others, it is good.
8. Specialty Funds
It is also popular among others. Such mutual funds refrain from abroad diversification to focus on a certain segment only. It focuses on certain sectors of the economy, e.g., financial, technology, health, etc. Regional funds help to focus on a specific geographic area of the world. Such funds make buying stock in abroad countries easier, which can otherwise be difficult and expensive. You can suffer a loss if the region goes into a bad recession. Socially responsible funds invest only in companies that meet certain beliefs. For Example, some socially responsible funds do not invest in “sins” industries like tobacco, alcohol, or nuclear power. It focuses on a competitive performance also maintaining a healthy conscience.
9. Exchange-Traded Funds
Such funds are also very popular. The investors like it very much because the exchange trade funds buy and are saleable at any point throughout the trading day. Such funds are less expensive than the others.
10 BEST MUTUAL FUNDS FOR LONG TERM INVESTMENT IN INDIA 2022
Before choosing a mutual fund, one must make sure that the expense ratio should be minimum. In addition, the ASSET UNDER MANAGEMENT (AUM) must be high. In addition, the greater the AUM, the lesser the tracking error is.
1. UTI Nifty Index Growth Direct Plan:
Such funds are a great choice for investors who earn seeable returns. This fund is very cost-effective. The UTI NIFTY FUND offers less expense ratio and high assets under management. As a result, the tracking errors are very low. Such funds are suitable for objectives for 10-15 years. This fund has a great history regarding analysis, and its track record is excellent. It has a relative size of 5842 Cr, which is large among the category. In addition, it has a superior investment outlook. Moreover, the historical performance of the fund is awesome. The UTI NITY INDEX has an AUM of 5.219 cr and the expense ratio just 0.2%.
2. Sensex Growth Direct Plan:
It is also one of the best mutual funds for the long term. Such funds generate returns that are equivalent to the performance of S&P BSE, subject to tracking errors. It offers a 0.4% expense ratio. The investment must be above five years. This fund invests in big companies. Unlike other funds, such funds are likely to fall less with stock prices. Its AUM is 2.651cr.
3. Bluechip Mutual Fund:
Such funds are less tense than the others. The BLUECHIP MUTUAL FUNDS mainly invest in big companies. Moreover, they can survive and deliver in the hard market phase. Such funds offer great returns. The Asis blue-chip fund offers a 15.4% expense ratio. Blue-chip funds are like equity mutual funds that invest in stocks with large market shares.
Moreover, these companies are big which offer a big return also. Blue-chip funds invest mainly in top 100 firms by market capitalization. Such funds also invest in bonds and cash equivalents. However, there are risks everywhere. Young investors can take high risks as they have a longer investment horizon. Investing in blue-chip funds is fruitful. One may invest in Blue Chip funds to make wealth over some time. In addition, it helps you to invest in financially sound companies with good performance. It is suitable for long-term financial goals. It helps you exit the investment during bad times.
4. Flexi-Cap Funds:
Such funds invest in companies across the market spectrum. Such funds invest in all the large-cap, mid-cap, and small-cap stocks. These funds enable investors to diversify their investment across companies of different market shares. Moreover, the risk rates are low. The other name of FLEXI-CAP is multi-cap funds. The FLEXI-CAP funds invest in any company regardless of the company’s market shares. The FLEXI-CAP funds handle the risk and return aspects pretty well. These funds deliver steady returns even in the bear market phase. In addition, the fund manager can choose and switch different companies and sectors subject to performance from time to time. Moreover, the Flexi-funds are less volatile.
5. Axis Small Cap Fund:
It focuses on generating long-term capital appreciation from a diversified portfolio. It offers a 1.91% expense rate. If you want to invest for a period of 7years or more, the axis small-cap fund is a great choice. On the other hand, these funds fall more when the stock prices fall. However, you can expect high returns in the long term. But there are some risks also.
6. Canara Robeco Mutual Fund:
Such a fund ensures a great return. It is less volatile. It has an expense ratio of 0.82% only. However, it has less AUM that is 1364.34cr. The minimum SIP amount is 1000rs. In addition, the one-time minimum investment is 5000rs. These funds invest mainly in large companies, which is about 78%. Likewise, in small companies, only 8%, and in small companies, only 0.43%.
7. Axix Small Cap Find:
This fund performs very nicely. It has an expense ratio of only 0.3%. Moreover, the AUM is 3631.9cr. The minimum SIP investment is 500rs. In addition, the minimum one-time investment is 5000rs. These funds are for small companies. However, one must wait for five years to get a good return. This particular fund invests 71% in small companies such as mid-cap, only14.42%. The return ratio is pretty good.
8. Parakh Parig Long-Term Equity Fund:
This fund offers you a versatile opportunity to invest in almost the whole market. This fund performs greatly. It has an expense ratio of 1%. It is a high ratio because this fund invests in the US market. The AUM is 6392.8cr. In addition, despite a high expense rate, it still offers a great return. The minimum SIP investment is 1000rs.
Moreover, the minimum one-time investment is 5000rs. To invest in this fund, you must wait for four years after investing. Moreover, 30% of the money is under the US stock market. This mutual fund is one of the best.
9. Mirae Asset Tax Svaer fund:
This particular mutual fund is a tax saver also. This fund is great for specific audiences. However, you cannot withdraw money before a 3years period. It is a tax-saving mutual fund. This fund’s expense ratio is less than is 0.30% only.
10. Index Fund:
These funds focus on the stock market and also perform greatly. They have less expense ratio and high returns.
Since every mutual fund has its pros and cons, the choice depends on the investors. The funds are used according to the circumstances. Not every mutual fund fits all situations. So it is better to choose the mutual fund according to the demand.