What is the rock-bottom amount needed for mutual funds-India?

What is the rock-bottom amount needed for mutual funds-India2

As investment is gaining ground all around the world, everyone is getting attracted to the high returns of mutual funds. However, most of them back off thinking that they must wait until they earn a considerable amount. What if we can invest in the least amounts possible over a long period?

What is a mutual fund and how does it work?

  • The money invested by many people is accumulated to form a single holding.
  • The holding can invest in stocks, bonds, etc.
  • The mutual fund is managed by a team of professionals who are experts in picking the stocks which can achieve good returns.
  • The predominant feature of mutual funds is that an investor can gain exposure irrespective of the amount he/she invested.

Types of Investment in best mutual funds

There are wide varieties of best mutual funds designed to cater to the needs of an investor.

When it comes to the amount of investment, there are two popular modes of investment. They are:

  1. SIP
  2. Lump sum

What is SIP?

  • Through a Systematic Investment Plan, investors can invest a certain amount in mutual funds at regular intervals.
  • The amount of SIP is the choice of the investor. After considering one’s financial goal and the type of mutual fund, an investor will be able to decide on the SIP.
  • The minimum amount required for a SIP is Rs.500.
  • By investing amounts as low as Rs.500 or Rs.1000, one can gain good returns in a long term.
  • Below are the best mutual funds from various categories with a minimum investment.

ELSS Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)SIP
Aditya Birla Sun Life Tax Relief 9632.76013.916.123.8500
Reliance Tax Saver Fund57.380-6.110.222.5500

Large-cap Mutual funds:

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)SIP
Reliance Top 200 Fund32.549522.039.4218.89100
SBI Bluechip Fund38.34683.4211.9418.91500

Mid-cap Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)SIP
L&T mid cap fund139.16001.1517.3929.88500
L&T India value fund36.67501.2215.2525.75500

Multi-cap Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)SIP
DSP Blackrock Opportunities fundRs. 232.37927.9923.2824.27500
Motilal Oswal MOSt Focused Multi-cap 35 Fund26.3221-0.8915.55N.A.1000

Debt Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)SIP
Reliance Floating Rate Fund10.09633.616.908.01100
Franklin India Low Duration Fund20.58997.038.779.32500

If we observe the above details, the amount of SIP of a few funds was Rs.100. Thus, an investment in mutual funds can start at the very minimum.

Lump Sum Investments:What is the rock-bottom amount needed for mutual funds-India1

  • Lump sum investment is where an investor invests a big corpus at one go.
  • The minimum amount of investment is Rs.5000 for a lump sum. The minimum amount might vary in case of some schemes.
  • Usually, investors choose lump sum method to dump all their surplus money.
  • However, by investing in a lump sum, the investor gets a diversified portfolio rather than investing in a single mutual fund.
  • The investor opting to put a lump sum should have a good appetite for risk and must be a long-term investor. Then due to compound, the lump sum can make the investor turn out very wealthy.

Details of best mutual funds suitable for lump sum investments:

Debt Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)Minimum Investment (Rs)
HDFC Short Term Opportunities Fund19.60015.187.498.555000
Franklin India Ultra-Short Bond Fund24.96447.568.888.8810000
DHFL Pramerica Short Maturity Fund21.53114.157.538.455000
 ICICI Prudential MIP 2540.38333.719.4612.065000
Franklin India Low Duration Fund20.58997.038.779.3210000
Franklin India STIP3759.07815.998.169.245000
Principal Cash Management Fund1727.64065.896.947.835000
Aditya Birla Sun Life Corporate Bond Fund67.61314.447.658.701000

Large Cap Equity Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)Minimum Investment (Rs)
Reliance Large Cap Fund34.185312.414.220.65000
ICICI Prudential Bluechip Fund42.011014.817.65000
India bulls Blue Chip Fund20.656.412.714.5500
Aditya Birla Sun Life Frontline Equity Fund222.954.412.817.81000
SBI Bluechip Fund38.34683.41218.95000

Mid Cap Equity Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)Minimum Investment (Rs)
L&T Midcap Fund139.161.117.429.95000
Kotak Emerging Equity Scheme38.5552.414.929.65000
Sundaram Mid Cap Fund486.547-1.413.326.55000
BNP Paribas Mid Cap Fund32.412-5.31023.15000
Motilal Oswal Midcap 30 Fund26.14250.7920.792N. A5000

Small Cap Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)Minimum Investment (Rs)
L&T Emerging Businesses Fund26.5695.423.2N. A5000
Aditya Birla Sun Life Small Cap Fund37.6712-2.716.427.2

 

1000
Reliance Small Cap Fund43.48079.821.837.35000
Franklin India Smaller Companies Fund56.0348-1.314.329.15000
HDFC Small Cap Fund45.24619.622.124.55000

Diversified/Multi Cap Equity Mutual Fund

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)Minimum Investment (Rs)
Motilal Oswal Multi-cap 35 Fund26.3221-0.888

 

15.6N. A5,000
Kotak Standard Multi-cap Fund34.297615.221.95,000
Principal Multi Cap Growth Fund144.886.815.221.95,000
IDFC Focused Equity Fund38.932.915.415.35,000
SBI Magnum Multi-cap Fund47.67034.414.822.21000

Sector Equity Mutual Funds

Mutual FundNAV (in Rs)1-year returns (%)3-year returns (%)5-year returns (%)Minimum Investment (Rs)
Franklin Build India Fund40.41824.813.426.25000
Sundaram Rural and Consumption Fund42.10470.8891923.25000
Aditya Birla Sun Life Banking and Financial Services Fund28.590.7421.9N. A1000
ICICI Prudential Banking and Financial Services Fund60.68-0.1972026.15000
DSP BlackRock Natural Resources and New Energy Fund34.25-1.926.825.31000

The Whole point

Now we understand that whether it is SIP or Lump sum, an investor needs a minimum of Rs.500- Rs.5000 to begin. Even with the minimum amount, there are various options available.

So, what’s stopping you? Make your portfolio, start investing and reach your goals.